GEICO Insurance Investigators Not Exempt from FLSA


On December 23, 2015, the 4th Circuit, in Calderon v. GEICO, ruled that GEICO insurance investigators are not subject to the administrative exemption of the FLSA and therefore, are entitled to overtime.   The plaintiff investigators follow company procedures and spend 90% of their time investigating potential fraudulent insurance claims.  GEICO has been classifying its investigators as exempt for a long time.

The administrative exemption applies to those who: (1) are paid, on a salary basis, in an amount not less than $455 per week; (2) “whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers;” and (3) whose primary duty involves the exercise of discretion and independent judgment. 29 C.F.R. §541.200(a).

The district court found that GEICO could not establish that the insurance investigators primary duties involved independent judgment and discretion, therefore, summary judgment was granted in favor of the plaintiffs.  The 4th Circuit upheld the decision for plaintiffs but relied upon the second element of the exemption – whether the work was directly related to the management or general business operations – find that their primary duty was “the investigation of suspected fraud, including reporting their findings.”  The court stated “[t]hus, in the end, the critical focus regarding this element remains whether an employee’s duties involve “‘the running of a business,’” Bratt v. County of Los Angeles, 912 F.2d 1066, 1070 (9th Cir. 1990), as opposed to the mere “‘day-to-day carrying out of [the business’s] affairs,’” Desmond I, 564 F.3d at 694 (citing Bratt,912 F.2d at 1070).

The court further stated that “[r]egardless of how [i]nvestigators’ work product is used or who the Investigators are assisting, whether their work is directly related to management policies or general business operations depends on what their primary duty consists of… the primary duty of the Investigators… is not analogous to the work in the “functional areas” that the regulations identify as exempt. 29 C.F.R. § 541.201(b).”  Conversely, the court found that the primary duties were directly analogous to the work the regulations identify as not satisfying the directly relatied element. See 29 C.F.R. §§ 541.3(b)(1), 541.203(j).   Admitting that the issue was very close, the court held GEICO could not establish that the plaintiffs’ primary duties were “plainly and unmistakably” directly related to the company’s management or general business operations.

This case is yet another reminder of the importance of properly classifying your employees pursuant to the FLSA.

For more information on the FLSA or any further employment related matters, please contact Dana Perminas, at 312-334-3474 or for more information.


As a follow up to prior blogs, I wanted to provide a list of those states and cities that have enacted legislation compelling employers to provide their employees with paid sick leave.   We had previously discussed the new laws in California and Philadelphia.  Now Pittsburgh is following suit, and so have other states and cities. Under the new Pittsburgh law, effective January 11, 2016, all full-time and part-time employees working in the city of Pittsburgh, excluding independent contractors, state and federal employees, any members of construction unions subject to collective bargaining agreements, and seasonal employees notified in writing when hired that they will not work more more than 16 weeks during the year, will accrue one hour of paid sick leave for every 35 hours worked (including overtime hours).

Pittsburgh employers with 15 or more employees must permit employees to accrue 40 hours of paid sick leave per year while employers with less than 15 must permit employees to accrue 24 hours of paid sick leave per year.  Those employees must be allowed to carry over accrued sick leave from year to year but employers need not allow them to use more than 40 hours (or 24 for smaller employers) of that paid sick leave in a given year.  In lieu of the carryover, employers can choose to provide all of the required sick leave at the beginning of the year, to avoid that carryover of unused leave.   For those smaller employers, they are only required to provide unpaid sick leave (accrued at the same rate state above) for the first year after the law is enacted.  The Pittsburgh law also has stated terms and regulationsfor permitted use and increments of using the leave, notice, documentation and posting requirements, recordkeeping and prohibited conduct, to name a few.

As far as the rest of the country, California, Connecticut, and Massachusetts are the only states that have enacted legislation to allow statewide paid sick leave.  It is expected that other states and cities will attempt to follow the trend– specifically Oregon, who recently adopted a paid sick leave and safe[1] leave law that will be effective next year.  Tacoma, WA and Montgomery County, MD (the first county to do so) also passed sick and safe leave laws also to be effective in 2016.  In some jurisdictions, such as San Diego, proposed laws such as these have been met with opposition.

As far as cities go, Eugene, OR, Newark, Jersey City, Irvington, Passaic, East Orange, Paterson, Trenton, Montclair, Bloomfield, New York City, Oakland, Philadelphia, Pittsburgh (discussed above, effective 1/1/16), Portland, OR, San Francisco, Seattle, and Washington, D.C., already have laws on the books that allow workers to earn paid sick leave, or in a few of those cities, also allows workers to earn paid safe days as well.

For more detailed information on the new Pittsburgh law, or any employer vacation/sick/PTO policies around the country, please contact Dana Perminas at 312-334-3474 or for more information.

[1] Safe Day laws involve allowing an employee paid days off in the event care or treatment is needed for domestic violence, sexual assault or stalking.


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“Ban the Box” Introduced to Congress

On September 10, 2015, a bill was introduced by Senator Cory Booker (D-NJ) and Representative Elijah Cummings (D-MD) marking the first time “ban the box” has been proposed at the federal level.  If passed, The Fair Chance Act would prevent federal agencies and contractors from inquiring about prospective employees’ criminal records before extending a formal job offer.  Once a job offer is presented, the employer may ask about an applicant’s criminal background and revoke the job offer based on the result of a criminal background check.  Law enforcement, national security agencies, and positions with access to classified information will be exempt from this proposed law. For more information about the proposed Fair Chance Act, contact Joseph Messer at or (312) 334-3440.


Read More on “Ban the Box”

                Illinois Enacts “Ban the Box” Law Impacting Private Employers

                Private Employers May be Impacted by the “Ban the Box” Approach in 2014

                The “Ban the Box” Movement Continues                

               “Ban the Box” and Local Ordinances – What Employers Should Know

Employer Alert - To What Extent Do Employees Have the Right to be Accommodated with Respect to Their Religious Beliefs?

Employees refusing to do their job duties based upon religious beliefs have been a trending topic in the news recently.  For example, Kim Davis, a county clerk in Kentucky, gained national media attention when she refused to issue marriage licenses after the U.S. Supreme Court ruled that the right to marriage is guaranteed to same-couples by the Fourteenth Amendment. In the midst of the news stories surrounding the Kim Davis controversy, another employee filed a federal lawsuit based upon her employer placing her on administrative leave due to her religious beliefs inhibiting her ability to perform her job duties.  Charee Stanley, a Muslim flight attendant for ExpressJet Airlines, was recently placed on administrative leave after she refused to serve alcohol for religious reasons.  Stanley began her employment prior to converting to the Muslim faith.

Stanley asked her supervisor for a religious accommodation, i.e., having one of her colleagues serve the alcohol while she did another job duty.  The supervisor agreed.  The accommodation worked for a while, until one of her colleagues filed an internal complaint against Stanley claiming she was not doing her job because she refused to serve alcohol.  Subsequently, the airline revoked the religious accommodation and placed her on administrative leave without pay for 12 months - “after which her employment would be administratively terminated.”

Stanley is now seeking redress from the EEOC.  Stanley claims she was disciplined for following the direction of her employer and that her employer had no justification to revoke her religious accommodation.  Stanley’s position is that ExpressJet acknowledged serving alcohol was “not an essential duty or function of flight attendant” by granting the religious accommodation and the fact that the revoked the accommodation is in violation of Title VII of the Civil Rights Act of 1964.

While employers should be mindful and knowledgeable about their duties when it comes to accommodating employees based on religious beliefs, employers also need to be aware of their rights.  Title VII provides that an employer must reasonably accommodate an employee’s religious beliefs and practices unless doing so would cause “undue hardship on the conduct of the employer’s business.”  The U.S. Supreme Court has ruled that “undue hardship” means that an employer need not incur more than minimal costs in order to accommodate an employee’s religious practices.  The EEOC has interpreted “undue hardship” to mean that an employer can show that a requested accommodation causes it an undue hardship if accommodating an employee’s religious practices requires anything more than ordinary administrative costs, diminishes efficiency in other jobs, infringes on other employees’ job rights or benefits, impairs workplace safety, causes coworkers to carry the accommodated employee’s share of potentially hazardous or burdensome work, or if the proposed accommodation conflicts with another law or regulation.

Accordingly, religion is not an automatic ticket employees can use to avoid certain job duties.  There are limitations and employers need to be aware of their rights under Title VII.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or


Independent Contractor Classification Narrowed by Department of Labor

On July 15, 2015, the Department of Labor (“DOL”) issued new guidance which would allow more workers to qualify for overtime pay.  In the Administrator’s Interpretation No. 2015-1, the DOL is narrowing the definition of an independent contractor taking the position that most work should be performed by employees and independent contractors should be used sparingly. Under this new guidance, the department considers six factors when determining a worker’s status:

■ The extent to which the work performed is an integral part of the employer’s business

■ The worker’s opportunity for profit or loss depending on his or managerial skill

■ The extent of the relative investments of the employer and the worker

■ Whether the work performed requires special skills and initiative

■ The permanency of the relationship

■ The degree of control exercised or retained by the employer

These six factors will be examined in relation to one another and no single factor can determine into which category a worker falls. Additionally, hiring business entities and independent contractors will not consequently protect an employer from liability under the Fair Labor Standards Act.

Finally, the DOL reinforces that the type and scope of work being performed should be reviewed before an independent contractor is hired. When it is appropriate to hire an independent contractor, ensure the correct indemnification provisions are in place to protect a company from any wage and hour claims that may arise. It is an employer’s duty to audit the status of all independent contractors in the event their duties or the work being performed becomes more akin to that of an employee as opposed to an independent contractor.

For more information on the new DOL guidance or any other employment law related matters, please contact Dana Perminas at 312-334-3474 or for more information.


Effective July 1, 2015, employers in California will be required to provide all employees (full-time, part-time and temporary) who, on or after July 1, 2015, work in California for 30 or more days within a year from the beginning of employment, paid sick leave. Employees will earn at least one hour of paid leave for every 30 hours worked, or in other words 3 days of paid sick leave per year.  Employees can use the leave for themselves or a family member.  “Family member” is defined by the law to include children, parents, grandparents, grandchildren, siblings, spouse and registered domestic partner. Accrual begins on the first day of employment or July 1, 2015, whichever is later.  An employer has two options in terms of accrual and provision of leave; 1) If the employer’s policy is to provide sick leave only as it accrues, employers must allow the employee to carry over any unused sick leave to the next year if unused.  Employer can limit accrual to a total of 6 days.  Employers can still (regardless of their policy when sick leave is awarded) limit use of paid sick leave to 3 days in a year.; or 2) If the employer provides the sick leave upfront at the beginning of the year before it accrues, the employer does not have to allow the employee to carry over unused time to the next year.

If the employer’s policy already provides for sick leave or contains a PTO policy that provides for an amount of paid leave (no less than 3 days) that may be used for the same purposes and under the same conditions (including accrual, carry over and use requirements) of the new law, an employer need not provide additional paid sick leave.

Employees must be paid at their standard rate of pay for sick leave used.  If the employee earns commissions or bonuses, those items must be factored into the sick leave payment.

There are several things employers must do to comply with the new law including:

1) Separately track sick leave accrual and use.  This must be on a pay stub or a document issued the same day as a paycheck.  Also, employers must keep records showing how many hours have been earned and used for a period of three years.

2) Display poster on paid sick leave where employees can easily read it. -

3) Provide written notice to employees with sick leave rights at the time of hire.  A new form of the notice required by Labor Code Section 2810.5 (the “Wage Theft Protection Act”) needs to be given to employees, advising them of their rights under the new law.

As a best practice, all employers should allow eligible employees to use accrued paid sick leave upon reasonable request.  Also, employers need not do not pay an employee at termination for sick leave pay that was not used, but keep in mind if an employer’s policy grants vacation time, or PTO, that accrued time most likely will be subject to payout under California law.

For more information on the new California law, employer vacation/sick/PTO policies or any other employment law related matters, please contact Dana Perminas at 312-334-3474 or for more information.

Dear EEOC: Not All Attorneys Are The Same

On September 29, 2014 the Second Circuit Court of Appeals, in EEOC v Port Authority of New York and New Jersey, September 29, 2014, Livingston, D) held that the EEOC failed to allege sufficient facts to state a plausible claim that female and male attorneys at the Port Authority performed “equal work” despite receiving unequal pay as the EEOC could not allege any facts supporting a comparison between the attorneys’ actual job duties, thereby precluding a reasonable inference that the attorneys performed “equal work.”

Congress passed the EPA in 1963 “to legislate out of existence a long‐held, but outmoded societal view that a man should be paid more than a woman for the same work.”  Belfi v. Prendergast, 191 F.3d 129, 135 (2d Cir. 1999).  To prove a violation of the EPA, a plaintiff must demonstrate that “[(1)] the employer pays different wages to employees of the opposite sex; [(2)] the employees perform equal work on jobs requiring equal skill, effort, and responsibility; and [(3)] the jobs are performed under similar working conditions.”  Belfi, 191 F.3d at 135.

To satisfy this standard, a plaintiff must establish that the jobs compared entail common duties or content, and do not simply overlap in titles or classifications.  

At the pleading stage, a plausible EPA claim must include “sufficient factual matter, accepted as true” to permit “the reasonable inference” that the relevant employees’ job content was “substantially equal.”    Such factual allegations are necessary to provide “fair notice [to the defendant] of the basis for [the plaintiff’s] claims.” Yet, despite a three‐year investigation conducted with the Port Authority’s cooperation, the EEOC’s complaint and incorporated interrogatory responses relied entirely on broad generalizations drawn from job titles and divisions, and supplemented only by the unsupported assertion that all Port Authority nonsupervisory attorneys had the same job, to support its “substantially equal” work claim.  As such, the EEOC’s complaint was dismissed.

The EEOC’s argument that “all lawyers perform the same or similar function(s)” and that “most legal jobs involve the same ‘skill’ was rejected by the Court which stated that “accepting such a sweeping generalization as adequate to state a claim under the EPA might permit lawsuits against any law firm – or, conceivably, any type of employer – that does not employ a lockstep pay model.  Without more, these facts cannot be read to raise the EEOC’s “substantially equal” work claim “above the speculative level.”

Unfortunately for the Port Authority, even though they received the result they were seeking in this case, they had been cooperating with and providing the required information to the EEOC since 2007, when this matter began, stemming from a discrimination charge.  The EEOC then conducted a three year investigation into the EPA and determined in 2010 that the Port Authority violated the law.  Luckily for the Port Authority, the District Court and the 2nd Circuit disagreed and held the EEOC did not meet its burden proving any violation of the EPA occurred.   

For more information on the EEOC or any other employment law related matters, please contact Dana Perminas at 312-334-3474 or for more information.


On September 24, 2014 the Northern District of Illinois, in Stevenson v. FedEx Ground Package System, Inc., No. 13 C 138 (N.D. Illinois 2014, Judge John J. Tharp, Jr.), held that FedEx’s policy that employees notify the company prior to seeking medical treatment for a workplace injury interferes with the right of employees to seek medical treatment for those injuries. 

Under Illinois law, it is unlawful for an employer to terminate an employee for exercising a right guaranteed by the Illinois Workers’ Compensation Act, 820 ILCS 305(“IWCA”).  See 820 ILCS 305/4(h) (prohibiting employers from interfering with an employee’s exercise of IWCA rights or from discharging employees because of the exercise of IWCA rights).

FedEx company policy required immediate reporting of workplace injuries whether they required only minor first aid or professional medical treatment.   FedEx policy also required employees who wanted to seek professional medical treatment for a workplace injury to first attempt to provide advance notice to management. Under the policy, failure to provide notification to management before seeking professional medical care could subject the employee to termination.

Stevenson reported to supervisors that he was suffering from a sore back.  FedEx generated an injury report and placed Stevenson on light duty to accommodate. He did not request or seek medical treatment immediately at that time.  After working light duty on January 7, 8, 10, 11, and 12, Stevenson sought medical treatment for his back on January 13.  The physician’s assistant provided him with a “Certificate to Return to Work,” which stated: “Please keep patient on light duty/off truck work until he can have a functional capacity eval done with physical therapy to see exactly what his limitations are.” Stevenson began his next shift.  At the end of that shift, he presented the note from the physician’s assistant, notifying FedEx that he had already sought and received medical care for the January 6 incident.   He was then terminated for violation of the company policy requiring advance notice before seeking medical treatment for a work place injury. 

Stevenson then filed suit, alleging that his termination constituted retaliation for exercising a right guaranteed by the IWCA. FedEx filed for summary judgment and Stevenson filed a cross motion seeking judgment on the pleadings.

For IWCA claims alleging retaliatory the “employee must prove (1) his status as an employee of the defendant; (2) his exercise of a right granted by IWCA, and (3) a causal relationship between his discharge and the exercise of that right.” Here, the parties agreed on the first and third elements but did not agree the actions were protected by the IWCA.  Stevenson’s argument rested on whether the IWCA prohibits employers from interfering with an “employee’s attempt to exercise rights provided in the statute.”

The court held that the IWCA does not contain any language to suggest that employers may impose “minor, or even de minimis, burdens on an employee’s right to seek medical treatment… the unqualified language of the statute states plainly that employers may not interfere “in any manner whatsoever” with an employee’s exercise of his rights.” See, also 820 ILCS 305/4(h).  The court further stated that “by requiring notification before an employee seeks medical treatment, the company policy acts as an obstacle to an employee’s ability to seek medical care ‘at any time.’” 820 ILCS 305/8(a).  Firing employees “who do not comply with additional restrictions runs afoul of the statutory provision forbidding the discharge of employees for exercising these rights.” See 820 ILCS 305/4(h).

This case is a good example of Illinois’ restrictions on employment practices of employers when they are deemed to infringe on employees’ rights under the many applicable employment law statutes in Illinois.  For more information on the IWCA or any other employment law related matters, please contact Dana Perminas at 312-334-3474 or for more information.

Employer Alert! New Illinois Law Requires Accommodations for Pregnant Employees

Effective January 1, 2015, Illinois employers will be required to provide reasonable accommodations to pregnant employees and new mothers.  Women in Illinois who are physically unable to perform certain tasks of their job because of pregnancy will be guaranteed reasonable accommodations.  This new law will cover full-time, part-time and probationary employees, and it will affect employers of all sizes. 

Employers will be required to make reasonable accommodations for conditions related to pregnancy, childbirth, and related conditions, unless the employer can demonstrate that the accommodation would impose an “undue hardship” on the ordinary operation of the employer’s business.  “Undue hardship” is defined by the law as an action that is “prohibitively expensive or disruptive” when considered in light of:  (1) the nature and costs of the accommodation; (2) the overall financial resources of the facility involved in the provision of the reasonable accommodation, the number of employees at the facility, the effect on expenses of the facility, or other impact on the facility; (3) the overall financial resources of the employer with respect to the number of employees and number, type, and location of its facilities; and (4) the type of operations of the employer.  Some examples of accommodations include limits on lifting, longer or more frequent bathroom breaks, access to places to sit, water breaks, private space for breastfeeding, and time off to recover from pregnancy, childbirth and related conditions.

Under the new law, employers will not be able to require an employee to take a leave of absence if another reasonable accommodation can be provided.  Additionally, employers cannot require the employee to accept an accommodation that the employee has not requested.  The laws will also prohibit employers from retaliating against an individual who “requested, attempted to request, used or attempted to use” a reasonable accommodation for pregnancy or childbirth.

This law dds to the existing federal laws Illinois employers are already required to follow providing for employee accommodations, such as the Family and Medical Leave Act, Americans with Disabilities Act and the Pregnancy Discrimination Act.  Illinois employers should take this time to review and revise employee handbooks or policy manuals to reflect the new law.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or

Employment Law Tip for Employers #5: Telecommuting

In terms of reasonable accommodations pursuant to the Americans with Disabilities Act, telecommuting has been a national debate for years.  Employers are questioning whether telecommuting is a reasonable accommodation for employees and whether it should be permitted as an accommodation for those with disabilities.  Recently, an opinion came down from the Sixth Circuit Court reversing the decision of the District Court in EEOC v. Ford Motor Company.

The Equal Employment Opportunity Commission (“EEOC”) filed a complaint against Ford Motor Company in 2011 alleging that Ford refused to accommodate an employee, Jane Harris, who was suffering from irritable bowel syndrome.  Ms. Harris requested an accommodation to work from home due to her illness. Ford refused this request claiming that Ms. Harris’ job required in-person communication and if she could not be physically present she was not otherwise qualified for the job.  Consequently, Ms. Harris sued Ford and the EEOC pursued the case on her behalf.

In 2012, the Eastern District of Michigan ruled that Ms. Harris indeed could not perform the essential functions for her job with or without the accommodation of working from home. The Court stated that working from home is only available for an “exceptional” class of jobs that do not require “the kind of teamwork, personal interaction, and supervision that simply cannot be has in a home office situation.” 

This decision went against the EEOC guidelines on reasonable accommodations under the Americans with Disabilities Act (“ADA”), which states  that allowing employees to work from home is required since the term “reasonable accommodation” may include among other requirements “job restructuring, part-time modified work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustment or modifications of examinations, training materials or policies, the provision of qualified readers or interpreters, and other similar accommodations for individuals with disabilities.”

The EEOC appealed the Court’s decision and last month the Sixth Circuit Court released the opinion reversing the 2012 grant of summary judgment on the failure to accommodate and retaliation claims.  This decision has direct implications for employers, making it wise to reconsider their telecommuting policies and accommodations for employees with disabilities.

There are certain steps that employers can take to decrease the possibility of lawsuits for violation of the ADA by not accommodating employees with disabilities:

-          Have Detailed Job Descriptions in Place.  Drafting  detailed job descriptions will help identify what job functions are essential, which might help both employees and employers to discern if the request of accommodation is reasonable or not.  Also, this will help during litigation if an employee files a claim.

-          Document Employee Requests and Employer’s Response.  If an employee requests an accommodation, document these requests as well as all attempts made by an employer to accommodate an employee.  This will also help during the litigation process.

-          Document Policies.  An employer should make sure that all policies are documented and read by employees.  It is also essential to monitor that these policies are implemented.  If one employee is allowed to work from home and another is not, this might give rise to a lawsuit.

-          Understand What Employee Is Requesting.  Make sure to understand the employee’s request before refusing it.  Misinterpreting a request for a reasonable accommodation could lead to a lawsuit as well.

For more information on telecommuting, the ADA and other employment matters, you may contact Dana Perminas of Messer Strickler, Ltd. at (312) 334-3474 or at

EEOC's Tactics Attract Court Criticism

Despite having obtained record amounts in settlement payments from employers during its last fiscal year, the Equal Employment Opportunity Commission (EEOC) has been suing fewer companies and has lost some high profile lawsuits. 

Despite making them a priority, the EEOC lost some controversial “systemic” investigations last year. These investigations are expansive examinations of companies suspected of participating in illegal employment practices including multiple alleged victims.

In one such case where the EEOC sued CRST Van in a frivolous lawsuit alleging that CRST had failed to protect its female employees from sexual harassment, the EEOC was ordered to pay CRST $4.7 million in attorney fees, expenses and costs.  U.S. District Judge Linda R. Reade wrote in her ruling: “The EEOC cannot avoid liability for attorneys’ fees simply by artfully crafting a complaint using vague language to hide frivolous allegations.”  All of the EEOC’s claims in the lawsuit were dismissed or withdrawn by EEOC, primarily due to lack of evidence.

In another case an Atlanta magistrate judge refused to enforce an EEOC subpoena against a Georgia nursing home firm which allegedly retaliated and discriminated against home-health aides because they were disabled, older, black or had a pre-existing genetic condition.  The judge called the EEOC’s actions a “misuse of authority” and indicated that the EEOC conducted an inappropriate raid of the company.  The magistrate pointed out that one claimant was not disabled, was under age 40, was Caucasian and had no pre-existing genetic conditions.

The lesson for employers from these EEOC failures is that when the EEOC comes calling they should not automatically settle.  Rather, employers should consult with qualified attorneys to determine whether the EEOC does in fact have a legitimate claim.  If not, employers should give serious consideration to fighting the EEOC in court.  The outcome could be surprisingly positive.

Private Employers May Be Impacted by the “Ban the Box” Approach in 2014

Employers face a unique challenge when hiring new employees among a pool of applicants.  On the one hand, the employer must demonstrate due diligence by hiring an applicant that is not dangerous, unfit, unqualified or dishonest so as to avoid liability for negligent hiring.  Many employers conduct criminal background checks to screen out unfit candidates.  On the other hand, employers must be cognizant of the applicant’s rights and legal protections, especially when conducting criminal background checks. “Ban the Box” is a movement that eliminates questions about past criminal conduct on initial job applications.  The “box” refers to where an applicant is asked to answer “yes” or “no” about a criminal past on a job application.  This movement is becoming a national standard and will be a hot topic for employers in 2014.  The rationale for this movement is to avoid a potential early elimination for ex-offenders that may otherwise be qualified for a position.  This allows an applicant to compete on a level playing field based upon their qualifications.  This movement does not mean that employers may not consider criminal histories at all during the hiring process.  During or after an interview, employers are still free to conduct background checks.

Several states and counties have adopted a “ban the box” approach for public employers, including Illinois in 2013.  Some states have extended the “ban the box” approach to private employers.  For instance, Hawaii, Massachusetts, Minnesota, and Rhode Island all have laws extending the rule to private employers.  Minnesota’s “ban the box” provision limits private sector employers within the state from asking about criminal records of job applicants until an interview or a conditional job offer.

In addition to state adoption of ban the box laws, many major U.S. cities have also adopted hiring policies to remove unfair barriers to applicants with criminal records.  These major cities include:  Baltimore, MD; Boston, MA; Chicago, IL; Cincinnati, OH; Cleveland, OH; Detroit, MI; New York City, NY; Oakland, CA; Philadelphia, PA; Pittsburgh, PA; San Francisco, CA; Seattle, WA; and Washington, DC.

So how does this affect private employers?  First, this movement could eventually expand to include private employment as it did in Hawaii, Massachusetts, Minnesota and Rhode Island.  Thus, private employers may want to begin thinking about a “ban the box” approach.  Second, the U.S. Equal Employment Opportunity Commission (“EEOC”) has issued guidance on the use of criminal records in hiring decisions which has the potential to affect every U.S. employer.  While the guidance is not a law or a legally enforceable regulation, it demonstrates how the EEOC interprets the use of criminal records.  The EEOC investigates and initiates lawsuits in situations where an employer makes a hiring decision based on criminal records and does not consider whether the record is job-related or constitutes a business necessity.  This practice can create a discriminatory disparate impact on groups protected under Title VII of the Civil Rights Act.  Therefore, to avoid potential liability, employers may want to eliminate the use of criminal background checks as an initial requirement in the hiring process.

Private employers considering the “ban the box” approach should use hiring techniques based upon neutral factors.  Once an employer inquires into an applicant’s criminal background, the employer should avoid broad questions that may encompass criminal records that are too old or irrelevant for the position in question.

For more information on this topic, contact Stephanie Strickler at 312-334-3465 or

ADA Coverage: Drug v. Alcohol Users, Part 1

While statistics do not give us precise numbers of Americans that are on the job while under the influence of drugs or alcohol, it is a big problem in the U.S. that costs the country billions of dollars and leads to countless lawsuits from both employers and employees. Title I of the Americans with Disabilities Act (”ADA”) permits an employer to ensure that the workplace is free from the use of alcohol and the illegal use of drugs, as well as to comply with other federal laws and regulations that address drug and alcohol abuse, such as the Family Medical Leave Act (“FMLA”) that will be covered in our future blogs.  Simultaneously, the ADA protects alcoholics and recovering drug abusers against discrimination, but this protection is limited.  Moreover, the ADA has different policies regarding drug and alcohol users.

Drug Users and ADA Coverage

According to the ADA, if the employee or a job applicant is currently engaging in the illegal use of drugs, regardless if the user is an addict or a casual user, the employee or a job applicant is not qualified as individual with a disability and thus is not protected by the ADA.  Therefore, employers do not violate the ADA by enforcing its rules by prohibiting illegal use of drugs by employees, as long as this enforcement is done uniformly.

Qualified individuals, as provided in the ADA, are individuals who:

a)       have been successfully rehabilitated and are no longer engaged in the illegal drug use;

b)      are participating in the rehabilitation program at present time and are no longer engaged in the illegal drug use; and

c)       are erroneously considered as using drugs illegally. (42 U.S.C. § 12114(b) (1994))

It is important to note that there is an essential difference between a former drug addict and a former casual drug user.  A former drug addict may be protected under the ADA since the addiction may be considered as a substantially limiting impairment.  On the other hand, a former casual drug user is not protected according to the EEOC Technical Assistance Manual on the ADA because this user is not “substantially limited” due to a drug use. (EEOC Technical Assistance Manual on the ADA § 8.5)

Based on the “qualified individuals” definition above, the ADA does not protect those users of illegal drugs that are currently engaged in this behavior.   However, the definition of “current” has been causing a lot of difficulty to employers.  The EEOC Technical Assistance Manual on the ADA provides this definition: “’Current’ drug use means that the illegal use of drugs occurred recently enough to justify an employer's reasonable belief that involvement with drugs is an on-going problem. It is not limited to the day of use, or recent weeks or days, in terms of an employment action. It is determined on a case-by-case basis.” Also, if an individual tests positive for the illegal use of drugs, this person is considered a current drug user under the ADA (EEOC Technical Assistance Manual on the ADA § 8.3)

Sometimes a question is raised whether an employee who is addicted to drugs and breaks the company rules, can enroll in a supervised drug rehabilitation program and claim ADA protection to avoid an employer’s discipline.  The EEOC Technical Assistance Manual on the ADA speaks directly to that and states:

“An applicant or employee who tests positive for an illegal drug cannot immediately enter a drug rehabilitation program and seek to avoid the possibility of discipline or termination by claiming that s/he now is in rehabilitation and is no longer using drugs illegally. A person who tests positive for the illegal use of drugs is not entitled to the protection that may be available to former users who have been or are in rehabilitation”(EEOC Technical Assistance Manual on the ADA § 8.3).

A question that employers often ask regarding former drug addict employees is whether accommodations have to be made.  One of the most important requirements under the ADA is the duty to provide reasonable accommodations to qualified individuals with disabilities.  Former drug addict employees who are no longer engaged in illegal drug use may be entitled to reasonable accommodation.  For example, they may require a modified work schedule to allow them to attend Narcotics Anonymous meetings or a leave of absence to attend treatment.

Check back next month to see our next blog post regarding the ADA coverage of Alcohol Users.

To learn more about ADA protection of Drug Users and what that means for employers, you may contact Dana Perminas at or by calling Dana at (312) 334-3474.

The Impact of the Employment Non-Discrimination Act on Current Employers

On November 7, 2013, the Senate passed the Employment Non-Discrimination Act (“ENDA”) which prohibits employers from discriminating against employees based on sexual orientation or gender identity.  Twenty-one states and the District of Columbia have laws prohibiting workplace discrimination based on sexual orientation.  Seventeen states and the District of Columbia ban discrimination based on gender identity.  Currently, there is no federal law that prohibits private employers from discriminating against employees based on sexual orientation or gender identity.  Title VII of the Civil Rights Act of 1964 is the primary federal law that prohibits workplace discrimination based on race, national origin, religion, gender, disability, age, citizenship status, and genetic information.  Membership in one of these protected classes is an essential element of an unlawful discrimination claim.  If ENDA becomes law, it will amend Title VII to add sexual orientation and gender identity to the list of protected characteristics that employers are prohibited from relying on in making certain employment decisions. If this legislation is passed, it would cover federal, state, and local governments, and private employers with at least 15 employees.  ENDA would prohibit employers from using sexual orientation or gender identity as a basis for any employment decision, including hiring, benefits, compensation, discipline, and firing.  ENDA would also prohibit employers from subjecting an employee to different standards or treatment based on their actual or perceived sexual orientation.  This legislation would protect employees who are going through or have gone through gender transition or reassignment, and would even protect those employees whose behavior doesn’t conform to stereotypes about gender.

There are exceptions and exemptions under ENDA.  ENDA does prohibit employers from enforcing reasonable dress code policies or grooming rules, provided, however, that employees who have already undergone gender transition, or are transitioning while employed, are permitted to conform to the standards of the gender to which the employee is transitioning.  This new legislation would not require employers to create new or additional facilities (such as changing rooms or rest rooms).  Additionally, disparate impact claims are not be permitted under ENDA.  Thus, an employer would not be required to justify a neutral practice that may have a statistically disparate impact on sexual orientation or gender identity.  Moreover, ENDA would not require employers to treat an unmarried couple in the same manner as it would treat a married couple for purposes of employment benefits.

The Equal Employment Opportunity Commission (“EEOC”) would be responsible for enforcing ENDA.  Employees would be required to file a charge of discrimination with the EEOC and obtain a right to sue letter as a prerequisite to filing a lawsuit against their employer.  Successful employees would be entitled to attorney’s fees as well as compensatory damages generally available under Title VII.

Before ENDA can become law, it still faces the House which is dominated by social conservatives.  House Speaker, John Boehner, R-Ohio, who opposes ENDA, is said to believe such legislation will increase frivolous litigation and could cost Americans jobs.

Although it could be years, if ever, to pass this legislation, employers should be aware that ENDA may drastically change current employer practices and will provide new causes of action for discrimination based on actual or perceived sexual orientation or gender identity.  Employers should reevaluate its policies and procedures and determine whether its current employment decisions create different standards or treatment for employees based on actual or perceived sexual orientation or gender identity.

For more information on this subject, contact Stephanie Strickler at

EEOC Ordered to Pay $4.7 M in Attorney Fees and Costs

In connection to our recent blog on the dismissal of EEOC’s claim against Freeman Co., we would like to bring to your attention another recent case where the EEOC’s claims were dismissed.  In EEOC v. CRST Van Expedited, Inc. (Case No. 07-cv-95), the Northern District of Iowa dismissed 65 of the EEOC’s 67 claims finding that the EEOC failed to investigate or attempt to conciliate the individual claims. Based on the EEOA which allows a prevailing defendant (employer) to recover attorneys’ fees for frivolous, unreasonable, or groundless claims, the Northern District of Iowa also awarded CRST Van Expedited, Inc. attorneys’ fees, costs, and expenses of $4,694.442.14. Importantly, the Northern District of Iowa rejected the EEOC’s argument that a defendant (employer) must prevail on every claim to be entitled to attorneys’ fees.  To read the decision, please follow this link:

Federal District Court Rules that Freeman Co. Did Not Discriminate by Using Criminal Background Checks to Screening Employment Applicants

A lawsuit by Equal Employment Opportunity Commission (EEOC) against a Dallas event-marketing company Freeman Co. was dismissed on August 9th.  EEOC claimed that Freeman Co. was discriminating against black applicants by using criminal-background checks or credit checks in hiring.  However, U.S. District Judge Roger W. Titus denied EEOC’s motion in his decision stating that EEOC did not provide any evidence of discrimination: “Something more, far more, than what is relied upon by the EEOC in this case must be utilized to justify a disparate impact claim, based upon criminal history and credit checks.” Moreover, Judge Titus ruled that by filing actions of this nature, EEOC has placed many employers in the situation where they need to make a choice between ignoring credit background and criminal history, and as a result exposing themselves to potential liability for their employees’ criminal and fraudulent acts, or “incurring wrath of the EEOC for having utilized information deemed fundamental by most employers”.

This lawsuit filed in 2009, was one of the first filed by EEOC in its effort to regulate the use of background checks.  Recently, EEOC filed two other suits of similar nature accusing Dollar General Corp. and a U.S. unit of BMW of discriminating against black applicants by using criminal histories checks.  Both of these cases are pending.

According to a 2012 survey by the Society for Human Resource Management, approximately 87% of employers use criminal background checks during hiring.  Interestingly enough, EEOC itself is among these employers based on Judge Titus’s opinion.

EEOC and civil-rights activist believe that background checks can be discriminatory since blacks have higher rates of being convicted in crimes than whites.  In 2012, EEOC issued guidance that urges employers to consider the crime and its relation to an applicant’s potential job as well as the amount of time that has passed since the conviction.

Employers should be pleased with Judge Titus’ decision, which applies a common sense approach to this important matter problem involving employment hiring decisions.  The EEOC, on the other hand, is no doubt disappointed.  Time will tell whether the decision will influence agency’s efforts on background checks.

See the following links for related information.

State Attorney Generals Oppose EEOC

Nine state attorney generals sent a letter to the Equal Employment Opportunity Commission (EEOC) last week opposing the EEOC’s criminal records Enforcement Guidance “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” issued in April, 2012, and the EEOC’s recent enforcement actions under the guidance against BMW Manufacturing and Dollar General.  On June 11, 2013, EEOC filed two separate lawsuits against Dollar General and BMW Manufacturing accusing them of improper use of criminal background checks for employment screening purposes (read more here). The state attorney generals urge the EEOC to rescind the Enforcement Guidance and dismiss the complaints against Dollar General and BMW Manufacturing regarding their use of criminal background checks in hiring.   In the letter, the state attorney generals claim:

  1. The EEOC’s Enforcement Guidance and enforcement actions are an unwarranted expansion of Title VII of the Civil Rights Act.
  2. The EEOC cannot expand the protections of Title VII under the pretext of preventing racial discrimination.  Only Congress has a right to create a new protected class for employment discrimination purposes.
  3. Many state and local laws impose criminal background restrictions on certain positions of employment, therefore the EEOC overreaches by preempting these laws.
  4. The EEOC’s enforcement actions are a “burden on businesses”.  Cost and time come as the consequences to employers since they would have to undertake more individualized assessments.  Moreover, individualized assessments may lead to more discrimination suits if rejected applicants claim these assessments were not conducted properly.

To read the letter from state attorney generals, click here.  A Press Release on the letter has also been issued by the West Virginia Attorney General’s Office.

Job Bias Claims are Harder to Prove Due to Recent Supreme Court Rulings

Recently, the U.S. Supreme Court raised the bar for employees seeking to prove workplace discrimination.  The justices debated regarding the definition of “supervisor” for purposes of Title VII liability in Vance v. Ball State University, and the burden of proof in Title VII retaliation claims in University of Texas Southern Medical Center v.  Nassar.

In Vance, the majority held that an employee is a supervisor when the employer has empowered that worker “to take tangible employment actions against the victim”, such as hiring, firing, reassignment, failure to promote or some other action causing the worker’s employment status to change significantly.  The justices rejected the definition advocated by the Equal Employment Opportunity Commission (EEOC) for the past 14 years, in which supervisor was defined to include someone who exercises meaningful direction over the work of an employee.

In University of Texas, the majority required employees to prove that the unlawful retaliation would have not taken place in the absence of the employer’s alleged wrongful action- “but for” causation.  The “but for” standard is a higher standard of proof than the one advocated by the EEOC.

Background Checks for Employment Fuel Race Complaints

A heated recent debate over whether the use of criminal background checks in the hiring process amounts to the discrimination against minorities has been fueled by recent lawsuits filed by the Equal Employment Opportunity Commission.  On June 11, 2013, two large employers, discount retailer Dollar General Corp. and a U.S. unit of German auto maker BMW AG, were accused by the EEOC of using improperly criminal background checks in hiring.  In complaints filed in federal courts in South Carolina and Illinois, the EEOC stated that both employers should have reviewed each applicant, but instead they generally barred potential employees based on the criminal background checks.  According to the commission, their hiring policies had the discriminating effect against African American applicants. These suits accentuate government scrutiny of widely used criminal and credit background checks for screening job applicants.  According to a 2010 survey by the Society of Human Resources Management, 92% of employers use criminal background checks for some or all openings.  Last year the EEOC issued guidelines to employers which do not prohibit the use of criminal checks, but encourage employers to consider the crime, how much time has passed since the conviction and the crime’s relation to a job opening at question.  These guidelines suggest that employers review each case individually and permit applicants to explain why they should be hired even if they had been convicted.

The civil-rights laws do not protect people convicted of crimes, but the EEOC has sued employers in cases where it has concluded that information regarding prior convictions has been used for racial or ethnic discrimination.  As a result, the use of background screenings is becoming regulated by increasing number of cities and states.  Employers who do not want people with violent histories to be in contact with their customers or people convicted of financial crimes handling money, are finding it difficult to comply with the EEOC’s guidelines.

In the BMW and Dollar General cases, the EEOC cited statistical differences in the hiring rates of African Americans and non African Americans after the companies ran criminal background checks. The EEOC characterized both cases as very serious systematic race discrimination cases.

The commission alleges that BMW hired a new contractor at its assembly plant in Spartanburg, SC in 2008 and required a new criminal background check for 645 employees of the prior contractor.  55% of these employees were African American, but out of 88 terminated employees 80% were African American.  Some of these dismissed employees had worked at the BMW plant for over 14 years.  BMW of North America stated that the company believes it has compiled with the law; that BMW has a strong culture of nondiscrimination which is shown by the company’s highly diverse workforce; and that it will defend itself against the commission’s allegations.

Regarding the Dollar General case, the EEOC claims that between January 2004 and April 2007 the company revoked conditional employment offers for 10% of its African American applicants and only for 7% of its non African American applicants.  Since over 344,000 applicants were involved, the commission stated that the numbers created an improper gross disparity.  The EEOC says in the suit that Dollar General uses a formula in hiring process that includes the crime and the time passed since crimes were committed, but that the policy is illegal since it is not sufficiently job-related and does not consider individual circumstances.  Dollar General has countered with the statement that its criminal background checks are created to encourage safe environment for its customers and employees, and to protect company’s assets in a nondiscriminatory manner.

The past efforts of the EEOC to regulate criminal checks have had mixed success.  In one case in 2011, the judge ordered the commission to pay PeopleMark, Inc., a Memphis-based staffing company, $750,000 in legal fees for pursuing a case when the EEOC should have known there was no discrimination.  In another case, Freedman Cos., a Maryland convention-services company, was allowed by the judge to question the commission’s own use of criminal background checks for hiring.

Based on EEOC’s lawsuits against BMW and Dollar General, employers must rethink the circumstances and manner in which they use criminal background checks in the hiring process.  Employers may no longer follow a blanket policy of rejecting all job applicants with criminal records.  Rather, to comply with the EEOC’s policy, each case must be reviewed on an individual basis, and before rejecting an applicant the employer must be able to demonstrate that the job they applied for required an employee without a particular type of background.

For more information on this subject contact Joe Messer at, or you may call Joe at (312) 334-3440.


Earlier this year, on April 25, 2012, the Equal Employment Opportunity Commission (“EEOC”) released new guidance on the consideration of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964.  In the continuing effort by the government to exercise more control over free enterprise, the use of an applicant’s criminal history in making employment decisions may, in some cases, violates the prohibition against employment discrimination under Title VII.  This most recent guidance issued by the EEOC is supposedly based upon longstanding court decisions and guidance documents issued by the EEOC over 20 years ago. The EEOC enforces Title VII, which prohibits employment discrimination based on race, color, religion, sex, or national origin. Interestingly enough, Title VII does not list having a criminal record as a protected basis.  Whether a covered employer’s reliance on a criminal record to deny employment violates Title VII depends on whether it is part of a claim of employment discrimination based on race, color, religion, sex, or national origin.

In a recent survey done, 92% of responding employers stated that they subjected all or some of their job candidates to criminal background checks. Employers have reported that their use of criminal background information is related to ongoing efforts to fight employee theft and fraud, as well as concerns about workplace violence and the potential liability for negligent hiring.  Employers must walk a fine line in making these determinations, which unfortunately, is not always easy.  Should it be the employer’s responsibility to take a chance on someone who has criminal record? Should it not be up to the employer to consider that as a factor in hiring?

The guidance discusses the considerations that should be given to arrest records and stated the following:

The fact of an arrest does not establish that criminal conduct has occurred, and an exclusion based on an arrest, in itself, is not job related and consistent with business necessity. However, an employer may make an employment decision based on the conduct underlying an arrest if the conduct makes the individual unfit for the position in question.

The difficulty therein lies with the employer to determine whether the conduct underlying the arrest will make that individual unfit for the position.  For example, one may argue that any violent behavior exhibited by a potential employee in the past will make any employer weary of bringing on that employee for the fear that this aspect of the applicant’s personality may once again rear its ugly head.  But can the employer deny the applicant the job opportunity for that reason alone? Or does the conduct in question have to be related in some way to the position they are being considered for? Should an employer not have the freedom to employ who they choose to employ?  If an employer has a choice between two similar individuals, but one of the individuals has an extensive arrest record (although the crimes he was arrested for may not be related to the job he is applying for), should it not be the employer’s choice to choose the individual they believe to be the safer, more reliable bet?  Or is there always the inference that the employer’s decision was based on stereotyping and race?

The guidance also discusses the difference when evaluating based upon a conviction record, since that record will, in most cases, serve as sufficient evidence that a person engaged in that particular conduct.  Surprisingly though, the guidance states that even in those circumstances, there may be reasons for an employer to not rely on the conviction record alone when making an employment decision.

Although this information is presented merely as “guidance”, the EEOC states that this is provided to “update and consolidate … all of its prior policy statements about Title VII and the use of criminal records in employment decisions.” Further, this guidance will be considered by the Commission as part of their “efforts to eliminate unlawful discrimination in employment screening, for hiring or retention, by entities covered by Title VII, including private employers as well as federal, state, and local governments.”

This post is in no way endorsing this latest “advice” provided by the EEOC, as it only evidences the continuing pattern of increased government interference with private business, but here are a few points suggested by the EEOC to comply:

  • Employers should steer clear of asking about convictions on job applications unless they are clearly related to the job the applicant is applying for.

  • When considering criminal histories, assess the nature and gravity of the offense(s), evaluate the time that has passed since the conviction and completion of sentence, and consider the nature of the job sought.

  • When the criminal history isn’t so clearly relevant and related to the position sought, even after conducting the above assessment, the EEOC recommends further individual assessment including evaluating and considering the facts and circumstances around the offense or conduct, the number of offenses the applicant has been arrested for or convicted or, the age of the applicant and dates of conviction, evidence that the applicant has successfully and without incident performed the same type of work, length, performance and consistency of work before and after offenses, rehabilitation efforts, references and whether the individual is bonded under a bonding program.

  • The EEOC provides the following list of best practices:

  • Eliminate policies or practices that exclude people from employment based on any criminal record.

  • Train managers, hiring officials, and decision makers about Title VII and its prohibition on employment discrimination.

  • Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.

  • Identify essential job requirements and the actual circumstances under which the jobs are performed.

  • Determine the specific offenses that may demonstrate unfitness for performing such jobs.

  • Identify the criminal offenses based on all available evidence.

  • Determine the duration of exclusions for criminal conduct based on all available evidence.

  • Include an individualized assessment.

  • Record the justification for the policy and procedures.

  • Note and keep a record of consultations and research considered in crafting the policy and procedures.

  • Train managers, hiring officials, and decision makers on how to implement the policy and procedures consistent with Title VII.

  • When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.

  • Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended.

Please contact Dana Perminas (312) 334-3474 with any questions regarding this issue.