Employers are increasingly turning to artificial intelligence (“AI”) for assistance in making employment decisions, and although AI can eliminate disparate treatment, employers should be aware of the potential for disparate impact. Title VII of the Civil Rights Act of 1964 (“Title VII”) prohibits discrimination on the basis of race, color, religion, sex (including pregnancy, sexual orientation, and gender identity), or national origin in employment practices (recruiting, hiring, monitoring, transferring, evaluating, terminating).
While New York City is the only jurisdiction that regulates the use of AI in employment decisions, there is EEOC guidance on the use of AI in the workplace and as a result of President Biden’s October 30, Executive Order we expect the Secretary of Labor to issue best practices around the use of AI in employment decisions soon.
New York City
New York City Local Law 144 regulates the use of automated employment decision tools. Automated employment decisions tools are “any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons.”
Under Local Law 144 employers or employment agencies that use an automated employment decision tool to screen a candidate or employee for an employment decision must: Continue reading →
Title VII plaintiffs in the Fifth Circuit are no longer required plead disparate treatment in an ultimate employment decision.
In Hamilton v. Dallas County, the en banc court overturned decades of precedent and articulated a new employee-friendly rule for Title VII disparate treatment claims—“a plaintiff plausibly alleges a disparate treatment claim under Title VII if she pleads discrimination in hiring, firing, compensation, or the ‘terms, conditions, or privileges’ of her employment.”
The Standard Articulated by the Hamilton Court
“To adequately plead an adverse employment action, plaintiffs need not allege discrimination with respect to an ‘ultimate employment decision.’ Instead, a plaintiff need only show that she was discriminated against, because of a protected characteristic, with respect to hiring, firing, compensation, or the ‘terms, conditions, or privileges of employment’—just as the statute says.”
“The days and hours that one works are quintessential ‘terms and conditions’ of one’s employment”
“We thus leave for another day the precise level of minimum workplace harm a plaintiff must allege on top of showing discrimination in one’s ‘terms, conditions, or privileges of employment.’”
The Dallas County Sheriff’s Department (“Department”) gives its detention officers two days off each week. Prior to 2019, detention officers’ days off were determined by seniority. In 2019, the Department eliminated the seniority system and days off were determined by sex—only men were allowed to take off Saturday and Sunday. Women could not elect to have both of their days off on the weekend.
Nine female detention officers sued the Department, alleging that the sex-based scheduling policy violated Title VII’s prohibition against sex discrimination. The trial court granted the County’s motion to dismiss, reasoning that the scheduling policy was not an “ultimate employment decision.” Under Fifth Circuit precedent, alleged conduct violated Title VII if it was an “ultimate employment decision” such as hiring, granting leave, discharging, promoting, and compensating. The Fifth Circuit panel affirmed the trial court’s dismissal, noting that this case was the “ideal vehicle” for an en banc court to align the Circuit’s precedent with the meaning of Title VII’s text. The Fifth Circuit panel explained that “[s]urely allowing men to have full weekends off, but not women, on the basis of sex rather than a neutral factor like merit or seniority, constitutes discrimination with respect to the terms or conditions of those women’s employment.”
We are mid-way through 2023, and there have been several changes to the employment laws in the District of Columbia, Maryland, and Virginia that employers need to take note of. All of these laws, which were passed in 2022 or the more recent 2023 legislative sessions, went into effect on July 1, 2023, including amendments to minimum wage laws, leave laws, marijuana laws, and laws related to nondisclosure, confidentiality, and non-disparagement agreements. Below is an overview of some of the key changes that employers need to carefully analyze to ensure existing employment policies and practices are up to date.
District of Columbia
Minimum Wage Hike. Beginning on July 1, 2023, DC minimum wage increased from $16.50 per hour to $17 per hour. Tipped workers will see their base wage increase from $6 per hour to $8 per hour, and if their tips don’t bring their total hourly earnings up to $17 per hour overall, their employer needs to make up the difference.
Recreational Cannabis Use Protection in Effect. Under the DC Cannabis Employment Protections Amendment Act of 2022, which went into effect on July 1, 2023, employers cannot take any adverse action against an employee because of the employee’s recreational cannabis use, participation in D.C. or another state’s medical cannabis program, or failure to pass an employer-required or requested cannabis drug test. In simple terms, employers are prohibited from terminating, suspending, demoting, refusing to hire, failing to promote, or otherwise penalizing an employee for cannabis use, but there are two notable exceptions: Continue reading →
Last week the Illinois General Assembly sent Governor Pritzker HB3129, a pay transparency amendment to the Equal Pay Act. If signed, HB3129 would require employers with 15 or more employees to include the pay scale and benefits for a position in any specific job posting.
The Act, as written and enforced now makes it unlawful for an employer in the state of Illinois with one or more employees to:
discriminate against employees on the basis of race or sex when determining employee wage rates;
seek the wage or salary history, including benefits and other compensation, of a job applicant from their current or former employer; and
retaliate against an employee who exercises their rights under the Act.
The amendment does not specify whether all 15 employees must work in the state of Illinois or whether the employer must have 15 or more employees corporate wide for the amendment to apply.
The amendment does however provide that the posting requirements apply to positions that will be physically performed, at least in part, in the state of Illinois. If the job will be performed outside the state of Illinois, but the employee will report to a supervisor, office, or other work site in the state of Illinois the amendment similarly applies.
The “pay scale and benefit” information that must be included in the specific job posting includes the wage or salary, or the wage or salary range. Additionally, the posting must include a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position. Continue reading →
The Pregnant Workers Fairness Act (“PWFA”) was signed by President Biden on December 29, 2022, and takes effect on June 27, 2023. The PWFA requires covered employers to provide a reasonable accommodation to the known limitations of a qualified employee related to pregnancy, childbirth, or related medical conditions unless the accommodation would pose an undue hardship on the operation of the business.
Below is a summary of the PWFA.
Who is a covered employer?
A covered employer is an employer with at least 15 employees. Employers may look to EEOC regulations related to Title VII and how courts interpret employers under Title VII for purposes of determining coverage as the PWFA explicitly references the Title VII definition of employer.
What does the PWFA require?
Under Title VII employers cannot discriminate against an employee based on pregnancy, childbirth, or related medical conditions. Likewise, employers covered by Title VII must treat an employee affected by pregnancy, childbirth, or related medical conditions the same as other workers with similar abilities or an inability to work.
The legal landscape facing employers seems as difficult to navigate as it has ever been. Keeping track of the ever-changing patchwork of federal, state and local laws governing the workplace may often seem like a full-time job whether you are a human resources professional, in-house attorney or business owner. Change appears to be the one constant. As we enter Year 3 of President Biden’s Administration, employers will continue to closely track the changes taking place at the NLRB, the DOL and the EEOC. At the same time, a number of states will continue introducing new laws and regulations governing workplaces across the country, making it more important than ever for employers to pay attention to the bills pending in the legislatures of the states where they operate.
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Beginning June 1, 2023, the Virginia Consumer Data Protection Act (CDPA) will come into effect for Virginia businesses and consumers.
What is the CDPA?
At its core, the CDPA is a data privacy law intended to provide guardrails on how businesses use and store the data of Virginia consumers. Virginia was the second state to pass a state data privacy law after California’s California Consumer Privacy Act (CCPA).
The CDPA will apply to covered businesses that conduct business in Virginia or affect Virginia commerce through targeting products and/or services to Virginia residents. For the CDPA to apply to a company, it must either:
Control or process the personal data of at least 100,000 consumers during a calendar year; or
Process the personal data of at least 25,000 consumers and derive more than 50 percent of their gross revenue from selling personal data.
Personal data in this context includes “any information that is linked or reasonably linkable to an identified or identifiable natural person.”
What are the CDPA requirements?
The CDPA draws on concepts from the California Privacy Rights Act, CCPA, and the General Data Protection Regulation (GDPR) by establishing consumer rights relating to Privacy.
The main areas of the CDPA that businesses should prepare for are as follows:
On June 3, 2022, the full court of the U.S. Court of Appeals for the District of Columbia overturned long-standing precedent regarding the burden of proof a plaintiff must carry in pursuing a Title VII Claim. In Chambers v. District of Columbia (D.C. Cir. 2022), the D. C. Circuit held in a 9-3 en banc decision that when an employer transfers an employee or denies an employee’s request for a transfer because of the employee’s race, color, religion, sex, or national origin, the employer violates Title VII by discriminating against the employee in his or her “terms, conditions, or privileges” of employment. The court’s opinion overruled a nearly 24-year old precedent that held the denial or forced acceptance of a job transfer is actionable only if an employee suffers “objectively tangible harm.” See Brown v. Brody (D.C. Cir. 1999). The court’s decision could have sweeping effects on Title VII litigation throughout the country, as the diminished burden of proof is significantly more plaintiff-friendly and causes concern for employers when evaluating job transfers and potentially other employment actions.
The plaintiff worked in the Attorney General’s office in the District of Columbia for more than two decades as a clerk, Support Enforcement Specialist, and investigator. She requested several transfers to other units in the Attorney General’s office after complaining that she had a much larger caseload than her comparators. All of her transfer requests were denied, and she ultimately filed an EEOC charge and a lawsuit in 2014 alleging sex discrimination and retaliation.
The district court relied on Brown in granting the District of Columbia’s motion for summary judgement. On appeal, a three-judge panel of the D.C. Circuit upheld the district court’ ruling. However, two of the three judges highlighted that Title VII does not make any reference to “objectively tangible harm” and requested the full court to further review the matter.
The D.C. Circuit, in common with many other federal courts, has long imposed this tangible harm requirement articulated in Brown because of the view that Title VII is not a general “civility code” and that employees challenging discriminatory decisions should show more than de minimis harm lest courts be involved in supervising myriad routine business decisions. However, the en banc panel overruled Brown – holding that the refusal of a transfer request for one employee while granting similar requests to a similarly situated co-worker on the basis of a protected trait is discriminatory because it “deprives the employee of a job opportunity.”
AI refers to a “machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations or decisions influencing real or virtual environments.” It can feature in software used to complete tasks previously completed by human beings. Relevant to the discussion with Commissioner Sonderling, employers can use AI in most employment and/or hiring decisions, such as who to inform about a new position, who to interview, and who to select for a position.
When making those decisions, employers could suffer liability if they discriminate against an individual based on their race, color, religion, sex, national origin, age, pregnancy, disability status, or genetic information. Unlawful discrimination can occur two ways – disparate treatment and disparate impact. Disparate treatment occurs when individuals are intentionally discriminated against by an employer, whereas disparate impact refers to unintentional discrimination – where an employer’s neutral policies or procedures negatively impact individuals in a particular protected class.
Employers should be aware, as Commissioner Sonderling stressed in his remarks, that AI technologies are only as good as the data and training used to develop them. There have been numerous instances where employers who used AI tools to assist in employment and/or hiring decisions have been left with discriminatory results and potential disparate impact liability as a direct result of the technology.
Commissioner Sonderling offered some examples of ways that AI could unintentionally produce discriminatory results in employment decisions:
“R-E-S-P-E-C-T. Find out what it means to me.” More than half a century after Aretha Franklin first sang those lyrics, state legislatures, local municipalities, and Congress are passing the Creating a Respectful and Open Workplace for Natural Hair legislation (“CROWN Act”). Before the flurry of legislation aimed at protecting natural hair, some appellate courts already applied the protections of Title VII liberally. In Jenkins v. Blue Cross Mut. Hosp. Ins., the 7th Circuit held a plaintiff’s EEOC charge sufficiently alleged race discrimination where plaintiff’s EEOC charge stated plaintiff’s boss denied plaintiff a promotion because plaintiff “could never represent [defendant] with [an] Afro.” 538 F.2d 164, 168 (7th Cir. 1976). Other courts, however, took a narrower approach. In EEOC v. Catastrophe Mgmt. Solutions, the 11th Circuit reasoned “Title VII protects persons in covered categories with respect to their immutable characteristics, but not their cultural practice[,]” thereby upholding a race neutral grooming policy that prohibited dreadlocks. 852 F.3d 1018, 1028-34 (11th Cir. 2016). Indeed, as recently as 2018, the U.S. Armed Forces maintained grooming policies that prohibited natural or protective hairstyles commonly worn by Black servicemembers because the hairstyles were “unkempt.”
The CROWN Act
More than a dozen state legislatures already passed a variation of the CROWN Act Continue reading →