Week in Review

March 16, 2015

Restaurant sued after firing pregnant waitresses "too big' to wait tables
The EEOC has filed a lawsuit against Noodles Asian Bistro, asserting that the Asian restaurant located in Bartlett, Tennessee, violated Title VII, as amended by the Pregnancy Discrimination Act, when it fired two female servers in the late stages of their pregnancies. The EEOC also contends that Noodles failed to post and keep posted the notice of nondiscrimination rights as required by federal law. The restaurant fired the two servers after it decided they were too big (due to their pregnancies) to wait tables, the EEOC said in a March 4 release. The agency's complaint seeks injunctive relief to prohibit Noodles from discharging employees due to pregnancy in the future. The EEOC is also asking for equitable relief in the form of reinstatement and back pay, as well as compensatory and punitive damages for the discharged servers. EEOC District Director Katharine Kores stated that "To determine that pregnant employees are 'too big to work' is blatant disregard for the law. Combating this type of discrimination remains a top priority for this office."

High Court OK's DOL reversal on loan officers' exempt status without notice and comment

A DOL Wage and Hour Division "Administrator Interpretation," which reversed the agency's stance on whether the FLSA's administrative exemption applied to mortgage loan officers, was a valid agency interpretation, the Supreme Court has ruled. In a unanimous decision that may well have foiled many prognosticators, the High Court rejected the Mortgage Bankers Association's (MBA) challenge to the DOL's about-face under the Administrative Procedure Act. The Wage and Hour Division had issued two opinion letters-one in 1999, another in 2001-asserting that mortgage loan officers were not exempt from overtime under the FLSA's administrative exemption. In 2004, though, the DOL revised its white-collar regulations, and the MBA asked the DOL for a revised interpretation of the loan officers' status under the new regs. In 2006, the agency issued another opinion letter, now finding that, under the regs as revised in 2004, the loan officers were exempt. But in 2010 (eschewing the use of opinion letters and issuing instead a broader "administrator interpretation") the agency altered its position, and held the FLSA exemption did not apply and that loan officers were indeed entitled to overtime pay. The DOL withdrew its 2006 opinion letter, without offering formal notice or an opportunity for comment. The MBA filed suit, contending that the APA requires the DOL to engage in notice-and-comment procedures when issuing a new interpretation of a regulation that deviates sharply from a previously adopted interpretation. The district court rejected their challenge; on appeal, however, the D.C. Circuit reversed. In an opinion authored by Justice Sotomayor (along with three separate concurring opinions), the Supreme Court reversed the appeals court. The MBA said that it was "disappointed" by the decision, but is ready to move forward and help its members work within the confines of the rule.

Businesses press Court to rule in favor of same-sex marriage, create uniform rule

A group of 379 employers have weighed in on the same-sex marriage question, urging the Supreme Court to reverse a Sixth Circuit decision upholding same-sex marriage bans in Kentucky, Michigan, Ohio, and Tennessee, and to "affirm a uniform principle that all couples share in the right to marry." The brief was filed Thursday, March 5. The employers, both large and small, and as diverse as American Airlines Group, Apple, Ben & Jerry's, Google, Target Corporation, Viacom Inc., and Xerox Corporation, point to the burdens faced by employers and employees alike in the face of a "fractured legal landscape" that has no uniform rule on same-sex marriage. A spokesman for the employer group commented that "State laws that prohibit same-sex marriage impose a significant burden on us and harm our ability to attract and retain the best employees. Such laws force businesses to uphold discriminatory laws that run counter to important corporate values. In the end, economic growth suffers." The Supreme Court will hear oral argument on Tuesday, April 28, with two-and-a-half hours allotted for the collective arguments.

Number of labor lawsuits rise for FMLA and FLSA violations

Statistics recently released by the U.S. Courts show that on the whole, the number of cases commenced in federal district courts under the federal labor laws has increased, with FLSA and FMLA claims markedly up from fiscal year 2013. On the other hand, the number of employment discrimination cases filed under federal civil rights laws declined in FY 2014. Most notably, the number of FMLA suits commenced in FY 2014 soared 26.3 percent over the previous year. FLSA litigation also climbed substantially up by 8.8 percent in FY 2014 as compared to FY 2013.

Hilton Worldwide settles allegations of discrimination against foreign worker

The Department of Justice has reached a settlement agreement with Hilton Worldwide to resolve allegations that the international hotel chain discriminated against a foreign-born worker. The DOJ found that a Hilton-owned hotel in Naples, Florida, discriminated against a worker by improperly rejecting his Social Security card when the hotel re-verified his employment authorization. When verifying or re-verifying an employee's work authorization, employers must allow workers to choose which documents to present from the lists of acceptable documents, and employers cannot reject documents that reasonably appear to be genuine and relate to the worker, the DOJ noted in a March 9 release. By the time the parties reached a settlement, Hilton had already rehired the worker who was harmed by the company's practices. The agreement requires Hilton, among other things, to pay the worker $12,600 for lost wages, pay a $550 civil penalty to the United States, change its employment policies, have HR personnel attend DOJ training, post a notice of rights, and be subject to Justice Department monitoring for two years.