Hunton Employment & Labor Law Perspectives : Employment Lawyers & Attorneys : Hunton & Williams Law Firm : Labor Law Legislative Updates

The EEOC recently published its annual Performance and Accountability Report for its 2010 Fiscal Year.  In its Report, the EEOC attributed “[t]his surge” in the number of charges filed “to the expanded statutory authorities that EEOC has been given with the ADA Amendments Act of 2008; the Genetic Information Nondiscrimination Act of 2008; and the Lilly Ledbetter Fair Pay Act of 2009,” as well as the “EEOC becoming more accessible, making charge filing easier and providing better, more responsive customer service.”

The number of discrimination charges filed with the EEOC likely will continue to increase into 2011.  As employers continue to feel pressure from the current economic climate to downsize and streamline their operations, it is more important than ever to follow and enforce lawful disciplinary and discharge policies, as well as ensure any leave and/or accommodation policies are compliant with the most recent amendments to the ADA, Genetic Information Nondiscrimination Act and the Lilly Ledbetter Fair Pay Act. 

For a complete breakdown of EEOC charge information by year, including the number of charges filed and the protected characteristic involved, please visit the EEOC’s website.

Application of Test, not just Adoption of Test, Determines Timeliness

As part of its hiring process the City used a written exam for firefighters to assess their qualifications.  Based on applicants test results, the City created an eligibility list and only hired individuals from the list who scored high enough to be classified as “well qualified.” 

The City argued that the firefighters claims were not timely because limitations began to run when the City announced the adoption and use of the test and the eligibility list.  The Court determined, however, that the unlawful employment practice was not just the adoption of the test, but also the application of the test, which occurred each time the City hired firefighters.  The Court reasoned that although a claim based on the adoption of the test would be untimely, this did not mean that no new violations could occur based on the City’s continued use of the test.  As a result, to have a timely claim, all the firefighters needed to prove was that the City used the unlawful practice that caused a disparate impact during the limitations period.

Without mentioning the Lilly Ledbetter Act, the Court rejected the City’s arguments that present effects of past discrimination could not lead to Title VII liability for the hiring test.  Instead, the Court distinguished disparate impact claims from disparate treatment claims, explaining that disparate impact claims do not require discriminatory intent.  Accordingly, the Court noted that plaintiffs bringing disparate impact claims do not need to show that deliberate discrimination occurred within the limitations period.  

Advice for Employers

So what should employers do?  If a policy or practice is in use, limitations for a disparate impact claim based on that policy or practice will run from each time the policy is applied.    In order to limit liability, employers should review their current polices and practices and consistently monitor the application of the policies and practices to ensure that there is no disparate impact.

Although the proposed regulation is unlikely to be limited to independent contractor classifications, this all comes on the heels of renewed DOL efforts to crack down on the misclassification of employees as independent contractors.  During a Live Q&A Session to discuss the new Regulatory Agenda, Nancy Leppink, Deputy Administrator of WHD, was asked whether WHD is concerned that the implementation of rules tightening worker classification enforcement will upset the benefits associated with employing independent contractors.  Ms. Leppink responded by essentially parroting a DOL fact sheet on the proposal, which states that “updating the recordkeeping requirements to promote transparency is expected to encourage greater levels of compliance by employers, to enhance awareness among workers of their status as employees or independent contractors . . . and to facilitate DOL enforcement.”

Some of the issues that DOL will need to consider as it formulates the rule include:

• Whether any industries will be exempted from the classification analysis and enhanced recordkeeping requirements.
• Whether the classification analysis is to be conducted on a position-by-position or a worker-by-worker basis.
• The required content of analysis disclosures to workers and whether each worker will have to be formally notified of his or her FLSA status and how it was determined.
• What the proposed retention requirements for classification analysis will be in light of the Lilly Ledbetter Act.

If the proposed rule is implemented, employers will almost certainly be required to expend substantial amounts of time re-analyzing worker classifications and drafting new documents to comply, ultimately generating a significant amount of paperwork.  DOL plans to issue a formal Notice of Proposed Rulemaking for this rule in August, at which time employers will have an opportunity to submit comments on the proposed rule. Stay tuned for more information in August. In the meantime, employers should examine their current worker classifications to protect and prepare themselves.