What We Know About Who May Likely Be the First Latino Member of Trump’s Cabinet

Alexander Acosta is a Florida native and the son of Cuban immigrants, who has a legal background with many years of government service. He is well-credentialed, with an undergraduate degree in Economics as well as a Law degree from Harvard University. He has experience in the public sector, having served in the Department of Justice, Civil Rights division under the George W. Bush administration, where he defended the rights of Muslim Americans.

While he was U.S. attorney for the Southern District of Florida, his office’s 284 lawyers, from Key West to Vero Beach, convicted bank chairmen, corporate executives and the torturer son of Liberia’s ex-president. They dismantled gangs and felled dozens of companies for fraudulent mortgage lending and Medicare scams. Some other noteworthy cases that took place during his tenure were that of the Liberty City Seven, a cult whose members were charged with terrorism; Jack Abramoff, a lobbyist at the center of the 2005 Indian lobbying scandal; Chuckie Taylor, son of the former president of Liberia who was convicted of carrying out human rights violations including torture; and Miguel and Gilberto Rodríguez Orejuela, founders of a drug cartel that had been importing billions of dollars of cocaine into Florida.

While serving on the National Labor Relations Board from December 2002 to August of 2003 (he was appointed to that position by George W. Bush), Mr. Acosta offered over 125 opinions. There isn’t necessarily a lot known about his view of labor unions, and he did not author any particularly controversial decisions.  Obama’s Labor Department pushed through a number of policies, including Executive Orders that used the federal government’s contracting power to elevate wages and increase labor protections for federal contract workers, rules that doubled the salary threshold that qualified workers for overtime pay, and required retirement advisers to act in their clients best interests. See Article “The DOL Fiduciary Rule: Are Commission Structures for Retirement Investment Advisers a Thing of the Past?” Republicans are hoping that Mr. Acosta will roll back Obama’s labor legacy.  Despite the unknowns, AFL-CIO President Richard Trumka responded to the nomination with a conciliatory statement.  “Unlike Andy Puzder, Alexander Acosta’s nomination deserves serious consideration,” Trumka said. “In one day, we’ve gone from a fast-food CEO who routinely violates labor law to a public servant with experience enforcing it.

More telling may be the insight from those who know him best. “He’s intense, hardworking, but I think in contrast to Puzder, he’s going to get things done more quietly,” said Tammy McCutcheon, who served as administrator of the Wage and Hour Division of the Labor Department during the Bush administration. “He will be quietly efficient. I don’t think you’ll see a lot of difference in his policy positions from Puzder.”

Mr. Acosta currently is dean of Florida International University College of Law and chairman of U.S. Century Bank.

If there’s something weird and it don’t look good, who you gonna call? Mythbusters!

Courtesy of Acas, here are the top ten myths to be “busted” by the Government’s promised campaign to make the Gender Pay Gap Regulations look less over-engineered than they really are together with some italicised comments of our own.

MYTH: We did an equal pay audit a while ago so we’re fine

FACT: Equal Pay deals with comparing one job with another – the gender pay gap is about the difference in gender pay across a whole organisation.

True, but having the audit results under your belt means that even if there is a reportable gap for other reasons, its significance in legal terms will be reduced by reference to those results.

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Welcome New US Labor & Employment Team Members

We are excited to welcome two lawyers to the Squire Patton Boggs US Labor & Employment practice group – Jeffrey Schagren and Joe D’Andrea. Jeff and Joe bring broad labor and employment experience to the firm and add substantial expertise to our counseling and advocacy services.

jeff Jeff joins us as Of Counsel in our Dallas, Texas office, and is the leader of the firm’s North America Hospitality group. Jeff has significant labor and employment capabilities, specifically with traditional labor matters and collective bargaining. In addition, he is has experience managing employment due diligence for corporate merger and acquisition transactions and ADA public accommodations. Jeff has more than 27 years of experience in various areas of the law and was most recently general counsel and regional human resources leader at Accor Hotel Services, where he led all legal, risk management, and human resources matters for the North America, Central America and Caribbean Division. He also previously held executive positions in the hospitality and housing sectors at LQ Management LLC (La Quinta Inns and Suites) and in the retail sector in executive positions with Hechinger/Home Quarters/Builders Square.

Jeff commented, “It’s an exciting time to join Squire Patton Boggs, as the firm continues to grow its Hospitality sector team to the further serve the changing needs of clients. I look forward to complementing the firm’s talented team with my knowledge of and experience in the industry.”

joe Joe joins us as an Associate in our Columbus, Ohio office. His practice focuses on advising and defending employers in all aspects of labor and employment matters, including claims arising under Title VII, ADA, ADEA, FLSA, FMLA and the Equal Pay Act. He advises clients regarding compliance with federal, state and local employment laws and regulations, and he has experience defending employers from claims in state and federal courts, administrative agencies and arbitrations. Prior to joining us, Joe was an Assistant Attorney General for the State of Ohio.

On why he chose our firm, Joe said “I joined Squire Patton Boggs because I wanted the challenge of practicing law in a variety of jurisdictions and because I liked the team atmosphere in the Labor and & Employment practice group.”

Jeff can be reached by phone at (214) 758-1521 and via email at jeffrey.schagren@squirepb.com.  Joe can be reached by phone at (614) 365-2786 or by email at joseph.dandrea@squirepb.com.

A Valentine’s Day treat – our take on employee engagement

Birmingham Engage for Success will be partnering with Squire Patton Boggs, the CIPD and the Birmingham Chamber of Commerce to host an event this Friday 17 February 2017 on “Increasing Productivity”. This event is specifically designed for board members to share and learn how to close the productivity gap.  Ramez Moussa, a Partner in our Birmingham Labour & Employment team, will be speaking on the employment law consequences of disengaged employees.  For more information and to book your place at this event, please visit the Eventbrite website.

To mark this event, here is a useful look at key engagement considerations by Fiona Anderson of Change Consultancy, valuingYOU, and founder of the Birmingham Engage for Success network.

Some sources say that every disengaged employee costs you over 1/3 of his/her salary.

You’ll recognise them. These are the people who:

  • deliver lower quality outputs or a poor customer experience
  • take higher levels of sickness absence
  • are resistant to change and often late for work/meetings
  • create a toxic atmosphere for their fellow co-workers; and
  • blame others for their own inadequacies

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The DOL Fiduciary Rule: Are Commission Structures for Retirement Investment Advisers a Thing of the Past?

On Wednesday, February 9, a Texas federal judge upheld the U.S. Department of Labor’s (DOL) controversial fiduciary rule for retirement investment advisers — just hours after the agency had asked to stay the case in light of President Donald Trump’s directive to it on February 3rd to conduct an “economic and legal analysis” of the rule’s potential impact, and possibly rescind the proposed rule.  In upholding the rule, Judge Barbara M.G. Lynn found that the DOL did not exceed its authority and properly considered the costs and benefits when promulgating its new rule.

Barring further action, the DOL Fiduciary Rule is scheduled to be phased in over the course of 2017.  It revises the definition of “investment advice fiduciary” under the Employee Retirement Income Security Act of 1974 (ERISA), and requires financial professionals who advise retirement account holders to act in the best interests of their clients when recommending investment products, a higher standard than the current approach of requiring advisers to promote products that are merely suitable to an investor.  This regulation will automatically elevate all financial professionals who work with retirement plans or provide retirement planning advice to the level of a fiduciary, bound legally and ethically to meet the standards of that status. Although the new rule is likely to have at least some impact on all financial advisers, it is expected that those who work on commission, such as investment brokers and insurance agents, will be impacted the most.  Fiduciary responsibility is a much higher level of accountability than the suitability standard previously required of financial salespersons, such as brokers, planners and insurance agents, who work with retirement plans and accounts. “Suitability” meant that so long as an investment recommendation met a client’s defined need and objective, it was deemed appropriate. Now, financial professionals are legally obligated to put their client’s best interests first, rather than simply finding “suitable” investments. The new rule could therefore eliminate, or substantial curtail, many commission structures that apply within the industry.

Advisers who wish to continue working on commission will be required to provide clients with a disclosure agreement, called a Best Interest Contract Exemption (BICE), in circumstances where a conflict of interest could exist (such as the adviser receiving a higher commission or special bonus for selling a certain product).  This is to guarantee that the adviser is working unconditionally in the best interest of the client.  All compensation that is paid to the fiduciary must be clearly spelled out as well.

What’s covered:

  • Defined-contribution plans: four types of 401(k) plans, 403(b) plans, employee stock ownership plans, Simplified Employee Pension (SEP) plans and savings incentive match plans (simple IRA)
  • Defined-benefit plans: pension plans or those that promises a certain payment to the participant as defined by the plan document
  • Individual Retirement Accounts (IRAs)

What isn’t covered:

  • If a customer calls a financial advisor and requests a specific product or investment, that does not constitute advice.
  • Financial advisors can provide education to clients, such as general investment advice.
  • Accounts funded with “after tax” dollars not considered retirement plans.

The word on the street is that the Trump administration will need to build a robust administrative record if it wants to convince the public and courts a full-scale repeal of the new fiduciary rule for retirement account advisers is justified and not merely a political about-face.  Although the DOL appears certain to delay the rule’s initial implementation date, currently set for April 10, in light of the review the President requested last week, experts suggest that the agency will have a tough time justifying changes after now three federal judges independently have found its original analysis robust enough to withstand scrutiny.

A year late but worth the wait? – Tribunal fee impact reviewed

After the gestation period of an elephant, the Government Review of the impact of the fees for Employment Tribunal cases finally emerged squalling into the daylight earlier this month. Weighing in at a healthy 100 pages and with a foreword by proud father Justice Minister Sir Oliver Heald, the Review takes a detailed look at the effect which Tribunal fees have had upon claimants and the number and nature of Tribunal claims.  It has more statistics than Wisden’s and is not a particularly riveting read, in all honesty, but the patient peruser can pan a couple of nuggets out of it:

  • By some trick of mathematics which is not explained, the Government claims that financial receipts from the fee regime (approximately £8-9million per year) have met its original expectations but that the fall in claim numbers was sharply greater than anticipated. So many fewer claims = the same fees, somehow.
  • As everyone told the Government at the time, the fees regime has had no impact at all on the bringing of cases which are weak, speculative or malicious – indeed, success rates for claimants appear to have gone down since 2013. It is denied that this was a “formal” objective of the Government at the time, though it was unquestionably a hoped-for by-product.
  • The Report notes with pleasure the increased use of Acas following the introduction of fees, glossing over the twin facts that (i) going to Acas is now mandatory as a prelude to a claim, and (ii) despite the implicit suggestion of joined-up thinking in the Report, compulsory early conciliation and the introduction of fees were actually two completely separate initiatives, related only in their desire to reduce the burden of the Tribunal system on the Treasury.
  • Despite the claims of certain mothers’ rights bodies, there is no evidence that the introduction of fees acted to reduce maternity discrimination claims to any greater extent than the other discrimination jurisdictions, so no specific provision is to be made for them.
  • It is accepted that the introduction of fees seems to have prejudiced processors of some protected characteristics disproportionately, but the Government says in the Review that it considers any indirectly discriminatory effect to be amply justified by the fees’ achievement of its “legitimate aims” – passing part of the costs of the Tribunal system to its users, encouraging ADR and not deterring access to justice.
  • On that score, some interesting semantics in the Report – in particular, the repeated acceptance that fees deter the bringing of claims (and obviously to a much greater extent that the Government anticipated) but no acceptance at all that they prevent Where deter crosses over into prevent is not clear, but the Government declines to admit that anyone has been unable to bring a claim because they could genuinely not afford to do so.  Where would-be Tribunal claimants have cited the fees as a reason for not going ahead, the Review indicates that this is either because they were not aware of or did not understand the old fee remission scheme or (this probably sounds better at Tory HQ than it looks in print) as a result of their choosing to spend their money on “non-essentials” instead.
  • Deplorably, the sums deemed to be at the disposal of the claimant for fee remission purposes still include his redundancy and notice entitlements, so dramatically limiting the number of possible fee remission claims. The Review says that it is right that employees should “use their savings and capital“, paying no heed to the fact that much of that capital (notice pay) is simply an advanced payment of income they will no longer have. The mere fact of your being dismissed can therefore disqualify you from the help with fees necessary to enable you to contest it.

So all in all, the fees have been a riotous success, apparently. Without prejudice to that, obviously, remedial measures intended as a result of the Review include the removal of fees for claims out of the Redundancy Fund and an increase in the qualifying income threshold of about £165 per month gross.  This still means that if you are doing a full week at or above the national minimum wage, hard luck.

Ninth Circuit Court of Appeals Affirms TRO – Stay of Travel Ban Executive Order Remains in Place

On February 9, 2017 a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit unanimously upheld a Federal District Court judge’s decision (TRO) to temporarily block the President’s Executive Order (EO) entitled Protecting the Nation from Foreign Terrorist Entry Into the United States.

Our previous update regarding the TRO, the current state of the EO and the respective travel ban can be found here.  Essentially, the travel ban on immigrants and nonimmigrants from the 7 designated countries (Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen) and restrictions to the refugee program remain suspended.

The Ninth Circuit’s decision spanned 29 pages and focused on the procedural aspects of the litigation. Specifically, whether the legal standards have been met to uphold the TRO and temporarily block the government from enforcing the EO while the broader legal questions are more fully considered by the lower court. The Ninth Circuit found that the plaintiffs (States of Washington and Minnesota) had standing to sue and were likely to win on the claim that the EO deprives persons “of life, liberty, or property, without due process of law.” The decision referenced prior Supreme Court cases and touched on Constitutional issues that will surely arise in later hearings. For example, “The procedural protections provided by the Fifth Amendment’s Due Process Clause are not limited to citizens. Rather, they “appl[y] to all ‘persons’ within the United States, including aliens,” regardless of “whether their presence here is lawful, unlawful, temporary, or permanent.” It continued, “[t]hese rights also apply to certain aliens attempting to reenter the United States after travelling abroad.”

What happens next? The government can ask the Supreme Court to review the Ninth Circuit decision or, before that, request a larger, en banc panel of the Ninth Circuit consider the case. The Ninth Circuit or the Supreme Court could grant or deny such a request.

In parallel, the trial court has set a schedule to hear the plaintiffs’ request for a preliminary injunction which, if granted, would likely have the same impact as the TRO and remain in place until the case is concluded. That could be several months.

We’ll keep you posted.

Extended Comment Period Gives Employers More Time to Weigh In On EEOC’s Proposed Guidelines On Unlawful Harassment

The U.S. Equal Employment Opportunity Commission (EEOC) has provided additional time for public comment on its recently-issued proposed guidelines on unlawful harassment.  The 75-page draft, which issued on January 9, 2017, expands upon existing interpretations of many aspects of workplace harassment, including prohibited bases for harassment, conduct constituting illegal harassment, the role of social media, and the legal standards for harassment claims.  On a practical level, most notable to employers may be the EEOC’s proposal for enhanced requirements in employer EEO training.

The proposed guidelines come after an EEOC report indicated that incidents and claims of harassment at work are on the rise.  The guidelines, once finalized, will not have the force of law, but they will influence the EEOC’s analysis of harassment charges and prosecution of harassment litigation.  EEOC guidelines are also often cited to courts as persuasive interpretation of Title VII and other anti-discrimination laws enforced by the EEOC.

The EEOC has extended the period for public comment on the proposed guidelines until March 21, 2017.  Employers wishing to remark on the draft guidelines can do so electronically or by mail to: Public Input, EEOC, Executive Officer, 131 M St. NE, Washington D.C. 20507.

Missouri Becomes 28th State to Pass Right-to-Work Law    

On February 6, Missouri Governor Eric Greitens signed into law SB 19, making Missouri the 28th state to adopt right-to-work legislation.  The law goes into effect on August 28, 2017, and provides that no employee may be required as a condition of employment or continued employment to become a member of a union or to pay any dues or other fees to a union.  (Note that agreements entered into prior to August 28 are grandfathered and not subject to the law).  In passing this law, Missouri joins a number of Midwest states to adopt right-to-work laws since 2012, including Indiana, Michigan, and Wisconsin.

New Hampshire currently has a bill pending that would make it the 29th right-to-work state, and on February 1, Rep. Steve King (R-IA) introduced in Congress a national right-to-work bill.  Although efforts to ban compulsory union membership and forced union dues on a nationwide basis have been pursued by Congressional lawmakers in the past, those bills never passed.  However, with Republicans now constituting a majority in Congress and a Republican President who has indicated that he supports a nationwide right-to-work law, the prospect of passage now is much higher.

Five week summer break not a religious observance, surprisingly

Over a month off in Sardinia in August each year with your family sounds the way to go, doesn’t it? Something you could really look forward to, but would probably not really expect your employer to grant you as a matter of right, I suspect.

One Mr Gareddu disagreed. He claimed that those five weeks were required for the observances of his Sardinian Catholicism, and therefore that the refusal of his employer, London Underground Limited, to grant them amounted to indirect religious discrimination.  Specifically, he said, there were numerous religious festivals taking place in Sardinia over that period which he (a) had to; and (b) always did, attend.  Extracting details of those festivals from Mr Gareddu was not as easy as one might have hoped for someone whose case depended on them, but eventually he produced a list of 17 events over that window which he said explained why religious observance required him to be in Sardinia with his family for an extended period at the height of the holiday season.

The Employment Tribunal manfully supressed the flaring scepticism it must have felt and reminded itself very firmly that it is not its job to determine what is and is not a necessary manifestation of a particular faith. Once it found that a particular view on the part of the employee as to what acts his religion required was genuine, the only question was whether the employer was justified in stopping them.  The obvious safeguard is that the barmier the observance contended for (this is para-phrased somewhat, just to be clear), the more easily the employer can establish justification.

Almost all religious accommodation cases which fail do so on the justification question, but here the Employment Tribunal’s decision did not deal with it at all. The Tribunal preferred to look first at whether Mr Gareddu reasonably believed that taking those five weeks was a commandment binding upon him.  Very conscious of the risk of superimposing its views on his, the Tribunal trod carefully through his evidence and noted in particular that Mr Gareddu had ultimately admitted that he didn’t in fact go to all 17 festivals every year, and indeed had not been to any at all since 2013.  He said that he had broken his leg in Sardinia twice in successive years since then, hence not going to any actual festivals, and that which of the festivals he actually went to was in fact decided in consultation with his family in part to suit their convenience, and not as a matter of Catholic obligation.

That allowed the Tribunal to reach the conclusion it so clearly wanted, i.e. that while you could certainly make attendance at a particular festival into a religious manifestation (hence viable applications for time off for Eid, Yom Kippur or Ascension Day, etc.), you could not say the same of a shifting list of patchily-attended events partially determined by your family. Therefore it could not be said that the five weeks’ absence claimed by Mr Gareddu as necessary to his belief, really was.  As a result, the Tribunal found that he did not genuinely believe it to be a religious requirement to take that time off and so his claim failed without getting anywhere near the justification point.  The EAT could fault none of it on appeal.

Lessons for employers

  • This is a sensible decision in its outcome but perhaps understates the risk to the employer of visibly doubting or challenging the good faith of an employee’s claimed religious belief. Unless you are on very solid ground indeed, any expression of scepticism should be as limited as possible or it could quickly stray into mockery and harassment. As a rule, justification will be the safer defence.
  • However, there is nothing to be lost from neutrally-phrased questions to the employee as to the specifics of what he says his observance requires. It is after all those specifics which the employer is being asked to accommodate. Mr Gareddu’s evasiveness in relation to the precise list of festivals he had mind counted heavily in the Employment Tribunal’s conclusion that it was not put forward in good faith.
  • Perhaps foolishly, Mr Gareddu did not suggest that if five weeks off were not ok, there was a minimum core of festivals he had to attend which would have required a shorter period, being easier for LUL to grant (and no doubt much less irritating to his colleagues into the bargain). However, if your employee proposes a particular accommodation which you cannot meet, it may still benefit you to be seen to explore with him whether there is some compromise measure which you could. If he accepts then you avoid any claim, and if he doesn’t, then you have greatly reinforced your own justification argument.