Prior to taking office, President Trump vowed to “formulate a rule which says that for every one new regulation, two old regulations must be eliminated.” Politics aside, some observers saw irony in a regulation intended to reduce regulation. In any event, the pace and scope of regulatory change this year has been significant, and many of those changes have a direct impact on employers and employment practices. Here is a summary of key changes within the last few months and what they mean for businesses.

Salary floor increase – abandoned

The Department of Labor (DOL) will not defend the previous administration’s salary level increase for employees exempt from portions of the Fair Labor Standards Act, including overtime rules. In November 2016, a federal judge blocked implementation of the rule, which would have doubled the minimum salary level for exempt executive, administrative and professional employees. On June 30, the DOL filed a brief asking the Fifth Circuit Court of Appeals to uphold the agency’s legal authority to set a salary threshold, but it would not defend the validity of the increased salary threshold. Rather, the DOL indicated it would review the salary threshold and solicit further comment. Employers can reasonably expect that the minimum salary requirement for otherwise exempt employees will remain at its current level of $23,660 per year, or $455 a week for the foreseeable future.

Misclassification and joint employer guidance – withdrawn

On June 7, the DOL withdrew guidance on two matters relating to classification of employees as independent contractors and joint employer liability. In 2015, the DOL indicated it would use an “economic realities test” to crack down on employers that avoided employment laws by misclassifying employees as independent contractors. The withdrawal of the guidance signals that cracking down is no longer an administrative priority. Employers should tread cautiously, however, because many state laws relating to employee classification are more stringent than federal regulations and vigorously enforced.

With respect to joint employer liability, in 2016, the DOL appeared to broaden the circumstances under which two or more businesses could be considered joint employers of the same employee and therefore jointly liable for alleged labor violations committed by the other. For some employers, this guidance caused confusion as to when liability may attach in situations such as temporary employees or subcontractor labor violations. Employers can likely expect to see these laws applied consistently with pre-guidance interpretations as determined by courts in each jurisdiction.

Blacklisting rule – blocked

On March 27, President Trump signed a measure blocking a requirement that federal contractors must report labor violations when bidding on large projects. Under the rule, the disclosure of non-final and non-adjudicated violations were used as a basis to bar contractors from federal projects. The resolution signed by Trump went a step further and prevented the DOL from issuing a substantially similar rule in the future. This move will offer relief to contractors concerned about the prospect of losing potentially valuable contracts for disclosing or failing to disclose alleged labor violations.

OSHA electronic reporting – postponed

On June 28, the Occupational Safety and Health Administration (OSHA) published a proposed rule to delay compliance with a requirement for certain industries to report injuries electronically. The rule had originally been set to take effect on July 1; however, the government website for reporting injuries indicated that electronic forms were not available. OSHA now suggests that electronic forms will be available Aug. 1, but it seeks to delay any compliance requirements until Dec. 2, 2017, “to provide the new administration an opportunity to review the new electronic reporting requirements prior to their implementation and allow affected entities sufficient time to familiarize themselves with the electronic reporting system.” The delay would not impact other parts of the rule, such as a prohibition on retaliation against employees who report a work-related injury or illness. Employers who are subject to electronic reporting requirements should check for the electronic reporting portal after Aug. 1.

Transgender guidance – withdrawn

On Feb. 22, the U.S. Department of Education and U.S. Department of Justice formally withdrew previously issued guidance on transgender students’ rights. Many observers thought the previously issued guidance could have a downstream impact on employers as it potentially expanded how courts evaluated discrimination claims “on the basis of sex” to include gender identity discrimination claims. The withdrawal announcement asserted that previous guidance had been issued without sufficient review. This change does not have an impact on state law, which in many cases contains broad employment and education protections for individuals based on gender identity and sexual orientation.

Employers should continue to closely monitor changes at the federal level, and recognize that state laws can have a significant impact on whether and how existing practices or procedures should be updated. Best practices are to carefully consider the full legal landscape before making significant compliance changes and to consult with an employment attorney in the event of an unclear policy change or potential conflicting laws.

Anthony Kuchulis is an attorney with Barran Liebman LLP. He advises and represents employers in regard to a wide range of employment and labor law issues. Contact him at 503-276-2199 or akuchulis@barran.com.

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On Oct. 7, the Washington Post reported on a video depicting Donald Trump and Billy Bush having an extremely lewd conversation about women in 2005. Trump’s first public response to the video was that “this was locker-room banter – a private conversation that took place many years ago.”

The story sparked a national dialogue about gender issues and sexual assault. In the workplace, inappropriate conversations or comments of a sexual nature are often the basis for internal conflict and can result in exposure to civil liability. Below is an outline of how employers could respond if a situation similar to the Trump-Bush conversation arose in their workplaces.

For our hypothetical situation, let’s assume the comments at issue were made by a male supervisor, in a semi-private conversation, and were not recorded. Let’s further assume that the statements had two components: 1, the supervisor commented that he had tried to date a co-worker and been rebuffed; and 2, the supervisor rated women based on attractiveness. Obviously, this is not what was said in the Trump recording. If any evidence existed that a supervisor had boasted about kissing or sexually touching co-workers (or anyone) without consent, the employer would obviously have grounds to terminate the person’s employment immediately.

Upon learning of the statements, an employer should convene an investigation. One of the first steps is to select an appropriate person to conduct the investigation. The investigator should be perceived by others as fair, and should not be subordinate to the alleged wrongdoing. If an employer looks to select a non-employee to serve as the investigator, the individual must be a licensed private investigator or attorney.

The investigator will select the relevant witnesses, including the reporting party (“complainant”) and the supervisor that is alleged to have made the comments (“respondent”). The investigator should also question any employees referenced in the statement, or employees mentioned by the complainant or respondent. The employer should consider the need to implement safeguards to ensure a fair investigation, such as placing the respondent on leave during the investigation, especially if the alleged conduct is highly offensive or if there are reasonable concerns that employees will not speak freely if the respondent is still in the workplace.

The statements at issue here should be evaluated as potential gender discrimination, specifically sexual harassment. Sexual harassment takes two forms: hostile work environment and quid pro quo. The first statement at issue, regarding the respondent’s advances being rebuffed by a co-worker, raises concerns about hostile work environment and quid pro quo, but we will focus on the latter.

Quid pro quo (Latin: “this for that”) involves situations where a supervisor, manager or executive favors or disfavors an employee based on the employee’s response to sexual advances. Using our hypothetical situation, a statement from the supervisor about being rebuffed by a co-worker should raise alarm, especially if the employee reports to the supervisor in any capacity. All future conduct by the supervisor may be colored by the earlier rejection and that could constitute unlawful quid pro quo sexual harassment.

The future conduct by the supervisor directed at the employee need not be severe or immediate to be circumstantial evidence of quid pro quo discrimination. It could be as minor as not assigning the employee a desirable project, or as delayed as six years later suggesting the employee should be fired. For this reason many employers implement policies that forbid supervisors from dating employees, or require that the employer be informed of internal relationships so that it can ensure employees are not making workplace decisions based on a romantic or previous romantic relationship.

The second statement in our hypothetical situation, a supervisor rating women based on attractiveness, primarily raises concerns regarding hostile work environment sexual discrimination. Such discussions, especially at work, would certainly be inappropriate and unprofessional, but to create a hostile work environment the comments must be: 1, severe or pervasive; and 2, objectively offensive.

To illustrate, a severe and offensive comment would be a supervisor boasting about touching or kissing women without consent. That statement, if said once, would very likely cause distress and discomfort among other employees. On the other hand, a mildly offensive comment, if pervasive, can also create a hostile work environment. For example, a supervisor overheard talking about how attractive someone is, without saying more, likely would not create an objectively hostile work environment. But a pattern of statements objectifying women based on their attractiveness would almost certainly be offensive and disruptive.

Once an employer has thoroughly evaluated and investigated the situation, it must determine an appropriate response. The employer should consider the law, but also company policies, values and interpersonal dynamics. The employer’s response can range from counseling the supervisor about the issues, drafting a “last chance” agreement or proceeding with termination immediately.

Employers should use this opportunity to confirm that they have policies that forbid discrimination based on sex, or any other protected reason, and policies that clearly outline expectations and values. If an employer is concerned that the supervisor’s comments may reflect a larger issue with the company’s culture, it should consider employee and management trainings. Above all, stay vigilant; if this can become an issue in a race for the highest office in the land, it can become an issue in your office.

Anthony Kuchulis is an attorney with Barran Liebman LLP. He advises and represents employers in regard to a wide range of employment and labor law issues. Contact him at 503-276-2199 or akuchulis@barran.com.

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Dave’s Killer Bread recently made waves when plans were announced to sell the local organic bread company to Georgia-based Flower Foods for $275 million. Dave’s Killer Bread had been making waves for years, however, for a practice of evaluating job applicants without regard to their criminal background. Though not going so far, a new Oregon law (HB 3025) also hopes to provide some applicants with a better shot at employment by making it unlawful for an employer to deny an applicant an initial interview based on his or her criminal conviction.

Under the new law, an employer may not ask an applicant to disclose the existence of a criminal conviction prior to an initial interview. Therefore, traditional employment applications asking applicants to “check a box” if they have been convicted of a crime will be unlawful; hence the “ban-the-box” moniker. If an employer does not have a formal interview process before making a conditional offer of employment, then it cannot ask about an applicant’s criminal background before making the conditional offer.

There are several limited exceptions to the law, including for law enforcement, criminal justice system employers, and “nonemployee” volunteers. There is also an exception if another federal, state or local law requires consideration of the applicant’s criminal history.

Importantly, the law will not actually change what employers can consider when making a hiring decision; it only regulates the timing of when an employer can ask about and consider an applicant’s criminal background. It does not affect the bottom line of what an employer may screen for in evaluating applicants.

Based on the fact that it is mostly a process and not a policy issue, it may be easy to overlook this new rule, but that would be a mistake. The Bureau of Labor and Industries has been charged with enforcement and development of penalties for offending employers. Employers should use this as an opportunity to revisit their hiring processes and forms and ensure they are up to date before the law takes effect on Jan. 1, 2016.

At this point, it is unclear what constitutes an “initial interview” under the law; however, best practice would likely be to only ask for or check an applicant’s criminal background after there has been a meaningful discussion with the applicant and opportunity for him or her to explain any criminal convictions, potential “false hits” on a criminal background search (such as an individual with an identical name), and rehabilitative efforts undertaken since the conviction.

The ban-the-box legislation dovetails with recent Equal Employment Opportunity Commission guidance on blanket rules denying employment to applicants with a criminal background. The EEOC’s position was that denying employment to applicants convicted of a crime tends to have a disparate impact on certain minority populations. Similar to the new ban-the-box legislation, the EEOC guidance advocates for employers to perform individualized assessments of each applicant. In practical terms that means some form of discussion with an applicant about his or her criminal background before declining to extend an offer of employment, rather than adopt blanket policies prohibiting the hiring of applicants with a history of arrests or criminal convictions. Under both the new Oregon law and the EEOC guidance, an employer is free to both request and consider an applicant’s criminal convictions during and after that initial interview.

The intent of the ban-the-box regulation is to provide Oregonians with a criminal conviction a second chance. Indications from the 13 states that have passed similar laws are that these types of rules do help reduce the roughly 60 to 70 percent unemployment rate for ex-felons. According to some studies, more than 50 percent of released prisoners are arrested again within a year, and more than 75 percent are arrested again within three years. Higher employment rates may reduce the number of repeat offenders by offering them an easier path to assimilate with society.

In any event, employers should remain vigilant when hiring, including carefully considering the potential risk and liability of hiring someone with a criminal conviction, and whether the conviction is relevant to the position. For example, someone who served time for check fraud might not be a good bank employee, and day care providers and schools can maintain absolute prohibitions on hiring anyone convicted of a crime against children. On the other hand, someone with an old misdemeanor DUII conviction and a compelling story about how that experience changed his or her behavior may not be a risky hire for a construction contractor.

Employers should review their applications and hiring practices now to ensure that they are in compliance with the new law so as not to be caught off guard come Jan. 1.

Anthony Kuchulis is an attorney with Barran Liebman LLP. He advises and represents employers in regard to a wide range of employment and labor law issues. Contact him at 503-276-2199 or akuchulis@barran.com.

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