Featured as our top story on Employment Law This Week: Me too At Work – Sexual misconduct in the C-Suite leads to shareholder lawsuits.

Last month on Employment Law This Week, you heard that sexual misconduct allegations would start impacting shareholder value and reputation. Well, now we’ve got a case study in Wynn Resorts. After the Wall Street Journal uncovered multiple sexual misconduct allegations against Casino mogul Steve Wynn, the company’s stock fell nearly 20%. Wynn resigned a week later, but the company’s troubles were far from over. The company’s  stock has lost $3 billion in value. The first shareholder lawsuit was filed the day Wynn resigned, and to date three suits by shareholders claim that Wynn and the Board breached their fiduciary duties to the company and its shareholders. Bill Milani, from Epstein Becker Green, has more.

Watch the segment below and read our recent post.

Our colleague  at Epstein Becker Green has a post on the Health Employment and Labor blog that will be of interest to our readers in the financial services industry: “New York City Council Passes Bills Establishing Procedures on Flexible Work Schedules and Reasonable Accommodation Requests.”

Following is an excerpt:

The New York City Council recently passed two bills affecting New York City employers and their employees. The first bill, Int. No. 1399, passed by the Council on December 6, 2017, amends Chapter 12 of title 20 of the City’s administrative code (colloquially known as the “Fair Workweek Law”) to include a new subchapter 6 to protect employees who seek temporary changes to work schedules for personal events.  Int. No. 1399 entitles New York City employees to request temporary schedule changes twice per calendar year, without retaliation, in certain situations, e.g., caregiver emergency, attendance at a legal proceeding involving subsistence benefits, or safe or sick time under the New York City administrative code.  The bill establishes procedures for employees to request temporary work schedule changes and employer responses.  Exempt from the bill are employees: (i) who are covered by a collective bargaining agreement; (ii) who have been employed for fewer than 120 days; (iii) who work less than 80 hours in the city in a calendar year; and (iv) who work in the theater, film, or television industries. …

Read the full post here.

As 2017 comes to a close, recent headlines have underscored the importance of compliance and training. In this Take 5, we review major workforce management issues in 2017, and their impact, and offer critical actions that employers should consider to minimize exposure:

  1. Addressing Workplace Sexual Harassment in the Wake of #MeToo
  2. A Busy 2017 Sets the Stage for Further Wage-Hour Developments
  3. Your “Top Ten” Cybersecurity Vulnerabilities
  4. 2017: The Year of the Comprehensive Paid Leave Laws
  5. Efforts Continue to Strengthen Equal Pay Laws in 2017

Read the full Take 5 online or download the PDF.

Our colleagues Brian W. Steinbach and Judah L. Rosenblatt, at Epstein Becker Green, have a post on the Heath Employment and Labor blog that will be of interest to many of our readers in the financial services industry: “Mayor Signs District of Columbia Ban on Most Employment Credit Inquiries.”

Following is an excerpt:

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. …

Read the full post here.

Bound by precedent, on July 28, 2016, a panel of the U.S. Court of Appeals for the Seventh Circuit held that sexual orientation discrimination is not sex discrimination under Title VII of the Civil Rights Act of 1964. The panel thereby affirmed the decision of the U.S. District Court for the Northern District of Indiana dismissing the claim of Kimberly Hively, a part-time adjunct professor at Ivy Tech Community College, that she was denied the opportunity for full-time employment on the basis of her sexual orientation.

The importance of the Seventh Circuit panel’s opinion is not in its precise holding but both (i) the in-depth discussion of Seventh Circuit precedence binding it, the decisions of all of the U.S. Courts of Appeals (except the Eleventh Circuit) that have held similarly, and Congress’s repeated rejection of legislation that would have extended Title VII’s protections to sexual orientation, and (ii) the multifaceted bases for its entreaties to the U.S. Supreme Court and the Congress to extend Title VII’s prohibition against sex discrimination to sexual orientation discrimination.

The Seventh Circuit panel highlighted the following reasons as to why the Supreme Court or Congress must consider extending Title VII’s protections to sexual orientation:

  • The EEOC ruled last year that sexual orientation is sex discrimination under Title VII. The Equal Employment Opportunity Commission (EEOC) held for the first time, in 2015, that “sexual orientation is inherently a ‘sex-based consideration” and that sexual orientation discrimination is “necessarily an allegation of sex discrimination under Title VII.” The EEOC’s rationale was that sexual orientation discrimination (i) “necessarily entails treating an employee less favorably because of the employee’s sex”; (ii) is associational discrimination when an employer discriminates against an LGBT employee on the basis of the sex of the person they marry or date; and (iii) is a form of discrimination based on gender stereotyping. Although the EEOC’s decision applies only to government employees, its reasoning would apply to private-sector employment. Further, while the EEOC’s decisions are not binding on the courts, they are entitled to some deference, given that the EEOC is the agency primarily charged with enforcing Title VII.
  • The distinction between sex stereotyping and sexual orientation discrimination is arbitrary. The U.S. Supreme Court declared in 1989 that Title VII protects employees who fail to comply with typical gender stereotypes. On that basis, courts have recognized claims for sex stereotyping as constituting claims for sex discrimination under Title VII, although, in doing so, courts have had to draw the line between sex stereotyping discrimination, which is prohibited under Title VII, and sexual orientation discrimination, which is not prohibited under Title VII. This has led to the conclusion by many courts that the line between sex stereotyping discrimination and sexual orientation discrimination is arbitrary.
  • LGBT rights are protected in other contexts and other jurisdictions. The Supreme Court has protected LGBT rights under constitutional analyses by (i) striking down a state constitutional amendment prohibiting the protection of LGBT persons from discrimination on the basis of sexual orientation, (ii) protecting the right to engage in private consensual sexual conduct without government intervention, (iii) striking down the Defense of Marriage Act, and (iv) declaring the right of same-sex couples to marry in every state. Also, 22 states (and the District of Columbia) prohibit sexual orientation discrimination in employment, and 12 additional states prohibit sexual orientation discrimination in government employment.
  • Title VII’s association protections accorded on the basis of race should apply equally to LGBT individuals. The EEOC and the courts protect employees in interracial relationships—whether marriage, friendships, and other associations. The Seventh Circuit panel reasoned that, since the same standard of protection is accorded to each of Title VII’s protected categories, the same protection should be accorded to individuals in a relationship, regardless of sex.
  • The definition of “sex” would not need to be expanded. The Supreme Court has already said, “Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.”

The Seventh Circuit panel concluded that the EEOC, many courts, and even the Seventh Circuit panel itself do not condone a legal structure that tolerates employment discrimination on the basis of sexual orientation. However, until the Supreme Court issues an opinion or Congress enacts legislation that extends Title VII’s protection against sex discrimination to sexual orientation discrimination, the courts must adhere to precedent.

What the Decision Means for Employers

The takeaway for employers is not that Title VII fails to currently prohibit sexual orientation discrimination in employment. Rather, the Seventh Circuit panel’s decision reminds us that the EEOC and several district courts have held that Title VII’s prohibition against sex discrimination extends to sexual orientation discrimination and close to half of the states prohibit sexual orientation discrimination in employment.

Our colleagues Peter M. Panken, Nancy L. Gunzenhauser, and Marc-Joseph Gansah have a post on the Retail Labor and Employment Blog that will be of interest to many of our readers in the financial services industry: “Employers Should Care About This: New York City’s Amendment on Caregiver Discrimination.”

Following is an excerpt:

The New York City’s Human Rights law (“NYCHRL”) prohibits employment discrimination against specified protected classes of employees and applicants including:

race, color, creed, age, national origin, alienage or citizenship status, gender, sexual orientation, disability, marital status, partnership status, any lawful source of income, status as a victim of domestic violence or status as a victim of sex offenses or stalking, whether children are, may be or would be residing with a person or conviction or arrest record.

If this list wasn’t long enough, on May 4, 2016, NYCHRL will add “caregivers” to the protected classes including, anyone who provides ongoing medical or “daily living” care for a minor, any disabled relative or disabled non-relative who lives in the caregiver’s household. …

Read the full post here.