By: Richard Meneghello

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A recent controversy over the hit Broadway show “Hamilton” can teach employers a valuable lesson about hiring and making other employment decisions. The producers of the show were accused of discriminatory hiring practices when a casting call sought “nonwhite” performers to appear for auditions. Although no legal action was initiated, the situation can offer guidance to employers regarding when (if ever) you can take protected categories such as race, national origin, age, religion, or gender into account when making personnel decisions.

Popular Broadway Show Seeks “Nonwhite” Performers
In August 2015, a new Broadway show burst onto the scene and captured the attention of the musical theater world. The unlikely subject of this modern musical, featuring rap and hip-hop songs, was founding father Alexander Hamilton. The show, titled “Hamilton,” has played to sold-out audiences since its debut and has captured numerous awards, including a Grammy Award for best musical theater album.

One of the elements that makes the show unique is that, while the costumes and set design reflect the 18th century, the actors portraying the historical figures such as Hamilton, Thomas Jefferson, and George Washington are all played by African-American, Latino, and other actors with ethnically diverse backgrounds.

Owing to its enormous popularity, in January 2016 the producers began planning a national tour for “Hamilton.” In anticipation of a run in Chicago, San Francisco, and Los Angeles, the show put out a casting call for actors and actresses to fill the key roles. The audition notice sought “nonwhite men and women, ages 20s to 30s.” Although that posting appeared on the show website for months, a news report about the alleged ‘reverse racism’ contained in the hiring notice sparked a controversy in late March 2016.

Attorney Believes Casting Call Was Discriminatory
A New York City civil rights attorney complained that the casting call violated the city’s strict Human Rights Law. Speaking to CBS New York, the attorney said, “What if they put an ad out that said, ‘Whites only need apply?’ Why, African-Americans, Latinos, and Asians would be outraged.” He cited to the city law that makes it unlawful for an employer to make a decision about a job candidate because of race (much like federal law).

The “Hamilton” producers responded to the allegation by affirming their commitment to a diverse cast. One producer stated that it was “essential to the storytelling of ‘Hamilton’ that the principal roles – which were written for nonwhite characters – be performed by nonwhite actors.” He cited to the concept of bona fide occupational qualifications, which allows racial characteristics to be taken into consideration when making hiring decisions in certain artistic situations.

Bowing to some pressure from the actors’ union (and perhaps due to the burgeoning media controversy), the show amended the casting call to include language encouraging people of all ethnicities to audition. Given that no formal charges of discrimination have yet been filed with any city, state, or federal agencies, this controversy may have already blown over without any lasting impact. However, employers across the country could learn important lessons about hiring using “Hamilton” as a guide.

What Are BFOQs?
The legal theory cited by the show’s producer – bona fide occupational qualifications, or BFOQs – is not restricted to the artistic world. Public and private employers across many industries have relied upon the concept to make otherwise-discriminatory employment decisions and escape legal liability. However, this exception is incredibly narrow and should be used quite sparingly, after careful consideration and consultation with your legal counsel.

Simply put, a BFOQ is a quality or attribute of a candidate that you can take into consideration when making a decision about hiring or retention of a specific applicant or employee. In any other context, using such a characteristic would be blatant and straightforward illegal discrimination. After all, a combination of federal, state, and local laws generally prohibit you from considering an applicant’s race, national origin, age, gender, religion, or other similar qualities when making any employment decisions.

However, using the BFOQ defense, employers can legally discriminate in limited circumstances. Title VII, for example, permits employers to consider religion, gender, or national origin in those certain instances where reasonably necessary to the normal operation of the particular business or enterprise. However, courts have interpreted the BFOQ exception very narrowly.

When Can Employers Use The BFOQ Defense?
So when can an employer use a BFOQ and avoid liability? In the artistic context, it is often easy to properly apply the exception. In the case of “Hamilton,” if the very purpose of the musical is to portray historical figures in a multicultural setting, the show would probably prevail if a legal challenge is made. If you are putting on a show or making a movie, you are generally permitted to make hiring decisions based on otherwise protected classes – seeking a woman for a lead female role, for example, or seeking to hire an older male when casting for a grandfather. But outside of an artistic context, the issue becomes much murkier.

Selecting Employees Because Of Race
If you are a law enforcement agency setting up an undercover sting operation to infiltrate a white supremacist gang, for example, you can probably feel comfortable restricting applicants to white males using a business necessity argument. But beyond that, it is nearly impossible for race to be legally considered when making a hiring or staffing decision. In fact, Title VII does not even include “race” as one of the traits that it considers covered by the BFOQ defense.

Using Age As A BFOQ
One of the more common uses of the BFOQ defense involves age restrictions. Although the Age Discrimination in Employment Act and state laws generally prohibit age discrimination, mandatory retirement ages have been upheld as proper applications of the BFOQ defense when employers can demonstrate the reasonableness and business justification of the restriction. For example, police officers, firefighters, airline pilots, cab drivers, and transit workers are often precluded from continuing in their service after a certain age due to safety reasons.

Religious Beliefs As A BFOQ
Religious institutions can lawfully restrict the hiring of certain positions by faith, depending on a variety of factors relating to the nature of the job and the mission of the position. However, rather than employing a BFOQ defense, most religious entities that restrict hiring in this regard rely on specific religious exemptions contained in the law (such as the ministerial exception, as most recently described by the Supreme Court in 2012).

There have been some unique examples of non-religious companies lawfully restricting applicants for certain positions through a BFOQ defense. These generally center on jobs that will be performed overseas and in situations where the host countries have local rules or traditions barring individuals from activities due to religion.

For example, a famous federal court case from the 1980s upheld a company’s business practice of only hiring Muslim helicopter pilots who would be assigned to work in Saudi Arabia because local law provided for the beheading of non-Muslims who entered that holy area.

National Origin As A BFOQ
Much like race, it is very difficult to legally make a hiring decision because of an applicant’s national origin. The availability of the BFOQ defense is very narrow in these circumstances. The Supreme Court has noted that certain positions within a foreign corporation doing business in the United States, for example, might be lawfully restricted to applicants of a particular national origin.

However, in order to prevail, the employer would need to prove that the need for great familiarity of the language, culture, customs, and business practices of that country could be demonstrated to be sufficiently necessary to satisfy the BFOQ standard such that only a person from that country could do the job.

Gender As A BFOQ
The EEOC’s Guidelines on gender as a BFOQ have remained virtually unchanged since 1965. They note that, outside of artistic situations where authenticity in the role is required, it would be extremely difficult to justify selecting a candidate because of gender.

In one of the more famous Supreme Court cases dealing with this area, 1981’s Johnson Controls case, the Court held that employers could not restrict women from working in potentially hazardous positions if they so choose just because the jobs might cause damage to reproductive organs.

There are some rare examples where positions can be restricted by gender, however. Prison guards or other officers at a correctional facility, psychiatric health care specialists, locker room attendants, and custodians in single-sex facilities are examples where employers have been permitted to lawfully employ a BFOQ defense when discriminating on account of gender.

Can You Take Customer Preference Into Account?
Generally, you cannot justify a BFOQ defense due to customer or client preference of a certain protected class. Just because your customers might expect your server or massage therapist to be a female, or expect your lobby attendant or salesperson to be male, you are not permitted to rely solely on those stereotypical assumptions when making hiring and staffing decisions.

There are limited instances where customer preference can be taken into account, but the exception is likewise extremely narrow. The defense will only work in situations where personal physical privacy would be violated by the presence of the opposite gender (locker room attendants, for example), or when a certain characteristic is necessary for the business to perform its primary function or service (the Playboy Club hiring female Playboy Bunnies, for example).

Conclusion: BFOQs Are Applied Narrowly
If you take anything from this situation, it’s that BFOQs are not your standard employment defense tactic. You should not rely on this theory as an effective technique to defend your average discrimination claim, and you should not employ it in hiring or staffing situations without giving careful consideration to the law.

If you can achieve your hiring goals with a broader hiring net without fundamentally altering your business, you should consider avoiding this path altogether and make your decision without taking protected classes into account. While smash Broadway shows might be able to avoid legal liability, you might not be so lucky.

By: Steven Bernstein

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There is little doubt that the National Labor Relations Board (NLRB) is making its impact felt – even if your company never sees a union. By expanding its concept of “concerted protected activity,” the Board has staked out new territory for investigating union and non-union entities alike. And if the NLRB determines you have violated the law, they have ways of making your life miserable.

The Board can order non-complying employers to take steps such as posting an employee notice describing workers’ rights, or perhaps rescinding handbook policies that run afoul of the law. Or, taking it one step further, it could force you to reinstate any employees you have discharged for violating policies it finds out of bounds.

Set forth below are just a few areas in which the agency can impact your business, along with some action items to help you steer clear of potential legal exposure:

• Social Media Policies – The NLRB will closely scrutinize policies which broadly restrict employee rights to air public grievances concerning wages and other working conditions on Facebook, Twitter, and elsewhere (read more here).
• Off-Duty Access Restrictions – Policies that give management the broad discretion to determine the circumstances in which employees may be disciplined for violating “no loitering” policies will likely be invalidated (read more here).
• Class Action Waivers – Despite multiple court decisions to the contrary, the agency continues to enforce its doctrine prohibiting class action waivers contained in binding arbitration agreements, calling them an encroachment on concerted protected activity (read more here).
• Restricting Discussion of Internal Investigations – The NLRB has issued a line of decisions invalidating policies that impose blanket restrictions on an employee’s right to discuss the status of complaints under internal investigation (read more here).
• Solicitation and Distribution Policies – The agency is carefully scrutinizing rules that ban solicitation for “commercial purposes,” or otherwise extend beyond working areas and working time (read more here).
• Electronic Communications – Through recent decisions such as Purple Communications, the NLRB is now invalidating policies that purport to restrict the use of electronic communications over business-owned systems during non-working time (read more here).
• At-Will Policy Statements – Recent rulings suggest that the Board will now invalidate any at-will statements that state or imply that such status may not be modified by anyone under any circumstances (read more here).
• Rules Requiring “Courteous” or “Respectful” Behavior – Policies broadly requiring such conduct, or prohibiting “disparaging” or other conduct that “impedes harmonious relationships,” are generally deemed unlawful (read more here).
• Outright Bans on Workplace Photography or Recording – Through a pair of recent Board rulings, you are generally precluded from imposing outright bans on such conduct except under extremely narrow circumstances (read more here).
• Overly Broad Restrictions on Media Disclosures – The NLRB has made clear that unless confined to situations in which the employee purports to address the media on the employer’s behalf, such restrictions are overly broad (read more here).
• Restrictions on Public Logo Displays – Remarkably, the agency has gone so far as to suggest that you may not impose outright bans on displaying a company logo, absent compelling business reasons (read more here).
• Overly Broad Confidentiality Rules – Policies purporting to prohibit disclosure of employee salary information or related data pertaining to wages or benefits are increasingly being struck down as overly broad (read more here).
• Mandatory Complaint Policies – Similarly, policies compelling employees to direct their grievances through internal resolution mechanisms are also being invalidated under the concerted protected activity doctrine (read more here).

If you have not reviewed your policies and procedures in 2016, now is the time to do so.  You should scrutinize them carefully for any language that broadly restricts group discussion or action, mandates advance management approval, or otherwise broadly proscribes “unprofessional” or “inappropriate” conduct.

Take steps to ensure that all general restrictions are accompanied by narrower terms defining the scope of improper conduct. Avoid ambiguity in favor of specific examples where possible, and consider adding a proper disclaimer.

By: Jose’ Klein

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“A simple PC contains a kind of ‘undead’ spectral domain of deleted texts which nevertheless continue to lead a shadowy existence, ‘between the two deaths,’ officially deleted but still there, waiting to be recovered. This is the ultimate horror of the digital universe: in it everything remains forever inscribed; it is practically impossible to get rid of….”

It is unlikely that the Slovenian psychoanalytic Marxist philosopher Slavoj Zizek had in mind the wellbeing of corporate defendants in workplace litigation when he articulated this “ultimate horror of the digital age.” Nevertheless, you would be well advised to take heed to his cautionary words about the permanence of electronic communications.

Water-Cooler Talk That Never Goes Away
With the proliferation of computer and mobile applications designed to streamline workplace communication and connect employees to one another in virtual settings, the problem has only become more pronounced. Apps like Slack, Campfire, and Google Hangouts facilitate immediate sharing of information and collaboration without the waste of having to get up from one’s desk and find a real-life water cooler to gather around.

These apps also create a permanent searchable record of all the stupid, inappropriate, and harmful things that employees say on those platforms. For plaintiffs’ attorneys these records can be a treasure trove.

Take, for example, the recent case of Bollea v. Gawker Media, also known as the infamous Hulk Hogan sex-tape trial. Writers and employees at Gawker used the app Campfire to set up chatrooms, share files, and collaborate on stories, which were all legitimate business-related purposes. However, employees also used the app to gossip and editorialize about, among other things, the Hogan story.

Employee Max Read recently revealed in New York Magazine that the experience of having a private off-hand joke he made on the app to coworkers – something about the wrestling maneuver known as a leg drop – was embarrassing to have dissected in a sworn deposition and ultimately appear in the trial itself. For Read and for others, it can be truly haunting to have long-dead texts return years later as resurrected zombies in workplace litigation.

What Should You Do?
The lesson here is to be mindful of employee tendencies to treat these new communication platforms as operating like speech. While on the one hand there are clear advantages to be gained from the spontaneity and informality of the chatroom – efficiency, camaraderie, and easy collaboration, to name a few – verbal remarks that might make sense (or at least be forgotten) in the context of oral communication can later be dug up and used for very different effect. You need to set and enforce standards of chatroom communication consistent with other areas of their workplace culture.

But Wait – There’s More…
These shifting tectonics of the workplace in the digital age are not unique to the chatroom apps of Slack and Campfire. Employees also use apps like Get the Memo to anonymously carp about their company and superiors. This app, which bills itself as “a safe place to talk about work,” allows people to post and view anonymous messages left by unnamed coworkers. Employees could use this app to spout off about any number of topics, true or untrue, verified information or merely gossip, sowing discord in the workplace.

Another smartphone app to worry about is currently being created by labor advocates. The proposed app would not only allow employees to communicate anonymously about working conditions, but would assist in identifying an appropriate bargaining unit and even gather electronic signatures for a union petition (read more here). Most troublesome for you is that these activities could be happening right under your nose without you being at all aware that an employee-organizing campaign is even occurring.

And there are other developers working to create products that facilitate potentially divisive employee behavior. For example, the Workers Lab is developing an app that would allow employees to document and report OSHA violations with a few simple clicks on a smart phone. The app is being made by the same outfit that developed SeeClickFix, which allows users to report problems like potholes or graffiti to municipal authorities.

What Should You Do?
In the private workplace, even for companies that are fully compliant with safety and other regulatory standards, these tools will provide new opportunities for disgruntled employees to create havoc while ushering in a new level of government scrutiny. Meanwhile, labor laws and whistleblower statutes may make it impossible for you to craft policies that would prohibit these apps from being deployed by your workforce.

To combat these digital terrors, the first step is to understand the role that you as the employer can play in setting the tone. As in the case of Slack and Campfire, the employer sets the baseline for the workplace culture that develops and uses these apps for communication. Through clear policies and focused training efforts, you can reduce the likelihood that employees will misuse these apps and create “evidence” that will come back and haunt you.

You should also create and maintain open door policies and other efforts to combat employee alienation. Employees who feel that they are a part of your enterprise and who feel that you want to hear their concerns are more likely to raise their concerns internally than to report those issues to a third-party regulator, seek union representation, or post their grievances on a public but anonymous app.

Finally, you should work with your frontline supervisors. If they are trained on what to look for, they can provide critical early detection of the kinds of employee disaffection that leads to the utilization of these apps and other divisive devices.

By: Matthew Simpson

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Many of our dealership clients utilize binding arbitration agreements to resolve employee disputes. Arbitration agreements provide a number of unique benefits to those dealerships that wish to avoid the costs and negative publicity typically associated with a jury trial. By asking employees to agree to binding arbitration, dealerships are able to address employment claims in a less formal and more efficient setting than can be found in the federal courthouse.

NLRB Strikes Down Dealer Arbitration Agreement
However, the National Labor Relations Board (NLRB) recently found that the arbitration agreement maintained by one California dealership, Concord Honda, was unlawful because it contained a class action waiver. The NLRB directed the dealership to rescind the arbitration agreement or revise it to exclude this key provision.

In light of this decision, many dealers may feel pressure to abandon their own arbitration programs or risk similar penalties. We would caution you not to overreact.  Arbitration agreements remain an important tool in defending employment claims and should not be discarded on the basis of one flawed decision from the NLRB.

Class Action Waivers Remain Important
One of the most significant advantages to arbitration is that it allows dealerships to handle employees’ threatened claims on an individual, rather than class-wide, basis. In 2011, the U.S. Supreme Court held that companies can prohibit individuals from pursuing most class action claims in court by requiring them to arbitrate all claims on an individual basis (read more here).

In the employment context, this has become an extremely effective tool in managing litigation costs. As class and collective action claims rise under the Fair Labor Standards Act, Fair Credit Reporting Act, Equal Pay Act, and other federal and state laws, employers are able to manage defense costs by litigating a single employee’s claim in arbitration, as opposed to hundreds of employees’ claims in federal court.

Labor Board Remains Hostile; Courts To The Rescue?
This is exactly why the NLRB has put arbitration agreements in its crosshairs. According to the Board, any arbitration agreement that requires employees to waive their right to pursue class or collective actions is unlawful because it supposedly prohibits employees from engaging in protected concerted activity with their coworkers. The NLRB has therefore consistently sought to invalidate arbitration agreements including class action waivers.

There is just one big problem with the NLRB’s approach – it has consistently been rejected by federal appellate courts. In fact, whenever the NLRB has held that an arbitration agreement containing a class action waiver is unlawful, a federal court has overruled the decision and enforced the agreement.

We expect that the same will happen in this case. Concord Honda has appealed the NLRB’s decision to the 9th Circuit Court of Appeals, where it will hopefully achieve the same result as other companies that have challenged the NLRB’s overreach.

What Should Dealerships Do?
In the meantime, this is a critical time for you to reevaluate existing arbitration agreements. If your agreement has not been updated in the last couple of years, it may not be providing all of the protections that it should. Even worse, it may be subject to attack by the NLRB. We therefore encourage you to consult with labor and employment counsel to make sure you have a lawful and up-to-date arbitration agreement that protects you in the event of employment litigation.

By: Tillman Coffey

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As our society has evolved and changed, standards for acceptable dress and appearance have also been transformed. For example, tattoos, once seen mostly on bikers and those who had served in the military, are now mainstream. An estimated 40% of Americans have at least one tattoo and women are just as likely as men to have one.

Similarly, about 80% of Americans are estimated to have at least one piercing. Purple hair, mohawks, dreads, and “man buns” are all the rage. Low cut and revealing clothing that would seem to many to be more appropriate for a night of clubbing are worn in all settings without hesitation. Spandex and yoga clothes have replaced sweatpants. These changes in attitudes about appearance impact the workplace and create challenges for employers.

Dealerships Can Set Appearance Standards
Dealerships, like other employers, have the right to adopt and enforce dress or appearance policies that help create and maintain a certain image. Except for situations discussed below, you can generally dictate requirements related to your employees’ appearance (clothing, hair, tattoos, piercings, shoes, etc.) and expect them to have and maintain a certain “look.”

You can even set different standards depending upon an individual’s job position within the dealership. For example, a policy may prohibit visible tattoos, piercings, and “colorful” hairstyles for those employees who have regular, in-person interaction with customers (such as salespersons), but have a more relaxed standard for those without customer contact (like technicians).

While each dealership should create a unique appearance policy that matches your culture, it is inadvisable to have no established and written appearance guidelines at all. Even those dealerships that are concerned about encroaching on employees’ freedom of expression should create expectations.

Having an enforced policy in place before a tattoo, haircut, or head covering issue arises can help protect your public image, promote a productive environment, comply with health and safety standards, and even prevent claims of discrimination and harassment.

Policies Should Cover Everything …
An appearance policy should require that all employees present a professional and well-groomed appearance, while addressing good hygiene, uniforms, and safety-related attire. You can set limits on tattoos, piercings, gauges, and extremes in dress, jewelry, and hairstyles, but many employers have found a zero-tolerance policy too strict.

Many employers permit body piercings or tattoos with limits on the number, size, placement, content, or visibility. In the final analysis, your policy should articulate what is permitted and prohibited and include language that permits management to determine what is and is not appropriate. Once you have disseminated the policy to your employees, enforce it consistently.

…But You Must Allow Some Exceptions To Peek Through
While you generally may require all workers to follow a uniform dress code, you may also be legally required to make exceptions to your policies. For example, an employer must not treat some employees less favorably because of their national origin. If your dress code prohibits certain kinds of ethnic dress, such as traditional African attire, but otherwise permits other casual dress, you may face a legal challenge for discrimination.

Likewise, if your appearance code conflicts with an employee’s religious practices, you must consider requests for accommodation and determine if allowing the accommodation would result in undue hardship. If it would not, you must permit the accommodation.

For example, if an employee’s religion required the wearing of a head covering or required a male employee to wear a beard, your dealership likely would have to permit these accommodations, even if your policy strictly prohibited them. (Alert: your customers’ or other employees’ dislike for the requested accommodation does not qualify as an undue hardship.)

Similarly, if an employee requests an accommodation because of a disability, you must modify or permit an exception to the dress code unless doing so would result in undue hardship. For example, you may have to grant an exception to an appearance policy that prohibits facial hair for an employee with certain skin conditions.

True Stories From Recent Court Cases
The courts are regularly addressing these issues. In a recent high-profile case, a retailer settled a series of cases involving Muslim female employees who were either not hired for or were terminated from sales positions because they wore a headscarf. The retailer required its employees to comply with its “Look Policy” that prohibited “caps” to be worn, but did not mention other headgear.

In another case, a female employee alleged that her employer discharged her because her religion did not allow her to wear slacks as required by the dress code policy. The employee alleged that when she told her employer that she had to wear a skirt, the employer refused the accommodation.

In yet another case, an employer settled a case brought by a former employee fired for having visible tattoos, paying $150,000. The employee’s religious sect believed that tattoos symbolized its devotion to its creator, but the employer believed (incorrectly) that its desire to promote an “All-American” look trumped the religious belief.

Dealerships must address requests for accommodation to appearance policies, ensure consistent enforcement, and train supervisors not to make knee-jerk decisions about such requests. Remember, the need to maintain a certain look is generally not enough hardship to justify blanket refusals for such requests. Seeking legal guidance when these issues arise is never a bad idea.

Buttoning It All Up
While employers still retain wide latitude when it comes to appearance policies, practical, social, and legal factors require you to create them carefully. Also, you must consider requests for accommodation that might have been readily (and safely) dismissed several years ago.

With the changes in society and the need to attract and retain new employees into the industry, as well as attracting like-minded customers, you may be wise to revisit and update your policies. Remember, you’re not in Kansas anymore.