Technology Employment Law

Technology Employment Law

Legal Insight for Technology, Media, and Telecommunications Employers

Regional Directors Report Data on The NLRB’s Amended Election Rules After One Month – Court Challenges Continue

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My colleagues Steven M. Swirsky and Evan J. Spelfogel published a Management Memo blog post that will be of interest to many of our readers: “Regional Directors Report Data on The NLRB’s Amended Election Rules After One Month – Court Challenges Continue.”

Following is an excerpt:

May 14th marked the one-month anniversary of the effective date of the NLRB’s Amended Representation Election Rules (“amended rules”).  That day, the Regional Directors for NLRB Regions 2 (New York, NY), 22 (Newark, NJ), and 29 (Brooklyn, NY) discussed their offices’ experiences processing representation petitions filed since the amended rules took effect on April 14th.

With respect to the questions of how the amended rules are actually affecting representation petitions and elections, while one month may not be representative, the data to date does offer some insights that will be of interest to employers, unions, and practitioners.  Perhaps the most interesting fact is that in these three Regional Offices, there were NO hearings held on petitions filed since the amended rules took effect.  In every case, the parties entered into a stipulated election agreement or a consent agreement, or the union withdrew its petition. Out of a total of 32 petitions filed in these regions during the one-month period, eight went to an election and 24 were withdrawn without an election.

Read the full blog post here.

Accepting Social Responsibility Not Legal Liability

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We recently blogged about recent gender discrimination lawsuits filed against technology industry employers. Following in the wake of these lawsuits have been news stories regarding the lack of diversity in the technology industry. The scale of the statistical disparity, (for example, 90% of Twitter’s technical employees are male), creates major litigation risks for companies seeking to remedy this disparity. Technology companies eager to accept social responsibility for correcting these discrepancies must be careful not to inadvertently invite legal liability for them as well.

Although there seems to be a consensus that lack of diversity is a problem in the technology industry that should be addressed, there is a great deal of disagreement over how to address the problem. Some groups, such as Jesse Jackson Sr.’s Rainbow PUSH Coalition have focused on publicizing employee population statistics in an effort to bring the issue out in the open. However, employers are still experimenting with possible strategies to address the problem.

Class action lawsuits designed to punish employers with large monetary penalties without providing solutions to the disparities threaten this process of experimentation. In a recently filed class action lawsuit against Twitter,[1] a former employee is seeking to represent a class of all current and former female employees who were allegedly denied promotions as a result of gender discrimination. Rather than pointing to a particular discriminatory act or individual, the Complaint cites the employer’s use of “subjective requirements” and “unconscious prejudices and gender-based stereotypes” as the reason why few female employees receive promotions.

A distressing feature of the Complaint is how it incorporates the employer’s attempts to address diversity issues against the employer. It uses the employer’s “internal diversity studies, focusing on barriers to women’s advancement… bias mitigation training” and treatment of gender disparity “as a company-wide issue by partnering with many organizations to continue improving its diversity standing and move the needle” as evidence that discrimination should be adjudicated on a class wide basis. The Complaint also uses employee population statistics published at the urging of civil rights groups as evidence of discriminatory bias.

The Complaint appears to be laying the groundwork for a legal theory that has thus far not been successful. The theory, as discussed in the complaint and in early cases, looks to social scientific research regarding the phenomenon of “implicit bias” meaning “a person’s automatic preference for one [classification] over another.”[2] Courts have been presented with evidence in early cases concerning experiments claiming to support that conclusion that as many as 70% of Americans display an implicit bias in favor of whites over blacks.[3] “Implicit” bias claims provide plaintiff’s lawyers with a mechanism to attribute to discrimination statistical disparities among protected classes in an employee population. Combined with evidence of wide gender and racial disparities this has the potential for massive damages in class action lawsuits.

One of the best examples of how seeking to improve diversity can have unintended legal consequences is the Implicit Association Test (“IAT”). The IAT is designed to measure implicit bias by measuring the time it takes to associate good and bad traits with a particular classification. The most common iteration of the test shows that a substantial portion of test-takers implicitly associate faces of Caucasians with good things, and faces of African Americans with bad things. Many implicit bias training procedures involve having participants take the IAT.[4]

Thus far, plaintiffs have had difficulty having results of the IAT admitted as evidence in litigation. Generally, plaintiffs have  tried to argue: (1) the IAT demonstrates that most people exhibit implicit bias; (2) decision makers are statistically likely to exhibit implicit bias so decision makers at defendant exhibit implicit bias; (3) people who exhibit implicit bias will unconsciously discriminate based upon that bias; ergo (4) statistical disparities based on race or gender within defendant’s employee population are the result of implicit bias. Although there are many parts of this argument susceptible to attack, thus far the most successful defense has been to attack point (2) by arguing that even if implicit bias is rampant in the general population, there is no evidence that a particular decision maker exhibits implicit bias.[5] Plaintiffs can negate this argument by entering individual decision maker’s IAT results into evidence.

The best way to stop a decision maker’s IAT results from being admitted as evidence is for that decision maker not to take the IAT. Documents memorializing IAT results may be produced during discovery and if results are not memorialized they could still be discovered through deposition testimony. Fortunately, courts have declined to order employees to take the IAT as part of discovery.[6]

The IAT is a popular tool in implicit bias training, because it is free and quick to administer and the results usually indicate that many of the test-takers exhibit implicit biases against protected classes. However, it provides plaintiffs with evidence of discrimination which would otherwise be unavailable.[7]

Employers should work to create a more diverse workforce, but they should take care to do it appropriately. The stakes are high, plaintiff’s lawyers are seeking to pin the monetary cost of centuries of discrimination on individual employers and have shown a willingness to use attempts to solve problems and improve the situation as evidence against employers. Human resources initiatives aimed at increasing diversity or alleviating bias should be thoroughly audited to ensure they won’t appear as Plaintiff’s Exhibit A in the near future. The stakes, monetary responsibility for the end result of hundreds of years of discrimination, are too high to take unnecessary risks.

 

ENDNOTES

[1] Huang v. Twitter, Inc., CGC-15-544813

[2] Pippen v. Iowa, 854 N.W. 2d 1 (Iowa 2014)

[3] Id.

[4] In Jaffe v. Morgan Stanley & Co., 2008 U.S. Dist. LEXIS 12208 (N.D. Cal. Feb. 7, 2008)  the court approved a settlement agreement where Defendant agreed “to provide diversity related training to field sales branch management which incorporates elements of the Implicit Association Test or similar tool agreed upon by the parties.”

[5] See e.g., Pippen v. Iowa, Iowa Dist. Ct., No. 107038 (2012); Jones v. Nat’l Council of Young Men’s Christian Associations of the United States, 2014 U.S. Dist. LEXIS 43866 (N.D. Ill. Mar. 31, 2014).

[6] Palgut v. City of Colo. Springs, 2008 U.S. Dist. LEXIS 123115 (D. Colo. July 3, 2008) (denying plaintiff’s Rule 35 motion to compel defendant’s employees to complete the IAT).

[7] Readers whose decisions may be scrutinized for implicit bias may not want to take the IAT, which is administered through Harvard University and takes fewer than 10 minutes to complete.

Considering Best Data Practices for ERISA Fiduciaries

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Today, Law360 published our article “Considering Best Data Practices for ERISA Fiduciaries.” (Read the full version here — Law360 subscription required.)

In this article, we outline steps that ERISA plan fiduciaries can take to develop a policy concerning protection of plan data and prudent selection and monitoring of plan service providers who handle PII.  Benefit plan service providers, including technology-based outsourcing companies, should also consider these important guidelines and implement the appropriate safeguards to protect against infringement of plan and participant data.  These issues must be addressed in service arrangements and will continue to evolve.

Following is an excerpt:

Employee benefit plan fiduciaries are charged with meeting a prudence standard when discharging their duties solely in the interest of plan participants and beneficiaries. With increasing regulation of benefit plans, these duties and associated responsibilities are mounting. With advancements in technology, online enrollment and access to account information, as well as benefit plan transaction processing, participant identifiable information and data have become increasingly more vulnerable to attack as it travels through employer and third-party systems.

Earlier this year, the attack on Anthem Inc.’s information technology system, which compromised the personal information of individuals under numerous health plans (including personally identifiable information, bank account and income data, and Social Security numbers), raised questions of privacy and security under the Health Insurance Portability and Accountability Act and Health Information Technology for Economic and Clinical Health Act, and there have been other similar attacks.

These cases remind us that in today’s world, plan participant information, whether it be protected health information, personally identifiable information or retirement savings account information, is vulnerable to theft. Employee Retirement Income Security Act plan fiduciaries must not only act prudently in responding to a breach of their plan participants’ PHI, but should also consider developing prudent policies and procedures with respect to the handling and transmission of all PII and participant data in the regular course.

In 2011, the Advisory Council on Employee Welfare and Pension Benefit Plans studied the importance of addressing privacy and security issues with respect to employee benefit plan administration. The council examined issues and concerns about potential breaches of the technological systems used in the employee benefit industry, the misuse of benefit data and PII and the impact on all parties, including plan sponsors, service providers, participants and beneficiaries. The council recognized several potential causes of breaches relating to benefit plan information, including hacking into retirement plan financial data, and recommended that the U.S. Department of Labor provide guidance on the obligation of plan fiduciaries to secure PII and develop educational materials. To date, the the Department of Labor has issued no such guidance.

LinkedIn, the Fair Credit Reporting Act, and the Real-World Implications of Online Activity

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With the ever-increasing amount of information available on social media, employers should remember to exercise caution when utilizing social media as a part of their Human Resources/ Recruitment related activities.  As we have discussed in a prior blog post, “Should Employers and Facebook Be Friends?” we live in a digital-age, and how people choose to define themselves is often readily showcased on social networking sites.  Whether – and how – employers choose to interact with the online presence of their workforce will continue to develop as the relevant legal standards try to catch up.

A recent federal court filing in the Northern District of California against LinkedIn Corp. provides yet another example of the growing interaction between online personas and real-world employment law implications.  There, in Sweet, et al v. LinkedIn Corp., the plaintiffs sought to expand the application of the Fair Credit Reporting Act (“FCRA”) by alleging that LinkedIn’s practice of providing “reference reports” to members that subscribe to LinkedIn’s program for a fee, brought LinkedIn within the coverage of the FCRA as a Credit Reporting Agency (“CRA”).  Briefly, the FCRA (and relevant state statutes like it) imposes specific requirements on an employer when working with “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.” In other words, there are rules – such as providing requisite disclosures and obtaining prior authorization – that apply when an employer engages a CRA to perform background checks, reference checks and related inquiries.

In the lawsuit, the plaintiffs alleged that LinkedIn was a CRA – and that these various rules should apply – because LinkedIn collected and distributed consumer information to third parties and the resulting reference reports “bear on a consumer’s character, general reputation, mode of living, or personal characteristics, and/or other factors listed in 15 U.S.C. § 1681a(d).”  Further, according to the complaint, LinkedIn violated the FCRA because it should have provided FCRA compliant disclosure and followed the reporting obligations applicable to CRAs.

LinkedIn, which is touted as the “world’s largest professional network,” does not portray itself as a CRA and moved to dismiss the complaint.  LinkedIn argued that the plaintiffs’ interpretation of the statute was too broad and, moreover, was inconsistent with the facts.  A federal judge agreed and dismissed the complaint (although the plaintiffs have the opportunity to file another complaint).  The Court ruled that these reference searches could not be considered “consumer reports” under the law – and LinkedIn was not acting as a CRA – because, in part, the plaintiffs had voluntarily provided their information to LinkedIn with the intention of it being published online.  (The FCRA excludes from the definition of a consumer report a report that contains “information solely as to transactions or experiences between the consumer and the person making the report.”) The Court also noted that the allegations suggested that LinkedIn “gathers the information about the employment histories of the subjects of the Reference Searches not to make consumer reports but to ‘carry out consumers’ information-sharing objectives.’”

The LinkedIn case should still serve as a reminder of several important and interrelated trends.  First, as it concerns the FCRA, the statute is broadly worded to cover “any written, oral or other communication of any information by a consumer reporting agency . . .” and the equally expansive definition of a CRA can apply in numerous situations that extend beyond the traditional notion of a consumer reporting agency.  If applicable, the requirements of the FCRA must be followed.  Second, employers need to continue to be mindful of the fact that their online activity can have real-world employment law implications.  Third, as the law governing traditional employment law continues to evolve in response to online developments, the challenges to that activity will evolve as well.

As these trends continue to develop, it is important to confer with legal representation to ensure compliance.

Massachusetts Issues Proposed Sick Leave Regulations

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My colleagues Nancy L. Gunzenhauser and Barry A. Guryan published a Health Care and Employment Law blog post that will be of interest to many of our readers: “Massachusetts Issues Proposed Sick Leave Regulations.”

Following is an excerpt:

As we reported, last November, voters in Massachusetts approved a law granting Massachusetts employees the right to sick leave, starting on July 1, 2015.  The law provides paid sick leave for employers with 11 or more employees and unpaid sick leave for employees with 10 or fewer employees. While the law set forth the basics, many of the details, which have differentiated the various sick leave laws across the country, were not previously specified (e.g., minimum increments of use, frontloading, documentation).  The Massachusetts Attorney General’s Office (“AGO”) has set forth proposed regulations to guide employers in implementing the upcoming sick leave law.

Read the full blog post here.

Epstein Becker Green’s Employment Law Desk Reference for Start-up Companies

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In the lifecycle of a start-up company, there are many key issues, situations and milestones when it is important to seek legal consultation. Epstein Becker Green has developed an easy to follow guide to highlight common workforce management issues (including employment, benefits and immigration concerns) start-up employers must consider as they grow their business and application of important laws which are triggered by employee count.

The Workforce Guide outlines critical areas such as:

  • Onboarding and compensation;
  • Managing existing workforce;
  • Separation; and
  • Statutory thresholds triggered by employee count.

This is merely a guide but should be helpful in determining when to seek legal consultation on these and other workplace management issues.   Click here to download the guide.

April 22 Complimentary Webinar Concerning EEOC Wellness Regulations

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To register for this complimentary webinar, please click here.

I’d like to recommend an upcoming complimentary webinar, “EEOC Wellness Regulations – What Do They Mean for Employer-Sponsored Programs? (April 22, 2015, 12:00 p.m. EDT) presented by my Epstein Becker Green colleagues Frank C. Morris, Jr. and Adam C. Solander.

Below is a description of the webinar:

On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) released its long-awaited proposed regulations governing employer-provided wellness programs under the American’s with Disabilities Act (“ADA”). Although the EEOC had not previously issued regulations governing wellness programs, the EEOC has filed a series of lawsuits against employers alleging that their wellness programs violated the ADA. Additionally, the EEOC has issued a number of public statements, which have concerned employers, indicating that the EEOC’s regulation of wellness programs would conflict with the regulations governing wellness programs under the Affordable Care Act (“ACA”) and jeopardize the programs currently offered to employees.

During this webinar, Epstein Becker Green attorneys will:

  • summarize the EEOC’s recently released proposed regulations
  • discuss where the EEOC’s proposed regulations are inconsistent with the rules currently in place under the ACA and the implications of the rules on wellness programs
  • examine the requests for comments issued by the EEOC and how its proposed regulations may change in the future
  • provide an analysis of what employers should still be concerned about and the implications of the proposed regulations on the EEOC’s lawsuits against employers

Who Should Attend:

  • Employers that offer, or are considering offering, wellness programs
  • Wellness providers, insurers, and administrators

To register for this complimentary webinar, please click here.

EEOC Issues Proposed Wellness Program Amendments to ADA Regulations

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My colleagues Frank C. Morris, Jr., Adam C. Solander, and August Emil Huelle co-authored a Health Care and Life Sciences Client Alert concerning the EEOC’s proposed amendments to its ADA regulations and it is a topic of interest to many of our readers.

Following is an excerpt:

On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) released its highly anticipated proposed regulations (to be published in the Federal Register on April 20, 2015, for notice and comment) setting forth the EEOC’s interpretation of the term “voluntary” as to the disability-related inquiries and medical examination provisions of the American with Disabilities Act (“ADA”). Under the ADA, employers are generally barred from making disability-related inquiries to employees or requiring employees to undergo medical examinations. There is an exception to this prohibition, however, for disability-related inquiries and medical examinations that are “voluntary.”

Click here to read the full Health Care and Life Sciences Client Alert.

Spate of Gender Discrimination Lawsuits Against Silicon Valley Technology Companies Highlights the Importance of Adopting and Enforcing Anti-Discrimination Policies and Procedures

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Recent discrimination lawsuits filed by former employees against Facebook and Twitter, serve as a reminder of the importance of having robust sexual harassment and equal employment opportunity policies in place. In Chia Hong v. Facebook, Inc., et al., which was filed on March 16, 2015 in the Superior Court of California in and for San Mateo County, former Facebook employee Chia Hong, who is Taiwanese, alleges that during her employment at Facebook she was discriminated against and harassed on the basis of her gender, race and nationality in violation of the California Fair Employment and Housing Act. Hong, who worked as a Technology Partner, further alleges that she was terminated in retaliation for complaining about the alleged mistreatment.

Three days after the commencement of the Hong lawsuit, Tina Huang, a former software engineer at Twitter, filed a class action complaint for sex discrimination under the California Fair Employment and Housing Act against Twitter in the Superior Court of California, County of San Francisco. (See Huang v. Twitter, Inc., Case No. CGC-15-544813, Superior Court of California, County of San Francisco). The class action lawsuit alleges that Twitter’s system for promoting employees is not fully disclosed to the workforce and is biased against female employees.

The Hong and Huang cases have sparked great interest in Silicon Valley and the media at large, especially in light of the recent trial in the high-profile gender discrimination case brought by Ellen Pao against her former employer venture capital firm Kleiner Perkins Caufield & Byers. Despite the fact that Pao did not prevail on her claims, with the jury on March 27, 2015 ruling that Kleiner Perkins had not discriminated against Pao, Pao’s actions may have served as inspiration for the Hong and Huang actions and may inspire additional discrimination suits in the technology industry.

These lawsuits come during a time where Silicon Valley companies have been under scrutiny in the media for their lack of diversity. For instance, the Diana Center at Babson College reports that only 6% of venture capital partners are women.  At Kleiner Perkins, about 20% of the venture capital partners are women. Facebook, per a diversity report released in 2014, has a global staff that is 31% female and 69% male.  Only 15% of Facebook’s technical employees are female. Similarly, Twitter’s diversity report from 2014 states that 30% of the company is female, but just 10% of the technical employees are female.  The overall lack of diversity in the Silicon Valley technology industry could make the industry an attractive target for further discrimination suits.

As previously discussed in the January 22, 2015 blog post, Five Employment Law Pitfalls Start-Ups Should Avoid, under “federal law (and many state and city law counterparts), an employer can demonstrate that having both a sexual harassment policy with a complaint procedure (so employees can let the company know if harassment or discrimination is occurring in the workplace) is a defense to a sexual harassment or other discrimination claim.” In light of the recent spate of discrimination lawsuits brought against the technology industry and the increased focus on the need to address industry-wide diversity issues, technology industry employers should review their current policies and procedures to ensure that they are in compliance with federal, state and local laws. Employers, given the current environment, should also consider implementing employee training programs on anti-harassment and anti-discrimination and retaliation policies as an aide to fostering and developing a culture that does not accept or promote discrimination. Epstein Becker & Green, P.C., attorneys can assist with updating existing, or developing new, policies to comply with federal, state and local anti-harassment and discrimination laws and with developing and providing training to the workforce.

FMLA Same-Sex Spouse Final Rule Enjoined in Some States

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One day before the U.S. Department of Labor’s Family & Medical Leave Act (“FMLA”) same-sex spouse final rule took effect on March 27, 2015, the U.S. District Court for the Northern District of Texas ordered a preliminary injunction in Texas v. U.S., staying the application of the Final Rule for the states of Texas, Arkansas, Louisiana, and Nebraska. This ruling directly impacts employers within the technology, media, and telecommunications industries who are located or have employees living in these four states.

Background

In United States v. Windsor, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (“DOMA”) as unconstitutional, finding that Congress did not have the authority to limit a state’s definition of “marriage” to “only a legal union between one man and one woman as husband and wife.”  Significantly, the Windsor decision left intact Section 2 of DOMA (the “Full Faith and Credit Statute”), which provides that no state is required to recognize same-sex marriages from other states.  Further to the President’s directive to implement the Windsor decision in all relevant federal statutes, in June 2014, the DOL proposed rulemaking to update the regulatory definition of spouse under the FMLA. The Final Rule is the result of that endeavor.

As we previously reported, the Final Rule adopts the “place of celebration” rule, thus amending prior regulations which followed the “place of residence” rule to define “spouse.”  For purposes of the FMLA, the place of residence rule determines spousal status under the laws where the couple resides, notwithstanding a valid out-of-state marriage license.   The place of celebration rule, on the other hand, determines spousal status by the jurisdiction in which the couple was married, thus expanding the availability of FMLA leave to more employees seeking leave to care for a same-sex spouse.

The Court’s Decision

Plaintiff States Texas, Arkansas, Louisiana, and Nebraska sued, arguing the DOL exceeded its authority by promulgating a Final Rule that requires them to violate Section 2 of the DOMA and their respective state laws prohibiting the recognition of same-sex marriages from other jurisdictions.  The Texas court ordered the extraordinary remedy of a preliminary injunction to stay the Final Rule pending a full determination of the issue on the merits.

The court first found that the Plaintiff States are likely to succeed on at least one of their claims, which assert that the Final Rule improperly conflicts with (1) the FMLA, which defines “spouse” as “a husband or wife, as the case may be” and which the court found was meant “to give marriage its traditional, complementarian meaning”; (2) the Full Faith and Credit Statute; and/or (3) state laws regarding marriage, which may be preempted by the Final Rule only if Congress intended to preempt the states’ definitions of marriage.

The court then held that the Final Rule would cause Plaintiff States to suffer irreparable harm because, for example, the Final Rule requires Texas agencies to recognize out-of-state same-sex marriages as valid in violation of the Texas Family Code.

Lastly, although finding the threatened injury to both parties to be serious, the court decided that the public interest weighs in favor of a preliminary injunction against the DOL.  The court found in favor of upholding “the stability and consistency of the law” so as to permit a detailed and in-depth examination of the merits.  Additionally, the court pointed out that the injunction does not prohibit employers from granting leave to those who request leave to care for a loved one, but reasoned that a preliminary injunction is required to prevent the DOL “from mandating enforcement of its Final Rule against the states” and to protect the states’ laws from federal encroachment.

What This Means for Employers

Although the stay of the Final Rule is pending a full determination of the issue on the merits, the U.S. Supreme Court’s decision in Obergefell v. Hodges likely will expedite and shape the outcome of the Texas court’s final ruling.  In Obergefell, the Supreme Court will address whether a state is constitutionally compelled under the Fourteenth Amendment to recognize as valid a same-sex marriage lawfully licensed in another jurisdiction and to license same-sex marriages.  Oral arguments in Obergefell are scheduled for Tuesday, April 28, 2015, and a final ruling is expected in late June of this year.

Before the U.S. Supreme Court decides Obergefell, however, employers in Texas, Arkansas, Louisiana and Nebraska are advised to develop a compliant strategy for implementing the FMLA—a task that may be easier said than done.  Complicating the matter is a subsequent DOL filing in Texas v. U.S. where the DOL contends that the court’s order was not intended to preclude enforcement of the Final Rule against persons other than the named Plaintiff States, and thus applies only to the state governments of the states of Texas, Arkansas, Louisiana, and Nebraska.

While covered employers are free to provide an employee with non-FMLA unpaid or paid job-protected leave to care for their same-sex partner (or for other reasons), such leave will not exhaust the employee’s FMLA leave entitlement and the employee will remain entitled to FMLA leave for covered reasons.  We recommend that covered employers that are not located and do not have employees living in one of the Plaintiff States amend their FMLA-related documents and otherwise implement policies to comport with the Final Rule, as detailed in EBG’s Act Now Advisory, DOL Extends FMLA Leave to More Same-Sex Couples.  Covered employers who are located or have employees living in one of the Plaintiff States, however, should confer with legal counsel to evaluate the impact of Texas v. U.S. and react accordingly, which may depend on the geographical scope of operations.

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