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In August of 2023, the EEOC issued initial regulatory guidance on the landmark 2022 Pregnant Workers Fairness Act, and COVID litigation continued to trickle through the system with some positive and not-so-positive developments for employers.  Get the full details below.

U.S. EEOC unveils proposed regulations for implementing the Pregnant Workers Fairness Act

The U.S. Equal Employment Opportunity Commission (EEOC) has introduced proposed regulations for the implementation of the Pregnant Workers Fairness Act (PWFA), which was enacted in 2022. The PWFA mandates that employers must make reasonable workplace adjustments to aid employees facing pregnancy-related limitations in performing their duties.

The proposed regulations offer insight into how the EEOC will enforce the PWFA. The EEOC in its approach emphasizes that the temporary nature of pregnancy calls for temporary accommodations even after childbirth, as unforeseen health issues could arise. Four accommodations highlighted as reasonable include additional restroom and meal breaks, access to water during work hours, and the flexibility to sit or stand as needed.

On the EEOC’s non-exhaustive list of conditions the EEOC believes generally fall within the scope of the law are “current pregnancy, past pregnancy, potential pregnancy, lactation (including breastfeeding and pumping), use of birth control, menstruation, infertility and fertility treatments, endometriosis, miscarriage, stillbirth, or having or choosing not to have an abortion, among other conditions.”

While acknowledging that implementing the PWFA could incur a cost to the economy of over $200 million, the EEOC counters the economic benefits of improving gender equality in the workplace outweigh this expenditure.  The public will have 60 days to provide feedback on the proposed rules, with specific areas of concern including defining crucial terms, offering examples of acceptable accommodations, and ensuring non-retaliation against employees utilizing such accommodations.

7th Circuit Court of Appeals Affirms Dismissal of COVID Disability Suit Over Remote Work

The Seventh Circuit Court has rejected a lawsuit accusing an Indiana hospital of discrimination against a department supervisor, who claimed that her anxiety prevented her from wearing a mask when asked to return from remote work during the COVID-19 pandemic.  The employee sought an accommodation to continue working remotely.  Despite having successfully worked from home during the pandemic for 6 months, the hospital declined her request, asserting that her executive director role required in-person attendance. The lawsuit alleged discrimination, retaliation, and failure to provide accommodations.

In a unanimous decision, the three-judge panel upheld the lower court’s summary judgment in favor of the hospital, stating that the employee’s essential job functions necessitated her physical presence. The panel highlighted that while remote work was feasible during the pandemic, the nature of her executive director position demanded in-person collaboration, oversight of equipment, and liaison with other departments.

The court emphasized that essential functions requiring on-site presence varied from job to job and could not be universally equated with pandemic-driven remote work. It was noted that the employee’s claims of discrimination and retaliation were unsupported by evidence of intolerable working conditions leading to her resignation. The panel also dismissed the employee’s assertions of gender-based promotion discrimination.

The case underscores the evolving legal landscape regarding remote work accommodations, indicating that determinations must be made on a case-by-case basis, considering specific job requirements.  The case is Anna Kinney v. St. Mary’s Health Inc., case number 22-2740, in the U.S. Court of Appeals for the Seventh Circuit.

Religious Vaccine Exemption Lawsuit Permitted to go to Michigan Federal Jury

A Michigan federal judge has ruled that the MGM Grand Casino must face claims from former employees, Bryant Brown and Hratch Yeremian, who alleged that they were subjected to religious discrimination for refusing the COVID-19 vaccine. The judge, U.S. District Judge Victoria A. Roberts, denied MGM’s motion for partial summary judgment, stating that the workers had provided sufficient evidence to support their claims of disparate treatment.

Brown and Yeremian claimed that they held sincere religious beliefs conflicting with MGM’s vaccine requirement, informed the company about this conflict, and faced adverse employment actions for not complying. Yeremian said he applied for a vaccination exemption based on his Catholic beliefs, which he said barred him from getting the shot because he believed that the vaccines were developed using cells from aborted fetuses.  Brown said he applied for an exemption based on his claim that he suffered from sleep apnea and breathing conditions that prevented him from getting the shot but did not tell the company that he had religious objections, because he felt like submitting a religious accommodation request would be futile based on what he had heard from management.  However, when MGM’s Human Resources Department called Brown in October 2021 to inquire about his vaccination status, Brown said he told the caller his “body is a temple” and he is “allowed to choose what he puts in it,” according to the order. Judge Roberts said MGM did not cite any authority stating that Brown’s call or email wouldn’t be enough to inform the company of the conflict, and pointed to two decisions in the Sixth Circuit that held an employee doesn’t need to request accommodation in a “particular manner” to be considered as notifying their employer of needing a religious accommodation.

Brown and Yeremian sued MGM for violating Title VII of the Civil Rights Act and the Elliott-Larsen Civil Rights Act, alleging wrongful termination and denial of religious accommodations. The court’s ruling allows the former employees to proceed with their religious discrimination claims against the casino.

The case is Brown et al. v. MGM Grand Casino, case number 2:22-cv-12978, in the U.S. District Court for the Eastern District of Michigan.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

In July of 2023, employers are questioning the ripple effects of the Supreme Court’s freedom of religion-based ruling contravening Colorado’s anti-discrimination law, USCIS introduces a new I-9 form that all employers need to know about, and a celebrity lands in hot water over workplace health and safety violations at his school.  Read more below.

U.S. Supreme Court Rules in Favor of Christian Website Designer’s Right to Refuse Services for Same-Sex Weddings

In a significant 6-3 decision along ideological lines, 303 Creative LLC v. Elenis, the U.S. Supreme Court ruled this month that a Christian website designer in Colorado has the right to refuse services for same-sex weddings, citing violations of her free speech rights under the state’s anti-discrimination law.

The case centered around Lorie Smith, owner of 303 Creative LLC, who sought to block the Colorado Civil Rights Commission from enforcing the state’s anti-discrimination law against her. Smith argued that, as an expressive artist, she should not be compelled to create wedding websites for LGBTQ couples, as it conflicted with her religious beliefs that marriage should only be between a man and a woman.

The conservative supermajority of the high court sided with Smith, asserting that the First Amendment protects her from being forced to create designs that communicate messages she disagrees with. Justice Neil Gorsuch, writing for the majority, emphasized that the government cannot coerce individuals to speak in ways that contradict their conscience.

The ruling overturned a decision by the Tenth Circuit and revisited themes from the 2018 case, Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission. The dissenting justices, led by Justice Sonia Sotomayor, criticized the majority’s opinion, arguing that it allows businesses to discriminate against protected classes.

The ruling has implications beyond the case at hand, with critics fearing it could open the door to more discrimination in public accommodations. Colorado Attorney General Phil Weiser vowed to hold accountable those who engage in unlawful discrimination, while Smith’s attorney, Kristen Waggoner of the Alliance Defending Freedom, applauded the reaffirmation of Americans’ right to free speech. 

While not an employment case, the Court’s decision in 303 Creative raises serious questions for employers who constitute public accommodations and have related anti-discrimination policies.  For example, the situation could arise where an individual employee might object to a project on religious grounds and seek an exemption or accommodation to avoid working on the project. Time will tell how these scenarios might play out.

USCIS Introduces Streamlined Form I-9 and DHS Enables Remote Verification for Employers

The U.S. Citizenship and Immigration Services (USCIS) revealed a new Form I-9, set to be mandatory for employers starting August 1, 2023. The updated version has been streamlined and shortened to simplify the hiring process. Employers can still use the old Form I-9 (Rev. 10/21/19) until October 31, 2023, but face penalties if used thereafter. The new form includes a checkbox to indicate if an employee’s documentation was examined using a DHS-authorized alternative procedure, thanks to a final rule issued by the U.S. Department of Homeland Security (DHS). Additionally, employers using E-Verify can conduct verifications electronically, including live video interviews for remote employees.

Notable, USCIS made the following updates to the Form I-9:

• Reduced Sections 1 and 2 to a single-sided sheet. No previous fields were removed. Instead, multiple fields were merged into fewer fields when possible.
• Moved the Section 1 Preparer/Translator Certification area to a separate supplement (Supplement A) that employers can provide to employees when necessary. Employers may attach additional supplement sheets as needed.
• Moved the Section 3 Reverification and Rehire area to a separate, standalone supplement (Supplement B), which employers can print if or when rehire occurs or reverification is required. Employers may attach additional supplement sheets as necessary.
• Removed use of “alien authorized to work” in Section 1 and replaced it with “noncitizen authorized to work” and also clarified the difference between “noncitizen national” and “noncitizen authorized to work.”
• The form can now be filled out on tablets and mobile devices.
• Removed certain features to ensure the form can be more easily downloaded. This also removes the requirement to enter N/A in certain fields.
• Updated the notice at the top of the form explaining how to avoid discrimination in the Form I-9 process.
• Revised the Lists of Acceptable Documents page to include some acceptable receipts and in addition guidance and links to information on automatic extensions of employment authorization documentation. Added a box that eligible employers are required to check if the employee’s Form I-9 documentation was examined under a DHS-authorized alternative procedure rather than via physical examination. 

Former Teacher Files Suit Against Kanye West’s Donda Academy, Alleging Workplace Health and Safety Issues

A former teacher and assistant principal, Isaiah Meadows, has filed a lawsuit against Donda Academy, previously known as Yeezy Christian Academy, alleging various health and safety issues at the school. According to the complaint filed in Los Angeles County Superior Court, Meadows claims that the rapper Kanye West, also known as Ye, who founded the school, did not address critical problems such as lack of working hot water, missing glass in exterior windows, and serious wiring issues that led to an electrical fire.

Meadows further stated that a skylight was installed without glass, causing rainwater to flood the school. The building also experienced periods without electricity, and lessons were conducted using flood lamps powered by generators. Additionally, the lack of hot water posed sanitation issues during the COVID-19 pandemic, and the building’s septic tank overflowed frequently, causing unpleasant odors.

Apart from the health and safety concerns, Meadows alleges issues with his compensation, which was supposed to include assistance with his family’s rent. However, the promised financial support was not fulfilled, leading to severe financial difficulties for him and his family.

The complaint accuses Donda Academy and Kanye West of breach of contract for unpaid wages, breach of the covenant of good faith and fair dealing, and various violations of the state’s labor code. The school has not yet responded to the allegations.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

In June of 2023, a federal court holds that offensive song lyrics in the workplace can amount to workplace harassment, the Supreme Court made it easier for employers to compel arbitrations, and a Pennsylvania construction company is hit with significant prevailing wage violations.  To find out more, see the details below.

Federal Circuit Court holds Rap Lyrics May Sustain Sex Harassment Case

The Ninth Circuit Court of Appeals has revived a discrimination lawsuit against an apparel manufacturer, S&S Activewear LLC, alleging the creation of a hostile work environment due to explicit rap music played in a Nevada warehouse. The court panel ruled that the “sexually demeaning and violent language” present in the music could support the former workers’ case. The trial court’s dismissal of the Title VII suit was deemed erroneous. The judges emphasized that the music’s pervasive nature could potentially constitute sex discrimination under Title VII, even if both men and women were offended. The decision aligned with previous rulings from other circuit courts, establishing that widespread sights and sounds can amount to sex discrimination. The appeals panel directed the district court to reconsider the motion to dismiss, highlighting that auditory and visual harassment need not be targeted at a specific individual to taint the workplace. The case, brought by eight former workers (seven women and one man), alleged that S&S Activewear allowed “sexually abusive and misogynistic” music to play in the facility, fostering a toxic environment.  The case is Stephanie Sharp et al. v. S&S Activewear LLC, case number 21-17138, in the U.S. Court of Appeals for the Ninth Circuit.

Supreme Court Reinforces Employer’s ability to Compel Arbitration

In a recent 5-4 ruling, the U.S. Supreme Court has made it easier for employers to enforce arbitration agreements in legal disputes. The decision, made on June 23 in Coinbase Inc. v. Bielski, states that a district court must suspend its proceedings while an appeal on the question of arbitrability of a dispute is underway. The case itself combined two class-action lawsuits against Coinbase, involving alleged violations of the Electronic Fund Transfer Act and deceptive sweepstakes practices. Justice Brett Kavanaugh, writing for the majority, commented that allowing pre-trial and trial proceedings to continue during the appeal would undermine the efficiency and cost-saving benefits of arbitration. To that end, the ruling is expected to alleviate the financial and procedural burdens on parties involved in litigation, allowing them to await a decision from an appeals court without engaging in costly legal battles. The decision has been praised by proponents of employment arbitration agreements, highlighting the value proposition of such agreements. 

Pennsylvania Appellate Court Affirms Construction Co. Violated Prevailing Wages

A panel of the Commonwealth Court of Pennsylvania has ruled that a construction company, Scott Pangallo Contracting, is financially responsible for unintentionally violating the Pennsylvania Prevailing Wage Act. The three-judge panel affirmed the Pennsylvania Prevailing Wage Appeals Board’s decision that the company violated the act by not paying the correct prevailing wages to workers involved in a renovation project. The panel rejected Pangallo’s argument that the public body involved in this case, the Clearfield County Recreation and Tourism Authority, should also be held responsible for the violations.  However, the panel stated that the law does not allow for penalties to be imposed on public bodies, only on employers. Therefore, the panel concluded that it cannot order penalties against the public body. The Department of Labor and Industry had given Pangallo the opportunity to adjust the wages owed by submitting a check for the underpayments, but Pangallo appealed the decision. The case highlights the limitations of the prevailing wage law and the responsibility of employers to ensure proper payment to workers.  The case is Pangallo et al. v. PWAB, case number 526 CD 2022.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

Partner with MacElree Harvey’s Estate Litigation group, Robert Burke, will be appearing on the Kristen Hagopian Show to discuss the changing law in Pennsylvania, and other states in the country, relating to piercing the corporate veil.  This change directly impacts all business owners and their ability to protect their personal and business assets.  The episode first airs Nationwide on Wednesday, June 14, 2023 on 200+ stations Nationwide via BizTalkRadio & the BBS Network – www.biztalkradio.com.  Go to https://www.macelree.com/attorney/robert-a-burke/ for additional information.

By: Michael G. Louis, Esquire

Over the last year I have been hard at work on “tax sales”.

I have been able to save six people’s homes from tax sale, exercise the right to redeem someone’s home that was sold at sheriff’s sale for taxes, and overturned a private sale of someone’s home.  In addition, I was able to settle the sale of a million dollar commercial property that had been sold at tax sale.

In an upset tax sale, the party buying the property at tax sale buys it under and subject to all existing liens that are on the property.  Therefore, most properties that are sold at tax sale have no liens on them.  That is why they are so difficult for the homeowners who have worked their whole life to buy their property and pay it off over time only to lose it for pennies on the dollar at tax sale.  That is why I am working hard to help people save their properties from tax sale.

I am also currently advising a purchaser at tax sale that did not realize there was a mortgage on the property and now owns it under and subject to the mortgage.

There is another kind of sale where the taxing authority, rather than going through the tax claim bureau to do the tax sale, has an attorney such as Portnoff & Associates, file an action for the taxes and obtains a judgment and then takes the property to sheriff’s sale.  The good thing about someone who loses their property at sheriff’s sale for their taxes is that they have nine months after the deed is recorded to redeem the property by paying back the purchaser what they bid at sheriff’s sale plus 10% interest.  They do not have to show that there was any defect with the sheriff’s sale. 

If a property is not purchased at an upset tax sale it then goes to a judicial tax sale where all of the lienholders are notified.  A judicial sale purchaser acquires title free and clear of liens and encumbrances.  If it still isn’t sold at judicial sale then it can go to a private tax sale where anyone can come in and make a bid for the property.  I just had a private tax sale overturned.  The way to do that is you need to prove that the original upset tax sale was not properly done which is what I alleged in that case and we were able to settle it for a very reasonable sum of money.

Finally, I was able to overturn the sale of a commercial property worth close to $1 million dollars.  In that case, we had to pay $50,000.00 to the purchaser but it was worth it in light of the value of the property.  I was able to find my client a lender who would loan them the money to pay the delinquent taxes, pay $50,000.00 to the purchaser and some extra money to do some work on the property.

The key is to act quickly.  Most purchasers at tax sale would rather settle for some amount quickly rather than have their purchase monies tied up in litigation for six months or a year.  If the tax sale is eventually overturned, all they get back is their money with no interest having been earned on it over the last six months or a year.

If you are a homeowner or a commercial property owner who lost your real estate at a tax sale or sheriff sale for delinquent real estate taxes, please contact me as soon as possible to try to save your property by having the tax sale overturned, settling with the purchaser or redeeming your property after sheriff sale.

Michael Louis is Chair of MacElree Harvey’s Banking and Finance Litigation Practice. Michael’s personal practice supports the needs of businesses and homeowners in a changing economic environment. He has extensive experience defending clients in mortgage foreclosures, collections and loan workouts, general counsel work and real estate litigation, including landlord-tenant litigation. In addition to practicing civil litigation as referenced above, Michael does bankruptcy for debtors and creditors. To contact Michael, call 610-840-0228 or email [email protected]

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