Masterpiece Cakeshop: A Collision Course of Civil Liberties and Religious Rights

Masterpiece Cakeshop: A Collision Course of Civil Liberties and Religious Rights

The civil liberties of gay couples and the religious rights of a Colorado business owner were recently on a collision course. Then, on June 4, 2018, the U.S. Supreme Court found a detour to avoid the collision…at least for now.

The Court held that, in some instances, a balance must be struck between protecting gay persons in the exercise of their civil rights and the rights of a business owner to express his religious-based objection to gay marriage. The majority of the Supreme Court held that the Colorado commission’s treatment of the baker violated Colorado’s duty under the First Amendment not to have laws or regulations that express an overt hostility to a religion or a religious viewpoint. This case is known as the Masterpiece Cakeshop case.

This case is of special interest to human resources professionals and business owners because the same policy intersection could easily arise in an employment context in Wisconsin. Wisconsin has a law similar to the Colorado law that makes it unlawful to give preferential treatment to some classes of persons in providing services or facilities in any public place of accommodation or amusement because of sex, race, color, creed, sexual orientation, national origin or ancestry. In Wisconsin Statutes § 106.52(3), a person who feels that he or she has been a victim of unlawful treatment under the law may file a claim with the Equal Rights Division of the Wisconsin Department of Workforce Development, the same entity that considers violations under the Wisconsin Fair Employment Act.

In addition, certain Wisconsin employers may have the constitutional protection of the Free Exercise Clause of the First Amendment to the U.S. Constitution. That clause states that “Congress shall make no law . . . prohibiting the free exercise” of religion.

The rights and remedies available to everyone under state and federal law — whether state fair employment or public accommodation laws, or Title VII, the Americans with Disabilities Act, or similar federal laws — often create policy conflicts for employees, employers and businesses in general. The wise HR professional will stay alert to the intersection and potential conflicts that will necessarily arise in the workplace and in the marketplace. For now, the resolution to the underlying policy conflict in Masterpiece Cakeshop between public accommodation rights for gay couples and the religious expression rights of small businesses will need to be addressed another day.

 

Harassment in the Headlines, Employers in the Headlights?

Harassment in the Headlines, Employers in the Headlights?

It is hard to ignore the daily dose of headlines that assert new allegations of sexual harassment or abuse in American society. While the problem of sexual harassment may be analyzed on many levels – personal, societal, historical, cultural, to name a few – sound legal analysis must not be overlooked by employers and employees when considering specific workplace situations.

When sex harassment occurs in in an employment setting, the conduct is likely addressed by Wisconsin and federal law.  Some forms of harassment may suggest criminal repercussions, although many forms of sexual harassment may not be considered a crime, depending on circumstances.

While all bad behavior in the workplace is inappropriate, not all inappropriate behavior may be contrary to state and federal laws.  Inappropriate conduct may not merely be illegal, it may be bad for business, including lowering employee morale.  The Equal Employment Opportunity Commission (EEOC) states that “workplace harassment affects all workers, and its true cost includes decreased productivity, increased turnover, and reputational harm,” all of which is a drag on productivity.  (Select Task Force on the Study of Harassment in the Workplace; June 2016.)

Given the wide range of sexually inappropriate conduct, it behooves employers and employees to know the law.  Sex harassment is a form of unlawful discrimination based on sex.  Wisconsin defines discrimination because of sex to include implicitly or explicitly making or permitting acquiescence and/or submission to sexual harassment a term or condition of employment.  It is unlawful for an employer to permit conduct that has “the purpose or effect of substantially interfering with an employee’s work performance or creating an intimidating, hostile or offensive work environment.”  Substantial interference with an employee’s work performance or creation of an intimidating, hostile or offensive work environment may be established when the conduct is such that a reasonable person under the same circumstances as the employee would consider the conduct to be sufficiently severe or pervasive to interfere substantially with the person’s work performance or to create an intimidating, hostile or offensive work environment.  Usually the offensive conduct must be unwelcome for the conduct to be deemed unlawful under Wisconsin law.

Federal law is similar to Wisconsin law.  Wisconsin law applies to any employer with one or more employees; federal law applies to employers with 15 or more employees.

What should employers do to protect themselves against conduct by employees that may lead to harassment complaints?

1. Review your harassment policy to make sure it is up-to-date and has been recently communicated to your employees.

2. Conduct harassment training for management and non-management employees if you have not done so within the past year. The EEOC recommends that the training be live and interactive, if possible, or computer-based and interactive if live training is not possible.

3. If applicable, conduct appropriate harassment training for your organization’s board of directors.

4. Analyze whether your organization has been unintentionally tolerating or ignoring an employee who has a reputation for engaging in inappropriate behavior.

5. If the allegations of inappropriate behavior or harassment in your organization are widespread or involve someone high up in the organization, consider outside legal counsel to assist with your investigation. Outside counsel will be able to help you analyze legally sound investigation techniques and what, if any, remedial action should be taken.

In conclusion, it is important to recognize that bad behavior is bad for business, whether or not the conduct is against the law.  Consult with your legal advisor to review whether your harassment policies are up to date and whether key employees in your company should have moral turpitude clauses added to their employment agreements (when there are such employment agreements) to assist the employer in terminating employees who are behaving poorly, even if their conduct does not rise to the level of unlawful harassment under state or federal law.  Seek legal advice promptly if you suspect behavior that may violate state or federal harassment laws.

 

Wisconsin Fair Employment Act & the ADA

What can Wisconsin Employers Learn From an Employer in Churubusco, Indiana (Pop. 1,800)?

Wisconsin employers should be aware of the root cause of a lawsuit that led to a settlement between the U.S. Equal Employment Opportunity Commission (EEOC) and an Indiana employer. The EEOC is the federal agency that enforces the Americans with Disabilities Act (ADA). Like the Wisconsin Fair Employment Act, the ADA provides certain protections to employees with disabilities.

The EEOC started a lawsuit against an Indiana employer that resulted in a settlement that requires the employer to pay a job applicant thousands of dollars. The employer is located in Churubusco, Indiana, a town with a population of about 1,800 people.

According to the EEOC’s lawsuit, the job applicant, an experienced and qualified machinist, applied and interviewed for a machinist position. Upon completion of the interview, the employer extended a job offer conditioned on the applicant passing a physical exam. The employer later withdrew the offer because the exam report disclosed a possible vision impairment related to a congenital eye condition. During the litigation process, the parties’ expert ophthalmologists agreed that the job applicant had normal vision.

The EEOC maintained that withdrawing a job offer based on unsubstantiated stereotypical beliefs about a medical condition violates the ADA, which prohibits discrimination based on disability or perceived disability. The EEOC filed suit in federal court to prove its point.

The EEOC and the employer reached a consent decree in March that requires the company to pay the applicant $35,000. The employer also agreed to require its human resources supervisors, managers and business unit managers to attend a training seminar on disability discrimination. The employer must also maintain a disability policy, post a notice informing employees that federal law prohibits discrimination, and report to the EEOC over a five-year period in instances when it withdraws a job offer based on the results of its post-offer physical exam.

“This settlement demonstrates that all employers, even those who are the main employer in a small town, must abide by federal anti-discrimination law,” said Kenneth L. Bird, regional attorney of the EEOC’s Indianapolis District Office.

What are the lessons for Wisconsin employers?

  • First, be aware that even employers in small communities are not beyond the reach of the EEOC.
  • Second, know that both federal and Wisconsin law set guidelines against discrimination based on disability, perceived disabilities and stereotypes of disabilities in the workplace.
  • Third, although post-offer physical exams are allowable in many instances, withdrawal of an offer because of a perceived disability may violate federal or Wisconsin law.
  • Fourth, it is important that those responsible for hiring decisions are fully trained and knowledgeable about federal and state laws that affect hiring practices in the workplace.

For more information, contact your Anderson O’Brien attorney for an in-depth analysis covering compliance with all employment-related laws.

Social Media Protection Act

Wisconsin’s new Social Media Protection Act is significant for employers. There have been several high-profile cases around the nation in the last several years that have challenged the employer practice requiring that their employees provide the employer with password information to the employee’s personal Internet accounts. Such information allows the employer to access the employee’s personal social media accounts, like Facebook. Facebook itself has spoken out against the practice.

Now, Wisconsin has joined a small-but-growing number of states that prohibit an employer from requesting or requiring an employee or job applicant, as a condition of employment, to disclose access information to his or her personal Internet account or to otherwise grant access to or allow observation of that account. The new law, which may be found here, also prohibits an employer from discharging or discriminating against an employee or applicant who refuses to disclose such access information.

“Access information” is defined under the law as a user name and password or any other security information that protects access to a personal Internet account.

There are several important exceptions to the law. The law does not prohibit an employer from:

  • Requesting or requiring an employee to disclose access information in order for the employer to gain access to or operate an electronic communications device supplied or paid for in whole or in part by the employer or in order for the employer to gain access to an account provided by the employer, obtained by virtue of the employee’s employment relationship with the employer, or use for the employer’s business purposes. Thus, if an employer sets up a LinkedIn account for the employee, the new law allows the employer to require the disclosure of access information.
  • Discharging or disciplining an employee for transferring the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account without the employer’s authorization.
  • Subject to some exceptions, conducting an investigation or requiring an employee to cooperate in an investigation of any alleged unauthorized transfer of the employer’s proprietary or confidential information or financial data to the employee’s personal Internet account, if the employer has reasonable cause to believe that such a transfer has occurred. Similarly, the employer is allowed in instances of alleged employment-related misconduct or a violation of the employer’s work rules as specified in an employee handbook to request access information, if the employer has reasonable cause to believe that activity on the employee’s personal Internet account relates to that misconduct or violation of a work rule. In these situations, an employer may require an employee to grant access to the employee’s personal Internet account, but may not require the employee to disclose access information for that account.
  • Restricting or prohibiting an employee’s acts as to certain Internet sites while using an electronic communications device supplied or paid for in whole or in part by the employer or while using the employer’s network or other resources.
  • Viewing, accessing or using information about an employee or applicant for employment that may be obtained without access information or that is available in the public domain.
  • Complying with a duty to screen applicants for employment prior to hiring or a duty to monitor or retain employee communications that is established under state or federal laws, rules, or regulations or the rules of a self-regulatory organization, as defined in 15 USC 78c (a)(26).
  • Requesting or requiring an employee to disclose the employee’s personal electronic mail (email) address.

Considerations for Employers:
Although many Wisconsin employers may not have been requiring employees or applicants to disclose access information prior to the enactment of the new law, wise employers should consider how to lawfully regulate its employees’ use of the Internet and social media while on the job. The new law assists the employer in setting enforceable guidelines.

In some instances, it may be necessary for an astute employer to regulate employee communications with respect to the employee’s personal social media sites in matters that pertain to the employer’s business, like protecting the employer’s confidential information. The new law assists an employer in drafting and implementing such policies, although some questions remain. An employer is advised to review its employee handbook, Internet use policies and business practices to make sure that they are consistent with the new Wisconsin law Protection Act Protection Act

Employee or Independent Contractor? Classify Workers Correctly!

If your business hires people to help with the work (whether office tasks or production of goods or services), then you need to properly classify the workers as employees or independent contractors.

Here is one important reason why classification matters: Generally, you must withhold income taxes and withhold and pay Social Security and Medicare taxes and unemployment tax on wages paid to employees. You generally do not have to withhold or pay taxes on payments to independent contractors for the work they do for you.

It may be tempting for a business to misclassify workers as independent contractors and not as employees. Independent contractors are not subject to the minimum wage and overtime provisions of the Fair Labor Standards Act, nor are they generally eligible for unemployment or worker’s compensation benefits or employer-provided fringe benefits.

The issue of worker classification has captured the attention of the IRS. The head of employment tax policy for the IRS recently told the American Bar Association about plans to increase enforcement of worker classification regulations. This means that businesses should anticipate increasing review over their classification of workers as independent contractors instead of as employees.

Employers who misclassify employees face an array of possible penalties. The IRS may seek to recover unpaid employment taxes from employers who misclassify an employee as an independent contractor. Employers also face potential overtime compensation, FICA, worker’s compensation, ERISA issues and other tax liabilities on the federal and state levels.

Proper classification is based on various criteria, but the most basic criterion is the “right of control.” Generally speaking, an employer-employee relationship exists when the person for whom the services are performed has the right to control and direct the individual performing the service regarding the results of the work and the measures used to accomplish those goals.

Common Law Rules
Factors that affect the degree of control fall into three categories:

    1. Behavioral: Does the business control or have the right to control what the worker does and how the worker does his or her job?
    2. Financial: Are the business aspects of the worker’s job controlled by the payer? (These include things like how a worker is paid, whether expenses are reimbursed, and who provides tools or supplies, for example.)
    3. Type of Relationship: Are there written contracts or employee-type benefits (i.e. pension plan, insurance and vacation pay)? Will the relationship continue, and is the work performed a key aspect of the business?

A business must weigh all such factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors may suggest that the worker is an independent contractor. There is no “magic” or set number of factors that “make” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors that are relevant in one situation may not be relevant in another.

The key is to look at the entire relationship, consider the degree or extent of the right to direct and control, and then document each of the factors used in arriving at the determinations.

There is a long-standing misconception among employers that anyone paid less than $600 a year may be classified as an independent contractor. In fact, there is no minimum limit on amount of remuneration or number of hours worked that is relevant to classification determination.

Solutions
What should a business do to prevent or reduce misclassification risks?

One effective approach is a self-audit where the business evaluates its hired help with the assistance of a professional to determine the level of misclassification-related risk.

Businesses that self-identify potential risks are able to initiate appropriate corrective measures. The ability and willingness to self-correct comes with real economic benefits – the costs associated with a self-audit and self-correction plan are likely less than the fines and fees that might result from a single IRS audit or a worker lawsuit for overtime wages, among other claims.

In addition, Section 530 of the Internal Revenue Act of 1978 provides a safe harbor. It states in part that an individual will not be considered an employee if a taxpayer treated him or her and other workers performing similar tasks as non-employees for all periods, had a reasonable basis for doing so and filed required information and other returns consistently with that status. See your legal or tax professional for additional assistance.

Social Media Policies and the Successful Business

A business’s success strategy should include ways to protect its confidential, proprietary and trade secret information from its competitors. One way to guard such information is to establish policies that limit what the company’s employees may communicate to others. Recently, however, the National Labor Relations Board’s Acting General Counsel (AGC) has taken aim against numerous so-called social media policies. The AGC has determined that many such policies run afoul of the National Labor Relations Act (NLRA).

The NLRA grants employees the right to engage in protected, concerted activities for “mutual aid or protection” and freedom of association. These rights apply whether or not the workplace is unionized. An employer’s interference with such rights may constitute an unfair labor practice.

With the growing number of people using social media like Facebook, Twitter and LinkedIn, the astute business should consider policies that address its employees’ use of social media resources without violating the NLRA. Drafting social media policies that pass muster with the AGC has been and is a challenging task, however. In a memorandum issued on May 30, 2012, the AGC highlights the importance of a well-drafted social media policy, while concluding that many current policies that the AGC has revised are unlawful because they violate, or potentially violate, the NLRA.

For example, the AGC concluded that the social media policy of a nationwide retailer that encouraged employees to “use technology appropriately” by requiring that the employees not release confidential customer, co-employee or company information violated the NLRA. He found that the policy would “reasonably be interpreted as prohibiting employees from discussing and disclosing information regarding their own conditions of employment,” a right protected under the NLRA.

Another social media policy was found to be unlawful where employees were instructed to be sure that their electronic posts are “completely accurate and not misleading and that they do not reveal non-public information on any public site.” The AGC concluded that the term “completely accurate and not misleading” is overbroad because it would reasonably be interpreted to apply to discussions about the employer’s labor policies and its treatment of employees. Such interaction among employees is protected under the NLRA.

Another policy that was reviewed, one that cautioned employees that they should first consult with their employer when they have any doubt about the appropriateness of posting company information, was determined to violate the NLRA. The AGC concluded that “any rule that requires employees to secure permission from the employer as a precondition” to engaging in protected activity violates the NLRA.

What can an employer do to protect its confidential, proprietary and trade secret information? An employer should not avoid developing a social media policy that appropriately limits employees’ e-expression, but should be careful to draft a policy that does not run afoul of the NLRA, at least in the opinion of the NLRB’s legal counsel. The AGC provided an example regarding an acceptable social media policy. Here are guideposts to developing an acceptable social media policy:

• Employers need to review their desired policies to clearly express legitimate business interests of the employer.

• The employer should consider and list specific examples of confidential, proprietary, and trade secret information that are off limits from disclosure.

• The policy should set forth why the restrictions are necessary.

• The policy should set forth that it is not intended to restrict the rights that employees have under the NLRA. However, simply setting forth that the social media policy is not intended to violate the NLRA will not save the policy from being unlawful if it otherwise chills protected rights of employees.

The AGC Memorandum raises more questions than it answers, but this much is clear: The astute business will not put its head in the sand and simply ignore the risks of employees’ use of social media. It will develop a fair and balanced policy that does not overreach into the arena of employees’ protected activities.

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