- Whether or not an employer takes a tip credit, all tips an employee earns belong to that employee, except for any amount the employee is required to "tip out" (contribute to a legitimate tip pool). Employers aren't entitled to any part of the tip pool. At least one court had held that an employer who doesn't take a tip credit need not let employees keep their tips, as long as the employees were left with at least the minimum wage. The regulations specifically dispute the holding of this case.
- Only employees who regularly and customarily receive tips can participate in the tip pool -- and again, this rule applies whether or not the employer takes a tip credit. Employees who don't typically receive tips, such as cooks and dishwashers, may not participate in the pool. The final regulations don't set a limit on how much of their tips employees may be required to put in the pool; in fact, they state explicitly that the law "does not impose a maximum contribution percentage." Previous guidance documents and opinion letters from the DOL had put a maximum on the amount employees could be required to contribute, or said that employees could not be required to contribute more than was customary in their industry, but these limits did not make it into the final regulations. Once the employer comes up with an amount, however, it is required to notify employees how much they will be required to contribute to the pool.
- Employees are entitled to notice if the employer will take a tip credit. This notice must include: (1) the hourly cash wage the employer will pay the employee; (2) the amount of tips that the employer will take as a tip credit (that is, the employer will count that amount toward the employee's wages, to meet the minimum wage requirement); (3) that the employee is entitled to retain all tips received except any amount the employee is required to contribute to a valid tip pooling arrangement limited to employees who customarily and regularly receive tips; and (4) that the tip credit shall not apply to any employee who has not been informed of these requirements. The final regulations do not require this notice to be in writing; employers may inform employees orally, if they wish. As a practical matter, however, employers who plan to take a tip credit should provide written notice, so they can later prove that they properly notified employees, if necessary.
Last Friday, the EEOC issued its long-awaited final regulations interpreting the Americans with Disabilities Act Amendments Act (ADAAA). The Commission released proposed regulations interpreting the ADAAA and asking for public comment about a year and a half ago. After reading the more than 600 comments that were submitted in response to the proposed regs, the EEOC made some key changes and additions. (You can read my previous post on the proposed regs here.)
Here are a handful of the changes I found interesting:
List of disabilities. Actually, I don't think this is much of a change, although others disagree. The proposed regulations included a list of impairments that "will consistently meet the definition of disability." Previously, courts had interpreted the ADA to require an individual assessment of the way a particular impairment affected a particular employee. Many commentators objected to the proposed list, arguing that the regulations should still require an individual analysis. The final regulations changed the wording -- in a way that many employer advocacy groups applaud -- but to me, it looks like the effect will still be the same. Rather than saying these impairments will "consistently meet" the definition, the final regulations say that they will, "as a factual matter, virtually always be found" to be disabilities, which means that "the necessary individualized assessment should be particularly simple and straightforward." Then, the final regulations list the exact same impairments that appeared in the proposed regulations.
"Regarded as" disability claims. An employee can be protected by the ADA because the employee has a disability (termed "actual disability" cases by the final regs); because the employee has a record of disability, or because the employer incorrectly regards the employee as having a disability. The ADAAA clarified that an employee making a "regarded as" claim isn't entitled to a reasonable accommodation (which makes sense, as the employee isn't claiming to have a disability), but also need not prove that the employer regarded him or her as having a disability as defined by the ADA -- that is, an impairment that substantially limits a major life activity. The final regulations state that an employee who doesn't need a reasonable accommodation and isn't challenging the employer's failure to provide such an accommodation can proceed under the rules for "regarded as" claims. In other words, an employee who is claiming discrimination (rather than failure to accommodate) doesn't have to prove that he or she has a disability.
Substantially limits. In keeping with the ADAAA directive that the EEOC should redefine "subtantially limits" in favor of broader coverage, the final regulations state that the term is "not meant to be a demanding standard." They also clarify that a person can be substantially limited in performing a major life activity even if that person is not prevented, or significantly restricted, from performing that activity. The final regulations indicate that the condition, manner, and duration of the person's performance of the activity should be examined. For example, can the person perform the activity only for a brief period? Must the person expend significant effort to perform the activity? Is it painful or otherwise difficult for the person to perform the activity? Do the side effects of medication or other treatment make it harder for the person to perform the activity?
Transitory and minor impairments. The ADAAA states that an employee may not make a "regarded as" disability claim based on transitory and minor impairments. The final regulations clarify that this is an affirmative defense, to be proved by the employer, which must show that the impairment is both minor and transitory, in fact. It's not enough to show that it's either minor or transitory, nor that the employer mistakenly believed it to be minor and transitory.
Working as a major life activity. The proposed regulations included a lengthy discussion of the major life activity of working. This section was unpopular with employer advocacy groups -- and was removed from the final regulations. It's still discussed in the Appendix to the regulations, but in abbreviated form. (Many examples that appeared in the proposed regs were similarly consigned to the Appendix in the final version.)
In an odd twist, the Court explicitly declined to address whether the employee must make a complaint to a governmental agency to be protected, even though the case involved an employee who complained only to the employer. (In other words, if the employee must complain to an agency, Kasten doesn't have a retaliation claim.) Apparently, the employer hadn't kept this argument alive properly on appeal, so the Court wasn't required to consider it. And in the majority opinion, Justice Breyer argued that there was no need for the Court to resolve this question, because it wasn't necessary to the Court's decision in the case. Still, it's a fairly large issue to leave undecided, especially when the claims of the actual employee in the case depend on how it's resolved.To fall within the scope of the antiretaliation provision, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection.
- a supervisor takes action, motivated by discriminatory bias, intending to cause an adverse employment action against the employee, and
- the supervisor's action is a proximate cause of the action against the employee.
- Investigate! Cat's paw liability depends on causation -- in other words, the person with the discriminatory motive must have some effect on the decision. If the decision maker independently examines the facts, the causal chain is broken. Presumably, the decision maker will uncover the discriminatory bias (and therefore decide not to take action against the employee at all). It wouldn't have been hard in the Staub case, in which these supervisors were apparently willing to tell everyone how they felt about Staub's military obligations.
- Train managers. In the Staub case, two supervisors appear to have had an ongoing campaign against an employee for wholly inappropriate and discriminatory reasons. A little training could have gone a long way here. If supervisors aren't making discriminatory statements and decisions in the first place, they won't be creating liability for the company.
- Think about settlement. For the unhappy employers that find themselves on the wrong end of a valid cat's paw claim, the Supreme Court's decision virtually guarantees that the case won't end early. Questions of motive (in a cat's paw case, the motives of at least two people: the allegedly discriminatory supervisor and the ultimate decision maker), cause, and the effectiveness of an investigation can be answered only by examining the underlying facts. If those facts are in dispute, the employer won't be able to end the case by winning a motion for summary judgment. Instead, the case will go to trial, where a jury will have to ultimately decide where the truth lies.
- Policies are important. Employees, read your company's policies and act accordingly. If your company prohibits personal use of the email system, just don't do it. Don't get lulled into a false sense of security by lax enforcement, because you can bet that the company will enforce that policy once it has a reason to. Employers, if you ever anticipate you might have to read employee email, adopt a policy, ask employees to sign a form acknowledging that they have received and read it, and enforce it consistently.
- Take a deep breath and count to ten. You can send an email message in a moment, but that doesn't mean you should. A little patience would have served everyone well in this case, including: (1) Petrovich, who responded to Holmes's message about her pregnancy leave "a short time later" with the comment, "I need some honesty. How pregnant were you when you interviewed with me?" (2) Holmes, who began her email reply to this message by saying that she thought the conversation should be conducted in person, "but here it goes anyway . . . " (3) Holmes again, who first emailed her attorney, from work, at 3:30 in the afternoon. You couldn't wait a couple of hours and email from home, or maybe just call her on your cell phone?