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This article was written by Allegra Lawrence-Hardy and Lisa Haldar and originally appeared in Law 360. In January, we mapped out 10 resolutions for employers to consider, from artificial intelligence policies to noncompete agreements.[1] Six months later, regulatory agencies have made moves in rulemaking to further their forecasted priorities. The U.S. Supreme Court has announced a unifying standard for claims of discrimination under Title VII of the Civil Rights Act, and courts around the country are continuing the legwork in interpreting the high court's previous clarification of the standard in religious accommodation cases. With these updates in mind, midyear is a good time to reflect on your progress, make adjustments and continue building any momentum you have gained in the last six months.
Below we discuss what we believe are the most significant updates affecting our 2024 resolutions. 1. Exercise caution with AI vendors. We suggested in January that employers regularly audit contracted services providing AI tools for potential bias or discriminatory effects in the algorithms used. In April, the U.S. District Court for the Northern District of California granted the U.S. Equal Employment Opportunity Commission leave to file an amicus brief on behalf of the plaintiff in an employment discrimination case against Workday Inc., with which thousands of companies contract to administer and disseminate algorithm-based applicant screening tools. The case remains pending. That employers that use Workday were spared — at least for now — from this lawsuit does not mean employers will be spared in the future. Only last year, the EEOC issued its technical guidance reminding employers they can be held responsible for actions of software vendors in "situations where an employer relies on the results of a selection procedure that an agent administers on its behalf."[2] If your company is relying on AI vendors for employment processes, make sure you are selecting your vendors with care and asking the right questions. 2. Take a beat before reducing diversity, equity and inclusion initiatives. At the beginning of the year, we discussed how the Supreme Court's 2023 ruling in Students for Fair Admissions v. President & Fellows of Harvard could affect employer DEI initiatives. Now, some critics are citing the high court's April 17 Muldrow v. St. Louis decision as further undermining DEI programs.[3] In Muldrow, the Supreme Court resolved inconsistencies among lower courts as to what level of harm gives rise to a claim of discrimination under Title VII, clarifying that an employee need only a showing of some harm.[4] Despite the arguments that this lower threshold should extend to suits challenging workplace DEI initiatives, Muldrow involved claims alleging acts of individual discrimination, which most well-designed DEI initiatives already work to avoid. Robust DEI programs do more than focus on hiring or promoting more members of historically marginalized groups: They seek meaningful approaches to removing barriers for people of all backgrounds to join and remain in the workforce through programs like pipeline recruiting, education initiatives, community outreach and more comprehensive employee benefits packages. Not to mention, recent cases have demonstrated that scaling back or abandoning DEI efforts can carry significant litigation risks associated with discrimination claims brought by members of traditionally underrepresented groups.[5] Thus, rather than viewing Muldrow as a reason to scale back DEI initiatives, employers may be better served viewing Muldrow as a reason to ensure that their anti-discrimination controls also extend to policies for transfers or other lateral personnel actions — which was the adverse action at issue in Muldrow. 3. Monitor case law interpreting the Groff v. DeJoy undue burden showing. Roughly a year has passed since the Supreme Court, in Groff v. DeJoy, clarified that an employee's religious accommodation must result in "substantial increased costs in relation to the conduct of its particular business" to be considered an undue burden.[6] A handful of district court decisions interpreting Groff in the first half of this year may provide employers some reassurance that Groff is not necessarily the coup de grâce for the undue hardship argument. For example, on April 30, the U.S. District Court for the Southern Indiana found a religious accommodation in Kluge v. Brownsburg Community School Corp. that would expose an employer to liability was still an undue burden under Groff.[7] On March 5, the U.S. District Court for the District of Oregon found in Waggoner v. American Medical Response Northwest Inc. that because the employer's accommodation eliminated the employee's religious conflict, the Groff standard did not even apply.[8] And on April 9, the U.S. District Court for the District of Massachusetts found in Antredu v. Massachusetts Department of Youth Services that the requested accommodation, a COVID-19 vaccine exemption, would have substantially burdened the employer even under Groff.[9] To maximize the likelihood of a successful undue burden argument under Groff, employers should be mindful of generating sufficient analysis and documentation of the costs associated with a requested accommodation. 4. Pay attention to the pending legal challenges on the final noncompete rule. In January, we suggested employers consider reducing their reliance on noncompete agreements in anticipation of the potential shift in enforcement. That shift, however, remains potential even now that the Federal Trade Commission has issued its final rule prohibiting new noncompete agreements and enforcement of existing agreements for most workers.[10] To that end, employers averse to reducing their reliance on noncompete agreements can continue their wait-and-see approach. Indeed, the final rule's Sept. 4 effective date will likely be delayed or prevented by any of the three pending lawsuits against the FTC, with more likely on the horizon. Regardless of the approach taken, however, all employers should resolve to pay close attention to rulings from the pending legal challenges — the U.S. District Court for the Northern District of Texas has indicated it will issue a ruling in Ryan LLC v. FTC by July 3.[11] 5. Reduce your chance of adding to the rising NLRB statistics. At the beginning of the year, we suggested that employers pay attention to changes in union activity, and for good reason: The National Labor Relations Board has reported, for the first six months of fiscal year 2024, a 35% increase in union election petitions and a 7% increase of unfair labor practice charges.[12] These statistics are not surprising in the wake of increasing employee protections and directives from the NLRB, some of which we discussed in January. Employers should continue following union trends without assuming they are insulated. Also continue to look for ways to be proactive about fostering employee relations and ensuring leadership is prepared with knowledge of what lawful actions can be taken when workers engage in concerted activity or organizing efforts. Conclusion Don't be discouraged if your organization has been slow to implement any of our top 10 resolutions for 2024. Plenty of time and opportunity remains this year to make changes, but as you do, remember to keep a pulse on the additional developments that this year has already brought and will continue to bring. Allegra Lawrence-Hardy and Lisa Haldar are partners at Lawrence & Bundy LLC. The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. [1] https://www.law360.com/articles/1778596. [2] EEOC, Select Issues: Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964 (May 18, 2023), https://www.eeoc.gov/laws/guidance/select-issues-assessing-adverse-impact-software-algorithms-and-artificial#_ednref11. [3] 144 S. Ct. 967 (2024). [4] Id. at 974. [5] See Council v. Merril Lynch, No. 3:24-cv-00534 (M.D. Fla. May 24, 2024) ($20 million proposed class settlement); OFCCP settlement with Caterpillar Inc. (May 21, 2024), https://www.dol.gov/newsroom/releases/ofccp/ofccp20240521. [6] Groff v. DeJoy, 600 U.S. 447, 470 (2023). [7] Kluge v. Brownsburg Cmty. Sch. Corp., No. 1:19-cv-02462-JMS-KMB, 2024 WL 1885848 (S.D. Ind. Apr. 30, 2024). [8] Waggoner v. Am. Med. Response Nw., Inc., No. 3:23-cv-01518-SB, 2024 WL 1200183 (D. Or. Mar. 5, 2024). [9] Antredu v. Mass. Dep't of Youth Servs., No. 22-12016-WGY, 2024 WL 1539725 (D. Mass. Apr. 9, 2024). [10] Non-Compete Clause Rule, 89 Fed. Reg. 38342 (May 7, 2024). [11] Order, Ryan LLC v. FTC, No. 3:24-cv-00986-E (N.D. Tex. May 7, 2024), ECF No. 31. [12] NLRB, Union Petitions Up 35%, Unfair Labor Practices Charge Filings Up 7% in the First Half of Fiscal Year 2024 (Apr. 9, 2024), https://www.nlrb.gov/news-outreach/news-story/union-petitions-up-35-unfair-labor-practices-charge-filings-up-7-in-the. Comments are closed.
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