The Beginning of the End for 401(k) Class Actions?

In Dorman v. Charles Schwab Corp., (Aug. 20, 2019), the Ninth Circuit Court of Appeals held that a 401(k) plan participant was required to individually arbitrate his claims regarding the plan’s fees and investment options, pursuant to the plan’s arbitration provision.

Factual Background

The plaintiff, a former employee of Charles Schwab & Co. Inc., was a participant in Schwab’s defined contribution 401(k) plan, which was amended during his employment to include an arbitration provision with a class and collective action waiver. The employee was also enrolled in the Schwab Investor Financial Consultant Compensation Plan, which contained a class action waiver and a provision mandating arbitration of any claims arising out of his employment, except for claims for benefits.

After his employment at Schwab and his participation in both the 401(k) plan and the compensation plan had ended, the employee filed a class action on behalf of all participants in and beneficiaries of both plans. The complaint asserted claims under § 502(a)(2) and (3) of the Employee Retirement Income Security Act (ERISA). The employee alleged that the defendants—Schwab and various Schwab entities and employees—had breached their fiduciary duties and engaged in prohibited transactions in violation of ERISA by including Schwab-affiliated investment funds in the 401(k) plan. According to the employee, the funds performed poorly but were kept as investment options in the 401(k) plan to generate fees for Schwab and its affiliates.

The employee also alleged that certain defendants breached their duty to monitor the 401(k) plan’s fiduciaries, and he asserted claims for co-fiduciary breach and knowing participation in a breach.

Ninth Circuit’s Ruling

The defendants moved to compel individual arbitration, citing the arbitration agreements in both the 401(k) and compensation plans. The district court denied the motion and the defendants appealed. In a published decision, the Ninth Circuit first addressed whether ERISA claims could be subject to mandatory arbitration. The Ninth Circuit had previously held in Amaro v. Continental Can Co. that ERISA claims were not arbitrable. The Ninth Circuit held that Amaro had been overruled by intervening jurisprudence from the Supreme Court of the United States holding that “federal statutory claims are generally arbitrable and arbitrators can competently interpret and apply federal statutes.”

[SHRM members-only toolkit: Designing and Administering Defined Contribution Retirement Plans]

Unpublished Memorandum

In a concurrently filed unpublished memorandum, the court addressed the defendants’ specific arguments and held that the district court had erred by denying the defendants’ motion to compel arbitration. The Ninth Circuit noted that the employee—by participating in the 401(k) plan for nearly a year after the arbitration provision was added—and the 401(k) plan had agreed to arbitrate all ERISA claims. The court held that the claims fell within the scope of the 401(k) plan’s arbitration provision and rejected the district court’s reasoning that the arbitration provision was unenforceable because it violated the National Labor Relations Act (NLRA) and ERISA.

The Supreme Court recently held that an arbitration agreement containing a class action waiver does not violate the NLRA. Further, ERISA does not prohibit arbitration and this was not an attempt to insulate fiduciaries from liability. Therefore, the Ninth Circuit concluded, “because ‘arbitration is a matter of contract,’ the [arbitration provision’s] waiver of class-wide and collective arbitration must be enforced according to its terms, and the arbitration must be conducted on an individualized basis.”

Key Takeaways

This Ninth Circuit decision will likely be the subject of a petition for rehearing and possibly a petition for certiorari at the Supreme Court. Nevertheless, it is an important decision and it is the second Ninth Circuit arbitration decision impacting ERISA plans in the past 13 months. This may lead employers to consider adding arbitration provisions with class waivers to their employee benefit plans. Aside from individual benefit claims, most suits against ERISA plans in the past several years have been filed as class actions. Many of those suits ended in multi-million-dollar settlements. At least in the Ninth Circuit, it appears that employers can combat this trend by requiring plan participants to engage in individual arbitration of their ERISA claims, even if the arbitration provision is added to a 401(k) plan after a participant joined the plan.

The potential downside to such provisions is that requiring individual arbitration could result in multiple arbitrations regarding the same issues. However, it could also discourage such claims in the first place where the prospect of arbitrating multiple individual claims requires litigants to face significant costs to prosecute claims that may not involve much money to each individual participant. It remains to be seen where other circuit courts or the Supreme Court land on the arbitration issue, but the Ninth Circuit decision seems to forecast a significant change in how ERISA disputes are resolved.

Mark E. Schmidtke, Madeline Chimento Rea and Stephanie C. Ng and attorneys concentrating on ERISA and benefit matter with Ogletree Deakins. © 2019 Ogletree, Deakins, all rights reserved, reposed with permission.

How to Help Employees Overcome September Stress

​Even though Labor Day is a holiday, it may be one of the most stressful days of the year for many employees and managers. They have enjoyed the spoils of summer for the past few months, and now Labor Day brings a tiny but growing thought that won’t go away: The party’s over. 

September, or as some like to call it in the Twitterverse, “Stresstember,” is one of the more anxiety-inducing months of the year. According to Christopher Ingram, a former Pew Research analyst, some of the highest peaks in Internet searches related to depression and anxiety occur in the month of September. An article published in 2014 on Ingram’s “misery index,” which relies on user search data for its conclusions, claimed summer was the happiest season, while fall was the most stressful. Identical search terms in 2019 demonstrate similar trends, although overall stress and searches for depression-related terms are significantly higher in 2019 than in 2014. So, not only is fall still one of the more stressful seasons, stress in general is getting worse.

The reason why fall might be particularly stressful can be attributed to the dramatic shift in routines. Whenever we experience atypical changes in our daily schedule, it can be highly disruptive to our physical and mental health. According to the National Center for Education Statistics, roughly 56.6 million students will attend elementary, middle and high schools nationally this fall. For millions of working parents, back-to-school season can feel like a giant tree just fell across their path and they’re now scrambling to maneuver around it. On the first day of school, they will hastily make lunches again and photograph and wave goodbye to the kids. There will be more buses on the road and longer commuting times, adding to the stress.

In addition, seasonal affective disorder (SAD) impacts 10 million people in the U.S. annually, and it is four times more common in women than in men, according to the American Academy of Family Physicians (AAFP). The AAFP claims that another 10 percent to 20 percent of Americans will experience milder versions of the disorder. Seasonal depression is often linked only to winter because the increased darkness during the season reduces vitamin D absorption, which is especially true the farther north you live. For example, Washington state has seven times more cases of SAD than Florida. Autumn can be the trigger for SAD and poses its own serious challenges to mental health. Unfortunately for most managers, September is a mental health and well-being blind spot.

How to Ramp Up Without Burning Out

For most organizations, the Tuesday following Labor Day is all about resetting, and many leaders are eager to get their people back into a steady pace of work. They can’t wait to shake off the slowdown of summer and regain momentum toward meeting quarterly goals. And they might assume this feeling is mutual, and everyone is rested and revitalized after a break—a valid assumption, since vacations are strongly correlated to more-productive and engaged employees. But the summer months trend slower for most sectors of the workforce. Therefore, the way managers lead in fall should be more nuanced. They should help their teams ramp up responsibly, and avoiding burnout should be a top priority.

Hawley Kane, SHRM-SCP, vice president of organizational development at 2KEYS in Ottawa, Ontario, Canada, knows that September is a heavy month for her staff. “Not only are kids starting the school year, but it is typically a kick-start back to work. Things really slow down in the summer, and September is like the green light to overwork,” she said.

Kane cautions that too often, leaders overlook how much a shift at home is competing with the re-establishment of routines at work. She suggests that September is the perfect time to check in with employees. “We need to understand not only how our people are tracking toward quarterly goals, but [how] other events are influencing their lives,” she said. “Building an open and trusting relationship through regular check-ins increases employee commitment, engagement and trust.”

Leveraging Hope to Retain Unhappy Staff

Fall is also when employees re-evaluate their careers. If workers are slow to adjust after the holidays, it might mean they aren’t happy at work. If they dread coming in to work on Mondays, the dread will increase after a longer holiday break. Leaders can use this time as an opportunity to connect on a personal level with all staff and see how they want to make the rest of this year successful.

When we connect hope with organizational goals and design collaborative plans to achieve them, it can increase motivation for anyone who may be lacking it, wrote Charles Snyder, formerly the Wright Distinguished Professor of Clinical Psychology at the University of Kansas and editor of the Journal of Social and Clinical Psychology. He is globally recognized for his work related to hope and goal attainment. In September, managers can leverage Snyder’s hope theory in these ways:

  • Ask staff to create one-month and one-year goals.
  • Gather the team and discuss ways that individuals can offer their support and expertise to their peers.
  • Check back in monthly so co-workers can share their successes and barriers and get advice on how to overcome challenges as they advance toward their goals.

The Need for Flexibility in the Fall

Although developing year-round, flexible scheduling options for employees is a valued and worthwhile policy, ensuring that these perks are in place during busy times of the year can make or break employee engagement. Jeff Finley, total rewards manager at 3M Canada in London, Ontario, understands that the back-to-school time frame is particularly busy. He also realizes that working parents are juggling their increasingly busy lifestyles and require consistent support. Finley notes that 3M implemented several programs to help employees accommodate their family and personal commitments all year.

“Our FlexAbility program empowers employees to work with their supervisors to accommodate flexing their workday,” he said. “If a parent needs to leave work early for school or child care pickup, that employee has the ability to start their workday earlier or work from home in the evening.”

Vanessa Buote, social psychologist and research ethics advisor at the University of Waterloo in Ontario, emphasizes in her research that flexibility is particularly important for working parents. She found that parents who had children at home and experienced greater workplace flexibility often felt the following:

  • More satisfied with their job.
  • Less anxious about their job.
  • Less apt to see work/life balance as a cause of stress.
  • More grateful at work.
  • More resilient.

One of the biggest benefits of workplace flexibility may be increased job satisfaction, as research links high job satisfaction to engagement, loyalty, productivity, lower employee turnover and profitability. To achieve increased well-being and job satisfaction for working parents, Buote suggests implementing policies that include flexible starting and stopping times, job sharing, reduced hours, compressed hours and working from home, to name a few. Most importantly, as managers help workers juggle work and family life, they need to talk to their employees about their individual scheduling needs.

“Among parents, those who valued flexibility at work were less likely to see the work/life balance as a source of stress—possibly because they were actually able to better manage their work and home life,” according to Buote. “Given the negative implications of workplace stress—it’s been associated with poorer health, fatigue, absenteeism—employers should be actively looking for ways to reduce stress and inspire flourishing among employees.”

Encourage Better Sleep and Stir Creativity

Sleep patterns are vastly different in the summer, especially during vacations. Research shows that the first few weeks at work after taking a vacation may be more tiring than others, since brains atrophy slightly when they aren’t stimulated and may not be as responsive in those first days after summer holidays. At work, this increases the potential for decreased problem-solving abilities and dulled creative and innovative thinking.

To stimulate healthy brain activity, try an inexpensive but remarkably useful creativity exercise: doodling. Sunni Brown, a best-selling author and consultant in Austin, Texas, is globally recognized for her insights on doodling. Her TED Talk has 1.4 million views and growing. “Because doodling is surprisingly multifaceted, you can use it to either awaken the mind—stimulating insight, imagination and creativity—or to soften the mind, summoning a state of focused and relaxed attention,” she said.

Try dropping off sketch pads and coloring pencils at your employees’ desks. Neuroscientists claim that doodling can help people focus, ease impatience, vent emotions, revise ideas and even generate bursts of insight or new ideas. Researchers claim doodling helps the brain remain active by engaging its “default networks,” regions that maintain a baseline of activity in the cerebral cortex when outside stimuli are absent. According to one study in the journal of Applied Cognitive Psychology, people who were encouraged to doodle while listening to a list of people’s names were able to remember 29 percent more of the information later on a surprise quiz.

Work/Life Integration vs. Work/Life Balance All Year

Finally, to make the return to work less stressful after any holiday, reduce the mental contrast between personal and professional time. September doesn’t need to be all work and no play. Scott Kramer, SHRM-SCP, chief talent officer at American Paradigm Schools in Philadelphia, believes that if you spend more time at work than at home, then your leaders should make the workplace a fun place to be. Kramer kicks off September with staff meet-and-greets, followed by talks from noted authors and company-provided meals. Focusing on boosting altruism, a key trait to happier workplace cultures, Kramer commits to giving back in the fall. “This year we gave out over 300 backpacks with supplies to students in need,” he says.

Kramer keeps enthusiasm for work as an ongoing ideology throughout the year. On the first Friday of every month, staff participate in an entertaining, team-building game, such as an office scavenger hunt with free lunch and prizes. Half days off allow staff to attend continuing-education courses and keep their certifications active.

Kramer says that efforts by the leadership team are paying off. “Our turnover rate is extremely low, and 50 percent of new hires came from employee referrals, which speaks volumes, and 80 percent of people who leave want to come back to APS.”

To help “Stresstember” become “Bestember,” strive to make work and life less about balance and more about integration. Since people will spend 115,000 hours of their lifetime at work, and their brains don’t bifurcate the stress between work and life, it’s paramount that work be a place where employees can be challenged but have fun.

Jennifer Moss is author of Unlocking Happiness at Work (Kogan Page, 2016) and co-founder of Plasticity Labs, a Waterloo, Ontario, Canada-based research and consulting company that focuses on organizational culture.

Misclassifying Workers as Independent Contractors Doesn’t Violate NLRA

​The National Labor Relations Board (NLRB) decided on Aug. 29 that an employer’s misclassification of its employees as independent contractors does not violate the National Labor Relations Act (NLRA).

The charging party had maintained that misclassification interferes with employees’ exercise of their NLRA rights because the employer effectively conveys that misclassified employees don’t have protections under the act. But the board held that erroneously communicating to workers that they are independent contactors does not constitute a threat of reprisal. By contrast, the board has found that an employer violated the act by invoking misclassification to expressly prohibit employees from engaging in NLRA-protected activity or to indicate that engaging in union activities would be futile.

Independent-contractor determinations are difficult and complicated, the board noted. “In classifying its workers as independent contractors, an employer may be correct under certain other laws but wrong under the act—which is all the more reason why it would be unfair to hold that merely communicating that classification is unlawful,” the NLRB stated. The NLRB added that had it ruled that misclassification by itself violates the NLRA, the board would have significantly chilled the creation of independent-contractor relationships.

In dissent, board member Lauren McFerran, said, “When an employer misclassifies its employees as independent contractors and informs them of that status, not least by making them sign a binding agreement, the chilling effect on labor-law rights is undeniable. We should recognize that effect and redress it, not ignore it in the misguided view that the NLRA cares more about empowering employers than about protecting employees.”

We’ve gathered articles on independent contractors from SHRM Online and other trusted media outlets.

Board Misclassification Battles Reduced

The decision removes the board from future legal disputes solely about misclassification, a major issue in the gig economy. This case, Velox Express Inc., attracted much public interest, with 28 outside parties submitting 13 briefs. It was one of the few instances when the NLRB under the Trump administration asked the public to file briefs on a major pending issue. Employer advocates argued that misclassification alone shouldn’t be unlawful under the NLRA because it would interfere with the use of independent contractors and penalize employers for honest mistakes.


[SHRM members-only toolkit: Employing Independent Contractors]

NLRB Finds that Uber Drivers Are Contractors

The NLRB’s general counsel determined in a May memorandum that Uber drivers are independent contractors, not employees, making unionization harder for drivers. Uber’s labor costs probably would have risen 20 percent to 30 percent if their drivers had been considered to be employees, industry experts said.

(SHRM Online)

DOL Determines that Drivers for Ride-Hailing Services Aren’t Employees

At least some gig-economy workers who find jobs through smartphone apps—such as drivers for ride-hailing services—are not covered by the federal Fair Labor Standards Act, according to an opinion letter issued earlier this year by the U.S. Department of Labor (DOL). “An employee, as distinguished from a person who is engaged in business for himself or herself, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent upon the business to which he or she renders service,” the DOL said. The DOL concluded that the workers who use a technology platform to connect with consumers are independent contractors rather than employees of the platform provider.

(SHRM Online)

Bill Would Make It Harder to Classify Workers as Independent Contractors

The U.S. House of Representatives is considering a controversial bill that would amend the NLRA to make it harder to classify workers as independent contractors and establish stricter penalties for employers that violate workers’ rights. The bill, called the Protecting the Right to Organize (PRO) Act, would adopt a test similar to that used in California to determine if workers should be classified as independent contractors or employees.

(SHRM Online)

How to Use Social Media to Share Your Vacation

Author: PeopleFinders on August 29th, 2019

Spread the love

When you go on vacation, it’s only natural that you’ll want to share the experience with your friends and family. Social media provides a great way to do that. You can post photos, tell people what’s happening, and share every detail with the people you love the most. However, you need to be careful when doing so.

Sharing too much information on social media is a bad decision at any time. But when you share vacation photos and stories, you’re more likely to let out too much information. You can enjoy giving information on your adventures via social media, but make sure you be careful when you do it.

When you go on vacation:

  • Don’t geotag yourself
  • Consider making your social media account private
  • Don’t let people know your house will be empty
  • Verify your info after you get home

Don’t Geotag Yourself

Geotagging allows you to put your exact location in a post. Usually, that means choosing a public establishment nearby and adding it to the picture of the status update. It can be an interesting little addition to a photo. But the privacy concerns associated with it can be too significant to make it worth your while.

Usually, geotagging only works when you post the photo; you can’t generally geotag a photo that you post hours after getting home. Thus, when you post it, anyone who sees the geotag knows where you are at that exact moment. It’s not worth it, especially if you’re miles away from home and sharing it with the public.

Check Your Privacy Settings

Speaking of sharing things with the public…it’s generally a bad idea! Even public figures need to make sure they’re not giving too much away. And as a regular person on vacation somewhere fun, that’s even more significant.

If you’re going to post vacation photos, especially while you’re actually on vacation, you need to make sure you’re only sharing them with friends and family. Consider making your social media accounts private, at least while you’re on vacation. That way, only the people you trust will be able to see where you are and when.

Don’t Tell People Your Home Will Be Empty

No matter how long you’re going to leave your home empty, you shouldn’t broadcast it to the world. Thieves are always on the lookout for an empty home, because it means they’re less likely to run into trouble when trying to break in and take things. If you tell too many people that you’ll be out of the house for a week or two, you’re asking for trouble.

There are a few ways to avoid this. Especially if you’re only going to be gone for a day or two, don’t mention your vacation until you’ve returned home. That way, nobody will know that your home was vacant until it isn’t anymore. You can also install security cameras to catch any suspicious behavior. Lastly, consider asking or hiring someone to housesit for you while you’re gone so that the house isn’t vacant.

Check That You Haven’t Accidentally Let Anything Leak

Once you get back home, you’re probably going to be reveling in the post-vacation warmth for some time. Before you do that, though, it’s important to check that all is still well with your information. To try and do that, you can use PeopleFinders.

With PeopleFinders, you can try to find out what information is available about you online. The process is simple: perform a people search on yourself. When you do that, you may be able to access a full list of your public records information, possibly including your contact info, friends and relatives, and even your social media profiles and pictures. If you see things that you didn’t mean to let leak, do a bit of digging into your social media profiles to see if you may need to delete some information.


Going on a vacation is the perfect way to relax. It’s an escape from everyday life, and that escape can be fun to share on social media. However, it’s important to make sure you stay safe when you’re doing it.

Once you get home from your trip, even if you’ve been as careful as possible, use PeopleFinders to try and be sure. Plus, you can check the PeopleFinders blog to get more ideas for how to use PeopleFinders and otherwise be safer in your everyday life.

Image attribution: SasinParaksa –

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Employers Should Plan Now for New Federal Overtime Rule

The U.S. Department of Labor (DOL) is expected to set a new salary threshold soon for the white-collar exemptions to overtime pay under the Fair Labor Standards Act (FLSA)—but employers should start planning for changes now.

The DOL might not give employers more than three or four months between the announcement of the final rule and its effective date to comply, noted Tammy McCutchen, an attorney with Littler in Washington, D.C. But she said employers shouldn’t fret about the short compliance window.

“We’ve been through this before,” she said, referring to the steps employers took to prepare for the 2016 Obama-era rule that was blocked shortly before its effective date.

The 2016 rule would have raised the salary threshold for white-collar exemptions to overtime pay from the current $23,660 to about $47,500—whereas the new proposal, if finalized, would set a $35,308 cutoff.

President Donald Trump’s administration wants to get a new rule in place as soon as possible in case there’s a political shift after the 2020 presidential election, McCutchen noted. If Democrats take control of the White House before the new rate is effective and safe from challenge under the Congressional Review Act, they would likely propose a cutoff similar to the Obama administration’s higher threshold.

Evaluate Potentially Affected Workers

Employers should immediately pull data for exempt workers earning close to the proposed cutoff, attorneys said.

Though the exact figure of the new threshold and its effective date are still under wraps, employers should evaluate their 2020 pay structure for any exempt-classified employees earning less than the proposed threshold, said Caroline Brown, an attorney with Fisher Phillips in Atlanta. They may want to review salaries that are now slightly higher in case the final threshold is adjusted up from the proposed rule, she noted.

McCutchen added that employers might want to review data also for exempt workers earning $37,000 or less.

Employers should note that under the proposed rule, nondiscretionary bonuses and incentive payments, including commissions, paid annually or more frequently may be used to satisfy up to 10 percent of the standard salary level, though the percentage could be adjusted under the final rule.

“Review your budgets, consider what positions you might restructure, flag whom you might reclassify to nonexempt or give a salary increase, and think about when, practically speaking, you should implement changes,” Brown said.

Román D. Hernández, an attorney with Troutman Sanders in Portland, Ore., said employers should forecast financial ramifications for changes in labor costs necessitated by changes in the rules.

Employers also should weigh the cost of raising employee salaries above the new threshold against the cost of reclassifying employees as nonexempt and paying overtime, he said. “That is an individual workforce determination that should be made in consultation with HR professionals and outside counsel to ensure compliance with the new rules.”

Review Job Descriptions

Meeting the salary cutoff is just one requirement for classifying workers as exempt. Employers should also take the time to review workers’ job duties to ensure they satisfy the applicable exemption’s criteria.

The FLSA’s so-called white-collar exemptions—the executive, administrative and professional exemptions—each have slightly different duties tests:

  • Executive exemption. The employee’s primary duty must be managing the enterprise or a department or subdivision of the enterprise. The employee must customarily and regularly direct the work of at least two employees and have the authority to hire or fire workers (or the employee’s suggestions and recommendations as to hiring, firing or changing the status of other employees must be given particular weight).
  • Administrative exemption. The employee’s primary duty must be office or nonmanual work that is directly related to the management or general business operations of the employer or the employer’s customers. The employee’s primary duty also must include the exercise of discretion and independent judgment with respect to matters of significance.
  • Professional exemption. The employee’s primary duty must be work requiring advanced knowledge in a field of science or learning that is customarily acquired by prolonged, specialized, intellectual instruction and study.

Although the proposed changes to the overtime rule are all about salary, the upcoming changes provide a good opportunity for employers to look at the job duties for their lowest exempt pay bands and make sure they actually qualify, McCutchen said. “It’s a great time to correct errors on the job-duties side.”

[SHRM members-only toolkit: Determining Overtime Eligibility in the United States]

Hernández noted that it’s always a good idea for employers to periodically review job descriptions and ensure that they are up-to-date and accurate.

Develop a Training and Communication Strategy

If employers decide to reclassify employees to nonexempt status, they will need to track affected workers’ work time and pay overtime premiums for all hours worked beyond 40 in a workweek.

Employers will need to develop a communication strategy and make sure that reclassified employees know they are not being demoted, McCutchen said. Be clear that these changes are based on new government rules.

In addition, employees who will be required to track their hours for the first time—as well as their managers—will need training on time-keeping procedures, she added.

Employers should evaluate their systems for time-keeping, tracking overtime and paying bonuses, Hernández said. They should also develop plans and procedures to manage or limit overtime hours worked by newly nonexempt workers, he suggested.

Brown noted that taking some initial steps sooner rather than later can go a long way toward triaging potential issues and creating a smoother transition plan.

Visit SHRM’s resource page on FLSA exemption classification.

McDonald’s to Roll Out Training to Prevent Harassment, Bullying

​Beginning in October, McDonald’s will train its restaurant supervisors and crews to diffuse potential violence and guard against bullying and harassing behavior and unconscious bias, the company announced Aug. 28.

The training on how to create a safe, respectful environment will combine interactive and computer-based programs and in-person discussions on topics such as bystander intervention, how to safely intercede when difficult situations arise, and how to report complaints of harassment, discrimination and retaliation.

The aim, the company said, is to educate and empower the approximately 850,000 people working at its restaurants and build on training it launched in the fall of 2018.

The Equal Employment Opportunity Commission (EEOC) has recommended employers use civility and bystander-intervention training to prevent harassment, instead of overly focusing on compliance and legal liability.

“There is a deeply important conversation around safe and respectful workplaces in communities throughout the U.S. and around the world,” said Chris Kempczinski, president of McDonald’s USA, in the news announcement. “Together with our franchisees, we have a responsibility to take action on this issue and are committed to promoting positive change. These actions are one more step we are taking to raise awareness at all levels of McDonald’s that will transfer both inside and outside the workplace.”

[SHRM members-only policy: Sexual Harassment Policy and Complaint/Investigation Procedure]

In May, McDonald’s was hit with 23 new gender-based discrimination and sexual harassment complaints. Complaints included allegations of inappropriate touching, indecent exposure, lewd comments and requests for sex, as well as retaliation for reporting such conduct. The incidents are alleged to have occurred at corporate and franchise stores in 20 cities, according to NPR. It was the third time in three years that the fast-food franchise faced allegations “of rampant sexual harassment of female employees by male co-workers and managers.”

In September 2018, workers engaged in a one-day walkout at restaurants around the U.S. “to send a message to the fast food giant that an atmosphere of sexual harassment will not be tolerated,” Forbes reported.

SHRM Online has collected the following articles and resourcs about this topic from its archives and other sources.  

McDonald’s to Start New Worker Training Program Following Criticism Over Workplace Safety Issues 

McDonald’s will roll out training materials, developed in partnership with sexual violence prevention organization RAINN, for all its U.S. stores in October.

The announcement comes after months of criticism of McDonald’s by its restaurant workers, who say they have experienced violence, sexual harassment and other workplace issues at both corporate and franchise locations. In May, workers’ rights organizations and the Time’s Up Legal Defense Fund said a number of sexual harassment charges and lawsuits had been filed against the fast food chain, and workers hosted a protest in Chicago over the issue.

Workplace-Harassment Prevention Resources 

The fight to end bullying and sexual harassment has changed the work environment. To help HR foster workplace cultures that do not tolerate harassment, the Society for Human Resource Management has created a resource center with news, insights, sample policies, training and more. 
(SHRM Online)   

Beyond Harassment 101: Opening Culture-Change Discussions with Your Team 

Sexual harassment remains a problem in many workplaces despite years of mandatory training for supervisors to prevent it. Getting in front of the problem in the truest sense requires raising accountability and an awareness of inclusion and respect in the workplace. 
(SHRM Online)   

Checklists for Employers 

The EEOC has a number of resources available to employers for creating a safe and respectful workplace. The first step in a prevention program is for an organization’s leadership to establish a culture in which harassment is not tolerated. Check the box if the leadership of your organization has taken the following steps. 

Survey: Half of HR Pros’ Workplaces Experienced Violence 

New data from the Society for Human Resource Management demonstrates the need for more education, training to prevent workplace violence. 
(SHRM Online)  

Viewpoint: It’s Time to Stamp Out Sexual Harassment in Restaurants    

More sexual harassment claims are filed in the restaurant industry than any other. Overall, the figures make for disturbing reading. Reports suggest that up to 90 percent of women and 70 percent of men experience some form of sexual harassment from managers, co-workers, vendors and customers in restaurants. 
(Modern Restaurant Management)

EEOC Sues Hitachi for Disability Discrimination

Monroe Facility Denied Assembly Operator Reasonable Accommodations and Fired Her, Federal Agency Charges

ATLANTA – Hitachi Automotive Systems Americas, Inc., a global supplier of automotive parts, has been sued by the U.S. Equal Employment Opportunity Commission (EEOC) for failing to accommodate an employee’s disability and firing her because of it,
the federal agency announced today.

According to the EEOC’s lawsuit, Misti Huff King, an assembly operator at Hitachi’s Monroe, Ga., facility, had a medical condition which required her to take frequent restroom breaks. After receiving a positive evaluation and successfully
completing her probationary period, Hitachi extended an offer of permanent employment to King. During the screening process, King requested a reasonable accommodation – that she be allowed to take additional restroom breaks beyond her lunch break
and scheduled 15-minute break. Instead of granting King’s request, Hitachi determined she was unable to perform the job and rescinded its permanent job offer.

Such conduct violates the Americans with Disabilities Act (ADA), which prohibits employers from making employment decisions based on an employee’s disability unless it would impose an undue hardship. After first attempting to reach a
pre-litigation resolution through its conciliation process, the EEOC filed suit in the U.S. District Court for the Northern District of Georgia, Atlanta Division (Civil Action No. 1:19-CV-3887-MLB-JKL). The EEOC is seeking monetary relief for King
and injunctive relief prohibiting Hitachi from engaging in similar conduct in the future.

“Employers must accept their legal responsibility to evaluate each employee’s situation without bias and unfounded assumptions,” said Antonette Sewell, regional attorney for the EEOC’s Atlanta District office. “When they fail to do so, their
employment decisions fly in the face of federal law. The EEOC is committed to seeking relief for workers who are harmed by such discriminatory practices.”

Darrell Graham, district director of the Atlanta office, added, “Hitachi’s decision to rescind its job offer was unlawful, especially in light of Ms. King’s demonstrated ability to perform the essential functions of the job. The company could
have accommodated her request to take additional restroom breaks, but instead, dug in its heels and deprived Ms. King of her livelihood without good cause. When that happens, the EEOC will step in.”

The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination. More information is available at Stay connected with the latest EEOC news by
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Tallahassee Memorial Hospital to Pay $375,000 to Settle EEOC Disability Discrimination Suit

Hospital Refused to Provide Leave Time as a Reasonable Accommodation to a Class of Employees, Federal Agency Charged

TALLAHASSEE, Fla. – Tallahassee Memorial Healthcare, Inc., a private community healthcare system comprised of 2 hospitals, multiple specialty care centers, three residency programs, and 32 affiliated physician practices, will pay $375,000 to a
class of employees and furnish other relief to settle a disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the federal agency announced today.

The EEOC charged in its lawsuit that Tallahassee Memorial violated federal law by maintaining an inflexible 12-week maximum leave policy. The EEOC also alleged that when employees with disabilities requested additional leave beyond the Family
Medical Leave Act (FMLA), Tallahassee Memorial denied the requests, rather than engaging in an interactive process with each individual to determine if he or she could be accommodated.

Such alleged conduct violates the Americans With Disabilities Act (ADA), which prohibits employers from refusing to provide reasonable accommodations to employees with disabilities. The EEOC filed its suit (Civil Action No. 4:19-cv-00417-MW-CAS)
in U.S. District Court for the Northern District of Florida in Tallahassee after first attempting to reach a pre-litigation settlement through its conciliation process.

In addition to the $375,000 in monetary relief, the consent decree settling the lawsuit provides for extensive injunctive relief to help secure a workplace free from disability discrimination. This includes Tallahassee Memorial appointing a
trained ADA Coordinator that will make all decisions concerning requests for reasonable accommodations, conducting mandatory training for human resources personnel, managers and employees, and reporting of all requests for reasonable accommodations
denied by Tallahassee Memorial to the EEOC. In addition, Tallahassee Memorial has changed its leave policy such that it will determine on an individualized basis whether employees with disabilities can be accommodated by additional leave beyond the

Evangeline Hawthorne, director of the EEOC’s Tampa Field Office, said, “The ADA requires employers to assess each employee’s request for an accommodation on an individualized basis, rather than having blanket policies that apply across the

Robert Weisberg, regional attorney for the EEOC’s Miami District added, “We are pleased that Tallahassee Memorial worked with us to craft a positive resolution that not only compensates the class for their losses, but also provides for policy
changes designed to protect current and future employees from disability discrimination.”

The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination. More information is available at Stay connected with the latest EEOC news by
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Nix Hospital Settles EEOC Pregnancy Discrimination Suit

Hospital Refused to Accommodate and Terminated Pregnant Worker, Federal Agency Said

SAN ANTONIO, Texas – Nix Hospitals System, LLC, doing business as Nix Healthcare System, a provider of comprehensive medical services, including a full-service hospital and various medical facilities in San Antonio, has agreed to pay $40,000 to
settle a pregnancy discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission, the agency announced today.

The EEOC’s lawsuit alleged that Nix Hospital violated Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act of 1978 (PDA), by refusing to accommodate the employee’s pregnancy-related medical restrictions,
resulting in her termination. According to the EEOC, the employee applied for two open desk positions which would have allowed her to work even with her medical restrictions, but Nix Hospital denied her such light-duty positions. Meanwhile,
non-pregnant employees injured on the job with medical restrictions were granted light duty.

The Pregnancy Discrimination Act (PDA), which is incorporated into Title VII of the Civil Rights Act of 1964, makes discrimination based on pregnancy a form of sex discrimination. Under the PDA, employers are prohibited from engaging in
discrimination on the basis of pregnancy, including when employers refuse to accommodate a worker’s pregnancy-related medical conditions but do accommodate other workers similar in their ability or inability to work. The EEOC filed suit in U.S.
District Court for the Western District of Texas, San Antonio Division (EEOC v. Nix Hospitals System, LLC d/b/a Nix Healthcare System, Civil Action Number 5:18-cv-01004) after first attempting to reach a pre-litigation settlement through its
conciliation process.

In addition to monetary recovery by the employee, the decree resolving this case and approved by U.S. District Judge Xavier Rodriguez requires the hospital to post a notice of intent to comply with Title VII and to provide training to employees
of their rights under federal law. The consent decree also requires the hospital to revise its policy to ensure that it prohibits pregnancy discrimination including the accommodation of pregnancy-related conditions.

“We are pleased that this employer agreed to provide additional training for its human resources staff on sex and pregnancy discrimination,” said Trial Attorney Philip Moss of the EEOC’s San Antonio Field Office. “Nix will also revise its
employment policies to better reflect the rights of employees who are pregnant.”

EEOC Supervisory Trial Attorney Eduardo Juarez added, “A woman should not have to choose between her pregnancy and her job. Employers should not refuse to accommodate pregnant workers based on considerations of cost or convenience when they
accommodate other workers who are similar in their ability to work.”

The San Antonio Field Office is part of the EEOC’s Dallas District Office, which is responsible for processing charges of discrimination, administrative enforcement and the conduct of agency litigation in Texas and parts of New Mexico.

The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination. More information is available at  Stay connected with the latest EEOC news by
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Persian Room Fine Dining Sued by EEOC for Sexual Harassment Discrimination and Retaliation

Owner Fired Employee Who Rebuffed His Advances and Complained, Federal Agency Charges

PHOENIX, Ariz. – Rainbow Tree LLC, doing business as Persian Room Fine Dining in Phoenix and Tucson, Ariz., violated federal law when its owner repeatedly made sexual advances to an employee and then punished her for complaining and fired her,
the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed today.

According to the EEOC’s lawsuit, a manager and part owner of Persian Room sexually harassed Samantha Labrado by making repeated sexual advances during a catering trip for an event at the Tucson Persian Room. Labrado rejected the advances. Five
days after her return to Phoenix, Labrado was disciplined for tardiness, despite having been given permission to come in late, and her weekly work shifts were reduced from five to one. When Labrado complained about the sexual harassment, the manager
/ owner fired her.

Such alleged conduct violates Title VII of the Civil Rights Act of 1964 which prohibits discrimination on the basis of sex as well as retaliation for opposing illegal workplace conduct. The EEOC filed suit, EEOC v Rainbow Tree LLC d/b/a Persian
Room Fine Dining, Civil Action No. 2:19-cv-05047-JAT, in U.S. District Court for the District of Arizona after first attempting to reach a settlement through its pre-litigation conciliation process. The lawsuit seeks back pay, compensatory damages
and punitive damages for the discrimination victim as well as appropriate injunctive relief to prevent discriminatory practices in the future.

 “As the Report from the EEOC’s Select Task Force on the Study of Harassment in the Workplace describes, harassment is particularly common when there are
significant power disparities in the workforce,” said EEOC Phoenix District Office Regional Attorney Mary Jo O’Neill. “Too often, owners and ‘high-value’ employees believe that the laws governing the workplace do not apply to them. The EEOC will
always fight to protect employees, regardless of the status of the employee, manager or owner harassing them.”

Elizabeth Cadle, district director of EEOC’s Phoenix District Office, added, “Sexual harassment and retaliation for opposing sexual harassment are still far too common. Research shows that the cost of harassment and retaliation is incredibly
high, as businesses lose valuable employees and productive workplaces when they condone discrimination.”

The EEOC’s Phoenix District Office has jurisdiction for Arizona, Colorado, Utah, Wyoming and part of New Mexico (including Albuquerque).

The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination. More information is available at Stay connected with the latest EEOC news by
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