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Employers in limbo as government entities differ on meaning of laws

by Burton J. Fishman

When the U.S. Supreme Court opened its new term on October 2, 2017, the legal world was knocked off its axis. In a rarely seen occurrence, the solicitor general, speaking on behalf of the United States, and the General Counsel of the National Labor Relations Board (NLRB) took opposing positions on the same issue: the legality of mandated waivers of classwide arbitration. For our purposes here, the particular merits of the consolidated case—NLRB v. Murphy Oil USA, Inc., Epic Systems Corp. v. Lewis, and Ernst & Young LLP v. Morris—are not the focus; the larger issue is what affected parties should do when the government and the enforcing agency take opposing positions.    

Until the Supreme Court rules, employers are left wondering if they can enforce a compulsory arbitration clause on a putative class. Can such a clause be required as a condition of employment? Although the stark contrast at the Supreme Court may be unusual, the dilemma for employers may have just begun. Similar rifts are proliferating on other issues, leaving employers and employees in a quandary.

What does Title VII protect?
One of the most significant conflicts involves the meaning of Title VII of the Civil Rights Act of 1964, the most important workplace rights law of the past 50-plus years. The Equal Employment Opportunity Commission (EEOC), the independent agency authorized to interpret and enforce Title VII, has maintained since 2015 that the law’s protection against discrimination based on sex includes discrimination based on sexual orientation. Several courts, including the U.S. 7th Circuit Court of Appeals, have followed the EEOC’s interpretation. Up until a few weeks ago, it appeared that the EEOC spoke for the government, which is expected to communicate in a single voice on legal matters. No more.

In a case before the 2nd Circuit, Zarda v. Altitude Express, the U.S. Department of Justice (DOJ) filed an unsolicited amicus (friend-of-the-court) brief announcing that Title VII, in its opinion, does not offer protections to homosexuals as a class. That position is completely contrary to the stance taken by the EEOC, which had been invited by the court to offer “the government’s position.” The 2nd Circuit was openly nonplussed by the very presence of the DOJ, which routinely defers to the EEOC in such matters. Judge Rosemary Pooler noted: “We love to hear from the federal government, but it’s a bit awkward to hear from them on both sides.”

Again, the substance of the argument isn’t our focus. What concerns us is the unprecedented conflict between two agencies of the executive branch in open court and the dilemma that conflict creates for employers: Is it now legal to discriminate against gays? Must the EEOC alter its views? Should federal contractors comply with the Office of Federal Contract Compliance Programs’ (OFCCP) interpretation of Title VII, which is identical to the EEOC’s position? What if the 2nd Circuit agrees with the EEOC rather than the DOJ? Can an appellate court’s decision trump the DOJ’s interpretation? Is there going to be a different application of federal law in different circuits? What about state law?

Conflicting guidance and memos
These problems are certain to proliferate. On October 4, Attorney General Jeff Sessions issued an official advisory memo stating that transgender status is not protected by any federal law, including Title VII. That reading is in clear conflict with the EEOC’s interpretation of Title VII protections for transgender employees and job applicants.

Also on October 4, the EEOC published a training program to help employers address (and reduce) harassing speech and conduct in the workplace to avoid violations of Title VII. As uncontroversial as that seems, the NLRB and its General Counsel have issued several rulings and memoranda opining that a “civility code” limiting employees’ ability to engage in certain forms of workplace speech and conduct conflicts with their “protected speech” under the National Labor Relations Act (NLRA). Again, what’s an employer to do—choose between an NLRB unfair labor practice charge or an EEOC discrimination charge?

On October 6, Attorney General Sessions issued another memorandum instructing all agencies of the executive branch to implement an expansive interpretation of the Religious Freedom Restoration Act (RFRA). Just how that edict will affect the workplace remains to be seen, but employees may face discrimination based on sincerely held religious beliefs and employers may be required to provide accommodations for religious purposes far beyond anything established by the EEOC or the courts. And what of conflicts between and among religions? Can a devout Christian employer refuse to grant Muslim employees break time for prayers? Even if Christian employees are granted such break time? Does religious freedom have a “tilt”?

Bottom line
The problems these—and other—differing legal positions pose for employers are daunting, to say the least. For many employers, the conflict may have little immediate impact. Workplace policies implemented by private-sector companies often exceed what the law requires. State laws that are broader than federal statutes must be honored. But those functional realities merely mask the underlying problems, putting difficult decisions off to another day. It’s an untenable situation that cannot long persist. However, the mechanisms for resolving the conflicts between federal agencies’ interpretations of the law may not even exist because no one seems to have anticipated them.

The larger problem created by these legal conflicts reaches far beyond the practical difficulties faced by employers and goes to the very foundations of our country. All democracies are fragile, balancing countless individual views, but successful ones are held together by a common respect for the rule of law. bjfThat common bond, that shared respect, is endangered to a critical point when the very entities empowered to articulate and enforce our laws are in such disarray. We look to our government to bring back our common understanding of the laws on which we rely. Even in the midst of international crises and natural disasters, there is no more pressing issue.

Burton J. Fishman is an attorney with Fortney & Scott, LLC, in Washington, D.C. You can reach him at bfishman@fortneyscott.com.