Transgender Rights Under the Trump Administration

Attorney General Jeff Sessions recently advised United States Attorneys across the country that the Department of Justice (DOJ) is reversing its prior position that Title VII of the Civil Rights Act of 1964 – which prohibits gender discrimination in the workplace, among other things – protects transgender workers from discrimination.  This is a significant change from the position of the Obama Administration and the Equal Employment Opportunity Commission (EEOC), both of which interpreted Title VII to prohibit such discrimination.  According to a current DOJ spokesperson, Session’s memorandum was issued in order to align the DOJ with the law as written by Congress.

In his memorandum, Attorney General Sessions wrote that “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status.”  He also instructed that “the Department of Justice must interpret Title VII as written by Congress.”  He further directed that, while other statutes do so, Title VII does not expressly prohibit gender identity discrimination, and Congress has chosen not to amend the language.  Thus, according to Attorney General Sessions, Congress did not ever and does not now intend for gender identity discrimination to be prohibited by Title VII.  Attorney General Sessions directed the DOJ to take this position going forward, except in cases where lower-court controlling precedent dictates otherwise, in which case the issue is to be preserved for potential review.

The memorandum issued by Sessions is not all that surprising given the actions taken by the Trump administration earlier this year.  In February 2017, the Departments of Justice and Education jointly issued a memorandum undoing Obama-era guidance requiring all public schools to allow transgender students to use the bathroom corresponding to their gender identity, pursuant to Title IX.  In July 2017, President Trump tweeted that the U.S. military would no longer accept or allow transgender individuals to serve “in any capacity.”  And during that same month, the Justice Department filed an amicus brief with the Second Circuit in Zarda v. Altitude Express, encouraging the Second Circuit to ignore the position of the EEOC asserting that Title VII does not include protection against discrimination based on sexual orientation.

What does this mean for employers?

To be sure, the DOJ is not charged with enforcing Title VII as to private employers and Sessions’ memorandum does not change the law or overrule any court decision on this issue.  However, the DOJ does prosecute workplace discrimination claims by public employees. It also has the ability to participate in private employer litigation through the submission of amicus (friend of the court) briefs on significant issues.  Thus the DOJ’s activities have the potential to move the courts toward an interpretation of Title VII that excludes transgender status and gender identity from its protections; this creates a potential philosophical and advocacy conflict between the DOJ and the EEOC, which holds the opposite view.  Given these disparate views within the same federal government, employers should closely follow developments in this area.

Going forward, employers should proceed with caution in relying upon Attorney General Sessions’ memorandum in determining the scope of their anti-discrimination policies.  There is no risk in having policies that assume gender identity or even sexual orientation discrimination is covered under Title VII, but there is legal risk in assuming they are not covered.

Note also that the DOJ’s current position should have no effect on employers in states (or cities) that have their own prohibitions against employment discrimination based on transgender status or gender identity; those laws must still be followed.

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Addressing Co-Employment Risks When Drafting Agreements with Staffing Agencies

Companies use staffing agencies for a variety of important purposes, such as to temporarily replace an employee on leave, obtain specialized expertise for a project, or to outsource a function that the company does not ordinarily perform.  However, recent lawsuits, agency guidance, and agency investigations have highlighted the co-employment risks that exist when an employer uses workers provided by staffing agencies.

Often, workers and agencies allege that there is a joint employer relationship between the staffing agency and the company based on the multi-factor tests that are used to determine whether workers are true independent contractors or employees. While employers cannot eliminate potential misclassification risks solely through their services agreements, they can take certain steps to minimize that risk and limit exposure.

Some basic steps include:

  • Ensure the agreement requires the staffing agency to comply with all federal, state, and local laws, specifically including labor and employment laws and the FLSA, and that it specifies that it is the agency’s obligation (not the company’s) to comply with these laws with respect to its workers;
  • Although not legally conclusive, ensure the agreement establishes that the staffing agency and its workers are independent contractors and not employees of the company, and that the agency is solely in control of its workers;
  • Ensure that there are indemnification and defense provisions that cover claims arising under the FLSA and other labor and employment laws;
  • Be mindful of the timing required in the agreement to tender a request for defense or indemnification so that in the event of a potential lawsuit, your company’s rights are not inadvertently waived; and
  • Ensure your company’s practices in reality accord with what is stated in the contract, particularly vis-à-vis the level of control your employees are exerting over the staffing agency’s employees.

Consult legal counsel when drafting these types of provisions.  These and potentially other steps to discuss with counsel should help your company be in the strongest possible position should the staffing agency’s workers, or a federal or state agency, bring claims under the FLSA or other employment laws.

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Calling an Employee on FMLA Leave with a Work Question: Proceed with Caution!

Oftentimes, employees take FMLA leave with little or no notice. This can leave managers and co-workers in a quandary if they need to find a particular document, or check the status of a pending project, or have a pressing issue to discuss. In these situations, the question arises whether the manager or co-worker can (or should) call an employee who is on FMLA leave to answer a work question.

A growing number of courts have recently considered this issue in the context of an FMLA interference claim brought by an employee whose manager or co-worker calls him or her about work while on FMLA leave. The generally recurring theme in these cases is that contact with an employee out on FMLA leave about work-related issues is the equivalent of an instruction to work, which an employee may feel he/she cannot refuse. Such an instruction, the employees argue, interferes with their right to be away from work on job-protected, FMLA leave and/or acts as a disincentive to take or to use FMLA leave. Put another way, the employees argue, the employer has failed to “respect” the employee’s FMLA “entitlement.” Bell v. Dallas County, 432 Fed. App’x 330, 334 (5th Cir. 2011).

Unfortunately, the FMLA and the accompanying regulations do not specifically address when and under what circumstances an employer may contact an employee while on FMLA leave, other than to say that an employer may require an employee to report periodically on his/her status and intent to return to work. The courts, however, have fashioned some general guidelines. The general consensus among the courts, including several Texas courts, is that “reasonable contact limited to inquiries about the location of files or passing along institutional  or status knowledge will not interfere with an employee’s FMLA rights; however, asking or requiring an employee to perform work while on leave can constitute interference.” Smith-Schrenk v. Genon Energy Services, LLC, 2015 WL 150727 (S.D. Tex. Jan. 12, 2015); see also Austin-Shipp v. Taco Bell of America, LLC, 2017 WL 1425605 (E.D. Tex. Mar. 21, 2017). So an occasional phone call inquiring about files, or asking for a password, or even asking a brief question about a pending assignment should not give rise to an interference claim.

On the other hand, asking or requiring an employee to work while on leave or to complete an assignment he/she should have completed before leave began can cross the line into actionable interference. For example, asking an employee on FMLA leave to update files, or to attend a telephonic strategy meeting, or to make sales calls from home have been found to be problematic. So have visits to the employee’s home to discuss work issues. The only exception is where an employee has voluntarily agreed to perform such tasks while on leave. However, the employee’s agreement to do so must be truly voluntary, which may not always be clear. See 29 C.F.R. § 825.220(d) (“an employee’s voluntary and uncoerced acceptance (not as a condition of employment) of a light duty assignment while recovering from a serious health condition” does not violate the FMLA).

The bottom line is that employers who need to contact an employee while on FMLA leave should approach the situation with caution. For anything other than occasional (and brief) de minimis contact with an employee on ministerial matters, employers should refrain from contacting employees on FMLA leave about substantive work issues. In time-sensitive situations, employers may seek the employee’s voluntary consent to perform tasks from home while on leave, but this should be reserved for the truly exceptional case. And, don’t forget, if an employee on FMLA leave is voluntarily performing work-related tasks at the employer’s request, it is very likely to be compensable time and should not be counted against the employee’s FMLA leave entitlement.

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Understanding the new Defend Trade Secrets Act

On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act of 2016 (“DTSA”). The DTSA is designed to take effect immediately. The text of the DTSA is available here.

What is the DTSA?

The DTSA is a new federal law designed to curtail unfair competition by creating a civil cause of action for misappropriation of trade secrets. Legal commentators have described the law as the most significant expansion of federal intellectual property law in over fifty years. The statute’s core provision provides that: “An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to product or service used in, or intended for use in, interstate or foreign commerce.”

What does the DTSA mean for employers?

  • Access to federal court. Prior to the enactment of the DTSA, there existed no federal civil cause of action for trade secret theft. As a result, a patchwork of state law governed misappropriation litigation. While the general acceptance and adoption by states of the Uniform Trade Secrets Act resulted in some uniformity, differences in state trade secret misappropriation law of significant consequence remain. The DTSA does not preempt this state law; its enactment is instead expected to result in the development of a body of uniform federal trade secrets misappropriation law that complements existing state law.
  • Access to new civil seizure remedy. The most significant difference between the DTSA and existing state trade secret misappropriation law is that, under the DTSA, a court can impose an ex parte civil seizure of property. Upon a showing of “extraordinary circumstances,” a federal court may issue an order seizing such property as is “necessary to prevent the propagation or dissemination of the trade secret.”
  • No adoption of inevitable disclosure doctrine. Under the inevitable disclosure doctrine, a plaintiff may prove misappropriation of trade secrets by establishing that a former employee’s new employment is such that he or she will inevitably rely on or use the plaintiff’s trade secrets. Many states have rejected this doctrine. The DTSA is designed to ensure that the doctrine is not introduced in states that have rejected it. The statute forbids injunctions that “conflict with an applicable State law prohibiting restraints on the practice of a lawful profession, trade, or business” or that limit employment based “merely on the information the person knows.”
  • New notice to employees required. The DTSA includes a whistleblower protection provision that provides immunity for disclosure of trade secrets: (a) to government officials or an attorney solely for the purpose of reporting or otherwise investigating a suspected violation of law, or (b) in a complaint or other document filed under seal in a lawsuit or other proceeding. Employers must give notice of this immunity from criminal and civil liability in “any contract or agreement with an employee that governs the use of a trade secret or other confidential information.” Employers who fail to comply with this requirement cannot recover punitive damages or attorneys’ fees that may be available in an action against the employee under the DTSA.

What should employers do now?

Employee misappropriation of confidential and trade secret information poses a growing threat to employer investment in innovation and competitive market position. The DTSA is a new tool that employers may use to access federal courts to manage and eliminate employee misappropriation of trade secrets. In light of its recent enactment, we recommend that employers consider the following actions:

  • Review existing policies regarding confidential and trade secret information and existing employee confidentiality agreements to ensure compliance with the DTSA’s new employee notice requirement.
  • Recognize that the DTSA does not lessen the burden of establishing the existence of a protectable trade secret. In this regard, the most important action that an employer can take is to identify its trade secret information and to take reasonable measures to keep the information secret. Such measures may include implementing policies restricting the use and disclosure of confidential and trade secret information, requiring employees to sign confidentiality agreements, marking trade secret information as “confidential,” and restricting access to confidential and trade secret information.
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Employer Compliance with Texas’ New Open-Carry Law

Texas House Bill No. 910, effective January 1, 2016, allows handgun license holders in Texas to carry a holstered handgun openly anywhere that a concealed handgun is permitted. Employers’ existing policies prohibiting guns on employer property are lawful under the new open carry law, and Texas law already requires private property owners that want to keep guns from their property to notify the public “orally or by written communication” that guns are prohibited. Although the notice aspect of the law has not changed, the precise wording of the notice to prohibit handguns has changed.

While the new statute allows property owners – or those with authority to act for the owner – to communicate the prohibition “orally” or in writing, the most effective form of communication to visitors will probably be the statutorily-prescribed signage. Beginning January 1, 2016, to prohibit the open carry of handguns, a sign must specifically state as follows:



A sign must display word for word the exact language above to convey proper notice. In addition, the notices must be contained on separate signs, in English and Spanish, in contrasting colors with block letters at least one inch in height, and displayed in a conspicuous manner clearly visible to the public. The State does not itself make these signs available; they must either be created by the property owner or purchased from a third party.

To the extent a property owner also wants to prohibit concealed carry of handguns, below is the additional signage requirement to do so. These signs must be posted in addition to the no-open-carry signs:



As with the open-carry signs, a concealed-carry sign must display word for word the exact language above to convey proper notice and follow the other rules noted above with respect to English and Spanish versions, contrasting colors, block letters, letter size, and conspicuous posting.

In addition to posting the signs, employers desiring to prohibit open and/or concealed carry of guns may want to develop a policy prohibiting the practice to put employees clearly on notice.

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Managing employees with psychiatric disabilities

Today I had the honor of speaking on a panel with three distinguished advocates for disability rights, Lewis Bossing of the Bazelon Center for Mental Health Law, Brian East of Disability Rights Texas, and Christopher Kuczynski of the U.S. Equal Employment Opportunity Commission.

Here are eight things employers need to know when managing employees with psychiatric disabilities:

1. Employees with psychiatric disabilities, such as depression, anxiety disorder, PTSD, OCD, social anxiety disorder, and bipolar disorder, are underrepresented in the workplace. There is no evidence that these employees are any more prone to outbursts than other employees.
2. Relatively simple accommodations for employees with psychiatric disabilities include:
• Providing written instructions, task lists, a calendar, or other reminders for employees who have concentration problems
• Reduce distractions for employees through the use of space enclosures or a private office, and allowing them to play music or use headphones
• Assist employees to divide projects into smaller tasks, and to make daily to-do lists
• Schedule regular “check-in” meetings for larger projects
• For stress relief, allow longer breaks, time off for counseling, all questions to be answered by one favored supervisor, and additional time to learn new tasks
• Provide positive reinforcement and set clear expectations
(Thank you to Brian East for these suggestions, and to the Job Accommodation Network for additional resources.) More difficult accommodation requests include requests for extended leave, job reassignment, and telecommuting. I recommend asking for legal advice when considering these requests.
3. Sometimes coworkers question why an employee is receiving special treatment. Take a proactive approach and train all employees on the ADA and accommodation process. Employers cannot disclose the existence or nature of an employee’s disability to her coworkers, but can reference the accommodation process.
4. I often hear from clients that an employee appears “depressed” or “bipolar.” Assuming that an employee has a psychiatric impairment can result in liability under the ADA, if the employer “regards” the employee as disabled.
5. The ADA does not require employers to put up with bad behavior from any employee, even a disabled employee. Employers may hold disabled employees to the same performance standards as non-disabled employees. But they may be required to accommodate employees to allow them to meet those standards.
6. Always take an employee’s request for help with a job due to a medical issue seriously. The law requires employers to engage with employees to discuss job accommodations, even if the employer doesn’t agree to an accommodation. Document all conversations with employees, and ask the employee to fill out a form when requesting an accommodation.
7. Employers can request medical documentation of the existence of a disability, and the need for a particular accommodation. Just don’t ask for more, i.e. complete medical records. I recommend using a form or letter that the employee gives to her doctor.
8. If you believe that an employee’s disability makes him a threat to himself or the workplace, or renders him unable to do his job, you can require a fitness for duty exam. This is a tricky area of the law, and I recommend seeking legal counsel before acting.

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EEOC Issues Controversial Guidance on Pregnancy Discrimination

The U.S. Equal Employment Opportunity Commission (“EEOC”) issued updated Enforcement Guidance on pregnancy discrimination on July 14, 2014, over the objection of two of the Commissioners.  Along with the updated Guidance, the EEOC also issued a Q&A and a Fact Sheet for employers.  Together, these documents confirm the EEOC’s broad interpretation of the Pregnancy Discrimination Act (“PDA”) and coverage of pregnancy under the Americans With Disabilities Act (“ADA”).  The following are some of the key points contained in the Enforcement Guidance:

  1. The PDA protects workers from discrimination based on a current pregnancy, a past pregnancy, and an intention to become pregnant.
  2. Lactation or breastfeeding is a pregnancy-related medical condition and is thus covered by the PDA.
  3. An employer is required to treat a worker temporarily unable to perform the functions of her job because of a pregnancy-related condition in the same manner it treats other workers similar in their ability or inability to work, whether by providing modified tasks, alternative assignments, or fringe benefits such as disability leave and leave without pay.
  4. Employers are required by the PDA to offer light duty assignments to pregnant workers if light duty assignments are provided to non-pregnant workers who have similar work restrictions.
  5. An employer may not refuse to treat a pregnant worker the same as other workers who are similar in their ability or inability to work by relying on a policy that makes distinctions based on the source of a worker’s limitations (e.g., a policy of providing light duty only to workers injured on the job).
  6. An employer may not compel a worker to take leave because she is pregnant, as long as she is able to perform her job.
  7. As with other fringe benefits, employers who offer health insurance must include coverage of pregnancy, childbirth, and related medical conditions.
  8. Parental leave (as opposed to leave to recover from pregnancy/childbirth) must be offered on the same basis to both male and female workers.
  9. Pregnancy-related impairments may be disabilities within the meaning of the ADA, and thus must be reasonably accommodated.
  10. Hostile work environment claims may be based on pregnancy

Interestingly, the United States Supreme Court has also signaled its intent to weigh in on the interpretation of the PDA in the next term.  On July 1, 2014, the Court agreed to hear the case of Young v. UPS. The issue in Young is whether an employer must provide accommodations to pregnant employees with work restrictions on the same basis that it provides accommodations to non-pregnant employees with similar work restrictions, e.g., light duty assignments without regard to the source of the work restriction.

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New Limits On General Personal Jurisdiction: Where Is An Out-of-State or Foreign Corporation “At Home”?

One of the first questions that must be asked (and answered quickly) when a lawsuit is filed in federal court is whether personal jurisdiction may be exercised over the defendant.  Personal jurisdiction may be predicated on either specific jurisdiction or general (or “all purpose”) jurisdiction.  Specific jurisdiction focuses on the defendant’s contacts with the state in which it is sued and the conduct alleged.  General jurisdiction, on the other hand, is premised on the defendant’s contacts with the forum state, irrespective of whether those contacts relate to the claims being asserted.  General jurisdiction is often phrased as whether the defendant is “at home” in the forum state, usually meaning the place of incorporation or a principal place of business.  If so, it can potentially be sued in its “home” location for conduct that occurred anywhere in the world.

Significant decisions defining the scope of general jurisdiction have been relatively few.  That changed on January 14, 2014 with the U.S. Supreme Court’s potential game-changer in Daimler AG v. Bauman. The question answered by the Court in Daimler was whether the conduct of a foreign corporation’s U.S. subsidiary may subject the foreign corporation to suit in any state in which the U.S. subsidiary makes substantial sales.   Until Daimler, there was a dispute among the circuit courts whether the conduct of a subsidiary may be attributed to a parent corporation for purposes of establishing personal jurisdiction.

In a unanimous decision, the Court said “No.”  Justice Ginsburg explained that whether or not the sales of the U.S. subsidiary in the forum state (California) could be attributed to the parent corporation, Daimler, was inconsequential.  The only relevant issue was whether Daimler itself was “at home” in California.  Because Daimler was not incorporated in California and did not have a principal place of business in California, the Court concluded there was no general jurisdiction over it in California.   The Court reasoned that outside of an “exceptional” case, general jurisdiction will generally be limited to the places where a corporation is incorporated and its principal place of business.  In a significant footnote, the Court recognized that “[g]eneral jurisdiction . . . calls for an appraisal of a corporation’s activities in their entirety, nationwide and worldwide.  A corporation that operates in many places can scarcely be at home on all of them.”

The Bottom Line for Employers: Corporations with national and international operations should carefully scrutinize the personal jurisdiction allegations asserted against it.  If a corporation is sued in a state in which it is not incorporated and does not have a principal place of business, Daimler makes it unlikely (outside of the undefined, “exceptional“ case) that general personal jurisdiction will exist over it.  It also establishes that corporations are not “at home” in every state in which they (or a subsidiary) engage in substantial business, thus significantly narrowing the forums available to plaintiffs in lawsuits against out-of-state and foreign corporations.

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Fifth Circuit Court of Appeals Holds that Title VII and the PDA Cover “Lactation Discrimination”

In Equal Employment Opportunity Commission v. Houston Funding II, Ltd., No. 12-20220 (May 30, 2013), the Fifth Circuit ruled that Title VII of the Civil Rights Act and the Pregnancy Discrimination Act (“PDA”) prohibit discrimination against women who are lactating or expressing milk. It held that lactation is a “related medical condition” to pregnancy and childbirth under the PDA. See 42 U.S.C. § 2000e-(k) (discrimination on the basis of sex includes, but is not limited to, “on the basis of pregnancy, childbirth, or related medical conditions”). The appeals court reversed the trial court’s holding that the PDA did not protect women from discrimination on the basis of lactation.

In this case, the plaintiff had alleged that she was fired after she informed a manager that she intended to return to work, and requested use of a back room to express milk. Upon hearing this request, the manager told her that her job had been filled. She subsequently received a letter terminating her for job abandonment. The appeals court rejected the company’s claim that this was “breast pump discrimination” unprotected under the PDA. The court further found that the ex-employee had presented sufficient evidence that the termination reason was pretextual, including that she had remained in weekly contact with the company during her maternity leave, and that the manager had told her she may need extra leave if she was still breastfeeding.

Notably, the appeals court stated that Title VII and the PDA cover a “wide[] range of employment decisions entailing female physiology,” and cited to precedent that found unlawful a policy that did not allow post-partum women to return to work until they had sustained a normal menstrual cycle. It is unclear how far this language could reach, for example, to women who have health problems related to other aspects of their reproductive systems.

Bottom Line for Employers: Employers may not take an adverse action against a woman because she is lactating, or on the basis of other as-yet undescribed conditions that relate more generally to “female physiology.” The Fifth Circuit made clear in this decision that Title VII and the PDA do not require special accommodations to women due to pregnancy and related medical conditions, including special accommodations for lactation. However, under amendments to the Fair Labor Standards Act (the “FLSA”), at a minimum employers must provide rest breaks and a clean, secure area for new mothers to express milk.

A link to the opinion is here:

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Update Your Company’s Fair Credit Reporting Act Summary of Consumer Rights Form Prior to January 1, 2013

The government is changing your hiring process.  The federal Fair Credit Reporting Act (“FCRA”) requires that employees and job applicants provide written consent before an employer can use a third party credit reporting agency to obtain a credit report, including a criminal background check.  In addition, before an employer can take an adverse employment action against an individual on the basis of information learned through a credit report, it must provide him/her with a copy of the FCRA’s Summary of Consumer Rights form.

When the new Consumer Financial Protection Bureau recently took over enforcement of the FCRA from the Federal Trade Commission, it revised several key forms to reflect this change, including the required Summary of Consumer Rights form.  Use of the new Summary of Consumer Rights form, available here, is mandatory beginning January 1, 2013.

Bottom Line for Employers:

Employers need to update their Summary of Consumer Rights form by January 1, 2013 to be in compliance with the FCRA.  Please note that some states have additional credit and background check procedures, which should also be reviewed periodically for compliance.

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