Wednesday, June 22, 2016

Fathers Need More Than A Day

In the wake of Father’s Day, it seems apt to reflect on the state of paid paternity leave in the United States and the resounding negative effects that result from having piecemeal policies—where policy exists at all.

It is the Equal Employment Opportunity Commission’s position that leave related to pregnancy, childbirth, and/or related medical conditions can be limited to women affected by those conditions.  “However, parental leave must be provided to similarly situated men and women on the same terms.”  Id.  For example, if an employer extends leave to new mothers beyond providing medical leave for women with pregnancy-related conditions (e.g. to provide mothers with time to bond with and/or care for their newborns), the employer cannot lawfully fail to provide an equivalent amount of leave to new fathers for the same purpose.  Id.  “Although Title VII does not require an employer to provide pregnancy-related or child care leave if it provides no leave for other temporary illness or family obligations,” the Family and Medical Leave Act (FMLA) requires covered employers to provide such leave.  Id.

Under federal law—through the FMLA—fathers have access to 12 weeks of unpaid leave.  Because of restrictions, however, (e.g., businesses that have fewer than 50 employees are exempt from the rule), not all working fathers are eligible.  Moreover, many parents cannot afford to take unpaid time off work.1

“[A]t least 66 countries guarantee a father’s right to paid paternity leave – 31 offer 14 weeks or more.”  Id.  The U.S. is the only industrialized nation that does not require any paid time off for new parents.  Moreover, the policies that do exist “are all over the place."2

In the past year, there has been an unprecedented rate of expansion in the number of employers either introducing or expanding paid leave options for new fathers:

6 weeks, up from 0
Credit Suisse
20 weeks, up from 12
12 weeks, up from 0
26 weeks during the first two years, up from 12 weeks (primary caregivers) or 5 weeks (secondary caregivers)
16 weeks, up from 6
4 months worldwide, up from 4 weeks
6 weeks, up from 2
2 weeks, up from 0
Honest Company
16 weeks, up from 10
12 weeks, up from 4
Unlimited during first year for salaried workers; 12 to 16 weeks for hourly workers
12 weeks, up from 6
8 weeks, up from 0 (in all states but California)
6 months (prior policy not specified)
20 weeks, up from 10
Winston & Strawn LLP
20 weeks, up from 10 (for associates and of counsel attorneys)
8 weeks, up from 0

Paid time off for fathers, however, is not commonplace.  Fewer than 20% of U.S. employers offer paid paternity leave.  Id.  In an online poll of 1,000 employed adults across the U.S. with access to employer benefits:  more than 1/3 thought taking leave would “jeopardize their position” at work; more than 1/2 thought spending time with their newborn would be perceived as a lack of commitment; and 41% feared losing opportunities on assignments at work.

Family leave has often been framed as a “women’s issue”, an assumption that fuels workplace discrimination against both genders:  “Mothers are seen as caretakers who prioritize home life, and fathers who take more than a week or two off are perceived as less serious about their careers.”   In fact, economists attribute the gender wage gap and lack of women in top leadership positions in part to this parenting imbalance:  fatherhood is associated with a 6% wage bonus, while motherhood carries a 4% wage penalty.  Id.

This perception, however, may start to change as more employers begin offering paid paternity leave, “in large part because companies are in an arms race with competitors to attract Millennials and keep their best talent on board.”  For example, one of the most publicized expansions of paid paternity leave came at Facebook, which now allows men and women to take four months of paid parental leave following the birth of a baby (up from 4 weeks previously). Notably, Facebook CEO Mark Zuckerberg announced on Facebook that he would be taking two months of paternity leave when his daughter was born—noting that “[s]tudies show that when working parents take time to be with their newborns, outcomes are better for the children and families.”

Additionally, men might have less to worry about than they think.  Research has found that having a child improves men’s careers, their earnings increasing by more than 6% for each child they have.  While part of that narrative stems from fathers being seen as responsible (while moms are viewed as distracted), it also results from fathers not taking time off to have kids.

Despite the numerous potential benefits of paternity leave3, the Department of Labor reports that “70 percent of men taking leave for parental reasons took 10 days or less.”   A 2012 Department of Labor study found that fewer employers offer paid parental leave for men than women:  Only 13% of men who took parental leave received pay compared with 21% of women.  Id.  Only California, New Jersey, Rhode Island, and New York4 provide paid family leave to both parents on an equal basis.5  Id.  Encouragingly, “[t]here are ongoing efforts to do the same at the federal level and in at least 15 other states.”

“California’s paid family leave program shows how broad and equal access to paid parental leave for mothers and fathers can substantially increase the number of fathers taking leave.  This program more than doubled the odds that men would take parental leave after the birth of a child, and the proportion of men filing claims for bonding leave increased from 17% in the first year to 26% after five years.”

Although “parental leave policies are designed to level the playing field between parents, they only work as intended if men take advantage of the time they’re given to devote to childcare.”  Cognizant of the fact that having access to paid paternity leave is not the same as taking it, “[s]ome European countries and the Canadian providence of Quebec have begun offering up to several months of paid parental leave specifically designated for fathers, instead of providing couples with shared parental leave to divide as they choose.”  Fathers with access to specifically-designated paid parental leave take paternity leave at higher rates than those where leave is discretionary for either parents—especially when that leave also has higher levels of income replacement.

Beyond the problems with the U.S. not requiring paid leave for new parents, the notion that a child has one parent who is a primary caregiver and another who is secondary is “startlingly outdated.”   About 60 percent of families with children at home have two working parents who share caregiving responsibilities.  Workplaces should be doing what they can to encourage an even distribution of those responsibilities, not encoding the idea that one parent will do more.”  Id.  Tellingly, 78% of Millennials are part of a dual-career couple (compared to 47% of Baby Boomers).  “Unless and until men and women share the responsibilities of parenting equally, gender parity in the labor market will remain out of reach.”

Ensuring that both parents are provided some form of paid paternity leave is something that needs to be stressed as a culture.  Certainly, fathers—and the families that they share in raising—need more than a day.

Written by:  Aaron Herreras

[1] “Nearly half of workers surveyed in 2012 who needed leave but didn’t take it reported not taking leave for economic reasons.  More than three in ten individuals who received partial or no pay reported cutting their leave short of what was needed, and more than four in ten would have taken longer leaves if they had received more pay.”  Dep’t of Labor, DOL Policy Brief:  Paternity Leave, Why Parental Leave For Fathers Is So Important For Working Families, June 18, 2015, at 3.
[2] Employers vary in the amount of time offered.  “But even within a company, a policy may not apply equally to all fathers at a firm.  Sometimes hourly employees aren’t included or their benefits are less generous than those of salaried workers.”  Jeanne Sahadi, Reinventing Work:  Dads get more of a (paid) break at work, CNN Money, June 17, 2016.

[3] A more equal division of labor in terms of parenting and childcare; more equal sharing of domestic labor, including housework; less stress on the family; closer father-infant bonding—leading to better developmental outcomes for their children (including fewer behavioral problems and improved cognitive and mental health outcomes), id. at 2; and higher pay for mothers (according to a Swedish study, future income for new mothers rises by 7% on average for every month of paternity leave taken by the father).  Richard V. Reeves, Give fathers more than one day:  The case for paternity leave, Brookings, June 17, 2016.

[4] The new legislation passed in early April 2016.  “When fully implemented, the state’s program will compensate parents for up to 12 weeks of leave.”  Camila Domonoske, A Big Week For Parents:  New York State, San Francisco Establish Paid-Leave Laws, NPR, April 6, 2016.

[5] “California covers 55 percent of an employee’s wages for up to six weeks; New Jersey, up to about 67% for six weeks; Rhode Island covers a portion of wages for up to four weeks, based on the employee’s income.  Each state’s program is funded through an employee payroll deduction, and payouts are capped.”  Id.  Although Washington State passed a paid-parental-leave law 10 years ago, it has not gone into effect due to lack of funding.  Id.

Tuesday, June 14, 2016

A Win for Whistleblowers in the Fourth Circuit

Recently, the U.S. Court of Appeals for the Fourth Circuit affirmed the Department of Labor’s Decision in Deltek, Inc. v. Department of Labor, which found that Deltek retaliated against its former employee when she blew the whistle on what she perceived to be improper accounting practices.

Deltek, a global provider of enterprise software and information solutions, hired Dinah Gunther as a Financial Analyst in October 2008. She worked in the Information Technology (IT) department, which mostly dealt with the company’s billing disputes with Verizon, one of its vendors for IT services. By spring 2009, Gunther became convinced that Deltek was engaging in gross fraud concerning its disputes with Verizon. She reported her concerns to her management, and almost immediately faced hostility and worsening performance reviews. As a result, on April 20, 2009, Gunther elevated her concerns to Deltek’s General Counsel, Deltek’s Audit Committee, and the United States Securities and Exchange Commission (SEC).

The increasing hostility took a toll on Gunther’s health, and in May 2009, Gunther was placed on paid leave, with the condition that she could return to work at any time as long as she provided 24-hour notice. Nevertheless, the employment relationship between Gunther and Deltek continued to deteriorate. In October 2009, Gunther discovered that her latest check from Deltek was reversed, and that she was being placed on COBRA (an obvious sign that her employer had terminated her health benefits). She promptly notified Deltek that she was returning to work. Unsurprisingly, Deltek seized upon Gunther’s first and only day in the office to accuse her of being “confrontational”, “disruptive”, and “demanding” in a 15-20 minute meeting, and promptly fired her.

Gunther’s case came before a Department of Labor Administrative Law Judge (ALJ), who ultimately presided over an exhaustive 12-day hearing on whether Deltek retaliated against Gunther in violation of the Sarbanes-Oxley Act. First, the ALJ found that Gunther successfully established a prima facie case of whistleblower retaliation, because:
  1. She engaged in protected whistleblower activity;
  2. Deltek was aware of the activity;
  3. Deltek subjected her to an unfavorable personnel action; and
  4. Her protected activity was a “contributing factor” to the unfavorable personnel action.
Thus, under Sarbanes-Oxley, Deltek could escape liability only if it produced “clear and convincing” evidence that it would have taken the same unfavorable personnel action in the absence of Gunther’s protected whistleblower activity. Unbeknownst to Deltek, Gunther had secretly recorded the meeting upon which Deltek premised her removal—and through her careful review of the recording, the ALJ determined that Gunther was “[a]t all times . . . calm, quiet, and (although she repeated herself) polite.” Taking into account the temporal proximity between Gunther’s whistleblowing and the removal, as well as Deltek’s inability to substantiate its allegations against Gunther, the ALJ found that Deltek did not meet its high burden. She awarded Gunther back pay, back benefits, and approximately four years of front pay, for a total award in excess of $300,000. The Fourth Circuit affirmed.

The Sarbanes-Oxley Act provides valuable protection for whistleblowers. Originally passed in 2002 as a response to the catastrophic collapse of energy giant Enron, Sarbanes-Oxley’s reach was extended in 2014 by the Supreme Court in Lawson v. FMR LLC. Sarbanes-Oxley now covers employees of privately owned contractors who work for publicly traded companies. The Act also protects employees who report a wide range of fraud, non-compliance, and cover-up issues. The time limit to file Sarbanes-Oxley retaliation complaints is 180 days. To learn more about whistleblower rights, please contact Kalijarvi, Chuzi, Newman & Fitch, P.C.

Written by Nina Ren.

Wednesday, June 8, 2016

Gender Stereotyping Persists in the Work Place

Eradicating thousands of years of gender stereotyping in the human psyche is a formidable task.  Courts have been grappling with this challenge for decades, since the inception of Title VII of the Civil Rights Act of 1964.

Price Waterhouse v. Hopkins is the seminal case addressing prohibited sex stereotyping in the work place. Ann Hopkins had worked as a Senior Manager for Price Waterhouse for five years when she was proposed as a candidate for a partnership in 1982. Of the 662 partners at the firm at that time, only seven were women. All of the partners at the firm were invited to submit written comments regarding each candidate. These comments were reviewed by the firm’s Admissions Committee, which in turn made recommendations to the Policy Board.

The comments submitted by some of the partners revealed a negative reaction to Hopkins’s  personality because she was a woman: One partner described her as “macho”; another suggested that she was “overcompensated for being a woman”; a third advised her to take “a course at charm school”; other partners criticized her use of profanity; another partner suggested that those partners took offense at her using profanity “only because it’s a lady using foul language.” One partner, who bore the responsibility of informing Hopkins of the Policy Board’s decision to place her candidacy on hold, advised her that in order to improve her chances for partnership, she should “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.”

The Court rejected Price Waterhouse’s contention that these remarks were merely “discrimination in the air,” or stray comments unrelated to the decision to put Hopkins’s candidacy for partnership on hold. Rather, the Court found, “Price Waterhouse invited partners to submit comments; that some of the comments stemmed from sex stereotypes; that an important part of the Policy Board’s decision on Hopkins was an assessment of submitted comments; and that Price Waterhouse in no way disclaimed reliance on the sex-linked evaluations.”

Title VII forbids an employer to “fail or refuse to hire or to discharge any individual, or otherwise to discriminate with respect to his compensation, terms, conditions, or privileges of employment…because of such individual’s…sex.” 42 U.S.C. § 2000e-2(a)(1)(2) (emphasis added).The Price Waterhouse Court stated that, “[w]e take these words to mean that gender must be irrelevant to employment decisions,” and “[i]n the specific context of sex stereotyping, an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.” “An employer who objects to aggressiveness in women but whose positions require this trait places women in an intolerable and impermissible catch 22: out of a job if they behave aggressively and out of a job if they do not. Title VII lifts women out of this bind.”

While the objective of Title VII is to lift women out of that bind, decades after its implementation and Price Waterhouse’s specific pronouncement that Title VII prohibits sex stereotyping, women still find themselves being bound by antiquated and prohibited sex stereotyping.

In Equal Employment Opportunity Commission v. New Prime, Inc., Deanna Clouse, a female applicant for a truck driving position, alleged that Prime discriminated against her on the basis of her gender when it informed her she could not be hired because there were no female trainers available to train her. Ms. Clouse had told Prime that she was willing to be trained by a man in order to enter the training program. Prime nevertheless told her that was not allowed, pursuant to its policy.

In 2004, Prime adopted a same-sex trainer policy that required female driver applicants to be trained only by female drivers. Prime implemented this policy after it was found in a previous EEOC lawsuit to have violated Title VII based on one of its female driver trainees being sexually harassed by a male trainer. Female driver applicants were negatively and disproportionately impacted by this policy. There were a small number of female drivers available to train, which resulted in the female applicants being placed on a wait list that for many was longer than one year.

Prime contended that it put this policy in place in order to protect female applicants. Prime argued that sex was a bona fide occupational qualification, or “BFOQ,” because “its same sex training policy was based on its safety and privacy concerns for women.” The court disagreed. “[D]iscrimination on the basis of sex because of safety concerns is allowed only in narrow circumstances,” such as when “sex actually interferes with the employee’s ability to perform the job.” Prime admitted that “a woman’s gender does not interfere with her ability to perform the job of truck driver or to be trained as a truck driver for Prime.” Prime contended, however, that it implemented the policy in order “to better provide for the privacy of its drivers” and “for the safety female drivers, and to protect them from unacceptable behavior, including harassment, assault, and rape.”

“[T]he BFOQ defense is extremely narrow and does not extend to the protection of employees.” The court found that Prime “not only created an obstacle for female applicants, it also removed a female applicant’s ability to make her own decision with regard to any alleged safety or privacy concerns she may or may not encounter with the potential job.” “[T]he women who apply for positions at Prime should be allowed to make their own decisions regarding their potential employment within the trucking industry.”

After the Court entered an order on Prime’s liability, Prime agreed to pay Ms. Clouse $250,000 to resolve her claims. In May 2016, Prime entered into a consent decree to pay over $2.8 million in lost wages and damages for the other 63 women who were denied job opportunities. Responding to the Court’s order, Andrea G. Baran, a regional attorney for the EEOC’s St. Louis District, stated in a May 31, 2016, EEOC Press Release, “When women break into male-dominated fields, they are often trained by men. We should not expect that these women will be sexually harassed. It is disrespectful to men everywhere to assume that they will harass women if they work together in close quarters.”

Prime illustrates that companies sometimes make decisions or implement policies based on negative sex stereotypes of both men and women: men sexually harass women, and in order to “protect” women, women should not be given even the opportunity to make a decision for themselves as to their own potential employment, where that employment involves being in close physical proximity to men. As Ms. Baran explained in the May 31, 2016, EEOC Press Release, “employers have a responsibility to adopt strict anti-harassment policies and practices and enforce them so that all employees–regardless of sex–can work and succeed together.”

Antiquated and impermissible notions of the need to protect women based on their fragility– including their pregnancy–often permeate blue-collar industries. In May 2016, First Call Ambulance Service agreed to settle a pregnancy discrimination lawsuit brought by the EEOC (Equal Employment Opportunity Commission v. First Call Ambulance Service, Inc.) for $55,000. First Call had removed a pregnant emergency technician after she presented a doctor’s note that restricted her from lifting patients greater than 200 pounds without assistance and refused to accommodate her. First Call removed the employee from the work schedule, told her she could not work because of her pregnancy, and forced her to take unpaid leave. Even though First Call had allowed non-pregnant employees to use a power cot to lift patients, First Call refused to offer similar accommodations to female employees who had lifting restrictions due to pregnancy. “Employers should never remove an employee simply because of her pregnancy,” said Faye A. Williams, a regional attorney for the EEOC’s Memphis District Office in a May 27, 2016, EEOC Press Release.

May an employer assert that excluding pregnant workers from certain jobs is lawful because non-pregnancy is a BFOQ? In the EEOC’s enforcement guidance entitled, “Pregnancy Discrimination and Related Issues,” the EEOC stated that, “[a]n employer who seeks to prove a BFOQ must show that pregnancy actually interferes with a female employee’s ability to perform the job, and the defense must be based on objective, verifiable skills required by the job rather than vague, subjective standards.” “The defense cannot be based on fears of danger to the employee or her fetus, of potential tort liability, assumptions and stereotypes about the employment characteristics of pregnant women such as their turnover rate, or customer preference.”

In International Union, UAW v. Johnson Controls, Inc., the Supreme Court held that the employer’s policy of excluding women with childbearing capacity from lead-exposed jobs explicitly discriminated against women on the basis of their sex, in violation of Title VII. The Court rejected the employer’s defense of a BFOQ of female sterility, because the employer could not show that sex or pregnancy actually interfered with the female employees’ ability to perform. Rather, the Court found from the record, fertile women were able to participate in the manufacturing of batteries as efficiently as anyone else. “Johnson Controls’ professed moral and ethical concerns about the welfare of the next generation do not suffice to establish a BFOQ of female sterility. Decisions about the welfare of future children must be left to the parents who conceive, bear, support, and raise them rather than to the employers who hire those parents.”

The acknowledgement in Price Waterhouse that gender-stereotyping discrimination is discrimination “because of sex” under Title VII has been interpreted by some courts to mean that discrimination based on transgender identity is also cognizable under Title VII. “Discrimination on the basis of transgender identity is [] ‘no different from the discrimination directed against Ann Hopkins in Price Waterhouse, who, in sex-stereotypical terms, did not act like a woman.’” Fabian v. Hospital of Central Connecticut (quoting Smith v. City of Salem).  “‘A person is defined as transgender precisely because of the perception that his or her behavior transgresses gender stereotypes. The very acts that define transgender people as transgender are those that contradict stereotypes of gender-appropriate appearance and behavior.’” Id. (quoting Glenn v. Brumby).

In a case examining alleged discrimination on the basis of transgender identity, the Ninth Circuit eloquently summarized the import of the Price Waterhouse holding, stating: “In Price Waterhouse,…the Supreme Court held that Title VII barred not just discrimination based on the fact that Hopkins was a woman, but also discrimination based on the fact that she failed ‘to act like a woman’–that is, to conform to socially-constructed gender expectations. What matters, for purposes of this part of the Price Waterhouse analysis, is that in the mind of the perpetrator the discrimination is related to the sex of the victim: here, for example, the perpetrator’s actions stem from the fact that he believed that the victim was a man who ‘failed to act like’ one. Thus, under Price Waterhouse, ‘sex’ under Title VII encompasses both sex—that is, the biological differences between men and women–and gender. Discrimination because one fails to act in the way expected of a man or woman is forbidden under Title VII.” Schwenk v. Hartford. (Emphasis in original).

As these cases elucidate, employment decisions based on paternalism and sex-stereotyping–even when done with a beneficent objective in mind–are prohibited. As the Supreme Court made abundantly clear in Price Waterhouse, gender must be irrelevant to employment decisions.” Period.