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Unemployment Claims for Week Ending June 17, 2017

For the week ending June 17, 2017, the advance figure for seasonally adjusted initial claims for unemployment benefits was 241,000, an increase of 3,000 from the previous week’s adjusted figure. The 4-week moving average was 244,750, an increase of 1,500 from the previous week.

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US Secretary of Labor Withdraws Joint Employment, Independent Contractor Informal Guidance

ON June 7, 2017,U.S. Secretary of Labor Alexander Acosta today announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors.  Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.

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Court Halts Overtime Rules With Last-Minute Preliminary Injunction

In a preliminary injunction ruling on November 22, a federal judge in Texas blocked the U.S. Department of Labor’s (USDOL’s) new overtime rule from taking effect on December 1, 2016, handing an eleventh-hour victory to employers across the country. Agreeing with arguments posed by concerned states and business groups, the judge issued a preliminary injunction preventing the rules from being implemented on a nationwide basis.  The two changes with the broadest impact in the effected rule: the minimum salary threshold an employer must pay in order to characterize an employee as non-exempt would have increased from $455 to $913 per week; and this amount would be “updated” every three years beginning on January 1, 2020.

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Ruling on Salary Threshold Regulation Expected November 22

A Labor Department rule significant increasing the salary threshold for “white collar” exemptions under the Fair Labor Standards Act was the subject of a hearing held on November 16 in Nevada v. U.S. Dept. of Labor, E.D. Tex., No. 4:16-cv-00731, minute entry 11/16/16. Judge Amos Mazzant said Nov. 16 he will take under advisement a motion for preliminary injunction filed by 21 states, and predicted a ruling on Nov. 22, according to minute entry proceedings. If the motion is denied, another hearing will take place Nov. 28 on the business groups’ request for summary judgment. Mazzant said he’d decide on that before the regulation’s Dec. 1 effective date. If the judge declines to freeze the rule, on Dec. 1 the salary threshold below which workers qualify for overtime pay will double to $47,476. Some 4 million workers are expected to become newly eligible for time-and-a-half pay when working more than 40 hours in a week.
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GEORGIA POWER TO PAY OVER $1.5 MILLION TO SETTLE DISABILITY DISCRIMINATION SUIT

Georgia Power Company, an electric utility company headquartered in Atlanta, will pay $1,586,500 to settle a class disability discrimination lawsuit brought by the U.S. Equal Employment Oppor­tunity Commission (EEOC).  EEOC filed suit in 2013, charging that Georgia Power violated federal law by refusing to hire applicants and firing employees based on their disabilities or perceived disabilities, EEOC v. Georgia Power Company, Civil Action No. 1:13-cv-03225-AT, in U.S. District Court for the Northern District of Georgia, Atlanta Division.  The consent decree settling the suit was filed with the court on November 15, 2016. In addition to monetary relief , Georgia Power has agreed to change both its seizure policy and its drug and alcohol policy to ensure compliance with the ADA. Georgia Power also agreed to provide equal employment oppor­tunity training to its employees and to post anti-discrimination notices at its facilities. In addition, the three-year decree requires Georgia Power to be subject to reporting and monitoring requirements.

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FEDERAL COURT IN PENNSYLVANIA RULES CIVIL RIGHTS ACT OF 1964 PROHIBITS SEXUAL ORIENTATION DISCRIMINATION

            In a decision issued on Nov. 4 the District Court for the Western District of Pennsylvania denied Scott Medical Health Center’s motion to dismiss U.S. EEOC v. Scott Medical Health Center (Case 2:16-cv-00225-CB), a case brought by the Equal Employment Opportunity Commission alleging gender discrimination based on sexual orientation.  In its ruling, the court found that sexual orientation discrimination is a type of discrimination “because of sex,” which is barred by Title VII of the Civil Rights Act of 1964. Applying decisions of the U.S. Supreme Court’s finding that Title VII’s ban on sex discrimination includes adverse treatment of workers based on “sex stereotypes,” i.e. pre-conceived ideas of how a man or a woman should act or think, the federal court stated, “There is no more obvious form of sex stereo­typing than making a determination that a person should conform to heterosexuality.”

The federal court then concluded, “That someone can be subjected to a barrage of insults, humili­ation, hostility and/or changes to the terms and conditions of their employment, based upon nothing more than the aggressor’s view of what it means to be a man or a woman, is exactly the evil Title VII was designed to eradicate.” While the federal court made a legal ruling in the case, to date there has been no trial or factual finding whether discrimination occurred.

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States Seek Emergency Injunction to Stop Overtime Regulations

In a lawsuit filed by 21 Plaintiff states, including Georgia, the states seek an emergency injunction  asking a federal judge to stop the Labor Department of Labor’s overtime rule before it takes effect December 1, 2016.  (Nevada v. U.S. Dept. of Labor, E.D. Tex., No. 4:16-cv-00731, motion filed 10/13/16).
The 21 states argue that the U.S. District Court for the Eastern District of Texas should issue a nationwide injunction to prevent implementation of the rule, which will expand overtime eligibility to an estimated 4.2 million workers.  The regulation, set to become effective on December 1, doubles the annual salary threshold for employees to be exempt from the overtime rules of the Fair Labor Standards Act from $23,660 to $47,476.
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Dreadlocks Not Immutable Racial Characteristic Supporting Race Bias Claim

The Eleventh Circuit Court of Appeals rejected the Equal Employment Opportunity Commission’s allegations that a black job seeker was denied work based on race because she refused to cut off her dreadlocks. (EEOC v. Catastrophe Mgmt. Sols., 2016 BL 301245, 11th Cir., No. 14-13482, 9/15/16). The court rejected the EEOC’s argument that the modern definition of “race” includes cultural characteristics and “individual expression” associated with race, such as dreadlocks.
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Anticipated Overtime Lawsuit Will Target Automatic Salary Threshold Increases

Business groups will likely challenge the Labor Department’s recently published overtime rule in court and will likely focus on the part of of the regulation that would automatically adjust the salary threshold upward on a regular basis. The new rule is expected to make some 4 million workers newly eligible for overtime pay.  The U.S. Chamber of Commerce and other opponents of the new rule (RIN:1235-AA11) say many businesses simply can’t afford to cover increased payroll costs and will instead trim jobs. The Group will ask a judge to issue an injunction blocking the rule before it goes into effect on December 1, 2016.
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Emory University Sued Over Retirement Plan Fees

Emory University is the most recent target of an ERISA lawsuit challenging the fees associated with its retirement plan (Henderson v. Emory Univ., N.D. Ga., No. 1:16-cv-02920, complaint filed 8/11/16). The lawsuits, bring class action claims against eight different schools, including Yale, NYU, Duke and Johns Hopkins. Each school is accused of including too many investment options in its retirement plan and charging participants excessive fees for record keeping and administrative services.
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USDOL Announces Increased Employer Penalties

On June 30, 2016, the U.S. Department of Labor (USDOL) announced a series of civil penalty increases that will impact the nation’s employers.  The USDOL announced that the vast majority of penalties associated with wage and hour, safety, and benefits compliance matters will soon increase, as will certain penalties associated with immigration matters.

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