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<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/DuA5xsKpI9Y/us-usa-stocks-idUSKBN1701DZ target=_blank >S&P, Dow weighed down by financial stocks; Nasdaq up</a>
<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/Qs8ecxETXWg/us-samsung-elec-smartphones-idUSKBN17027R target=_blank >Samsung launches Galaxy S8 and dreams of recovery from Note 7</a>

(Reuters) – Samsung Electronics Co Ltd unveiled its Galaxy S8 flagship smartphone as it battles to regain the market leadership it lost to Apple Inc after the embarrassing withdrawal of the fire-prone Note 7s.

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<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/TBsuonh-f-U/us-britain-eu-banks-idUSKBN1700YA target=_blank >Banks to London staff: no panic as Britain launches EU divorce process</a>

LONDON (Reuters) – Banks in Britain have tried to reassure their London staff over possible Brexit disruption, including a shift in jobs to continental Europe, as Prime Minister Theresa May triggered formal EU divorce proceedings on Wednesday.

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<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/VXn0qndNTuA/us-banco-santander-settlement-idUSKBN1702EN target=_blank >Santander to pay $22 million to resolve subprime auto loan probes</a>

BOSTON (Reuters) – A unit of Banco Santander SA has agreed to pay $22 million in connection with what the attorney general in Massachusetts called a first-in-the-nation settlement involving subprime auto loan securitization.

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<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/qoVAKZ1V-X0/us-usa-economy-idUSKBN1701XS target=_blank >Pending home sales surge to 10-month high</a>

WASHINGTON (Reuters) – Contracts to buy previously owned U.S. homes jumped to a 10-month high in February, pointing to robust demand for housing ahead of the busy spring selling season.

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<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/hp7A9UsdW_4/us-usa-property-kushner-anbang-group-idUSKBN170224 target=_blank >Kushner, Anbang end talks to redevelop Manhattan office tower</a>

NEW YORK (Reuters) – Kushner Companies, the real estate firm formerly headed by President Donald Trump’s son-in-law, said it has dropped out of talks to redevelop its flagship New York office tower with China’s Anbang Insurance Group [ANBANG.UL].

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<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/g3wFY1OzDoE/us-opec-oil-idUSKBN17025Z target=_blank >OPEC compliance with oil curbs rises in March as UAE joins cut: survey</a>

LONDON/DUBAI (Reuters) – OPEC oil output is likely to fall for a third straight month in March, a Reuters survey found on Wednesday, as the United Arab Emirates made progress in trimming supplies while maintenance and unrest cut production in exempt nations Nigeria and Libya.

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<a href=http://feeds.reuters.com/~r/reuters/businessNews/~3/jBDFEje-xWE/us-china-gdp-idUSKBN170275 target=_blank >China's first-quarter GDP growth seen at 6.8 percent: government think tank</a>

HONG KONG (Reuters) – China’s economy, the world’s second largest, will likely expand 6.8 percent in the first quarter of 2017, the official Xinhua agency quoted a government think tank as saying on Wednesday.

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<a href=http://www.employmentlawdaily.com/index.php/news/title-vii-still-doesnt-bar-sexual-orientation-discrimination-go-with-gender-stereotyping/ target=_blank >Title VII still doesn’t bar sexual orientation discrimination; go with gender stereotyping</a>

By Kathleen Kapusta, J.D.

Bound by the decisions of prior panels, the Second Circuit, affirming in part the decision of the court below dismissing an openly gay employee’s claims, refused his invitation to reconsider earlier precedent in light of a changed legal landscape and to hold that Title VII’s prohibition on discrimination “because of . . . sex” encompasses discrimination on the basis of sexual orientation. Reversing in part, however, the appeals court found the employee plausibly alleged a Title VII claim based on gender stereotyping. In a concurring opinion, Judges Katzmann and Brodie wrote that “in the context of an appropriate case, our Court should consider reexamining the holding that sexual orientation discrimination claims are not cognizable under Title VII. Other federal courts are grappling with this question, and it well may be that the Supreme Court will ultimately address it” (Christiansen v. Omnicom Group, Inc., March 27, 2017, per curiam).

The HIV-positive employee alleged that his supervisor described him as “effeminate” to others in the office, depicted him in tights and a low-cut shirt “prancing around,” and circulated a poster with his head attached to a female body clad in a bikini lying on the ground with her legs upright in a manner that one coworker thought depicted him as a “submissive sissy.” The supervisor also made comments suggesting the employee had AIDS.

No coherent line. The employee sued, asserting, among other things, a claim under Title VII. While declaring that “no coherent line” could be drawn between sex stereotyping and sexual orientation discrimination, the district court nonetheless followed circuit precedent and dismissed his claim finding Title VII does not cover sexual orientation. The court also found that, as a whole, his complaint did not allege he was discriminated against because he did not conform to gender stereotypes, but because he was gay.

Bound. On appeal, the Second Circuit panel pointed out that it was “bound by the decisions of prior panels until such time as they are overruled either by an en banc panel of our Court or by the Supreme Court.” Thus, it lacked the power to reconsider Simonton v. Runyon and Dawson v. Bumble & Bumble, which held that Title VII does not prohibit discrimination on the basis of sexual orientation.

Confusion. The employee, however, plausibly alleged a Title VII claim based on the gender stereotyping theory of sex discrimination articulated in Price Waterhouse, said the appeals court, noting that his complaint identified multiple instances of this type of discrimination. As to the district court’s determination that his allegations about his effeminacy did not transform his claim into one for sexual stereotyping, the appeals court pointed out that “this draws attention to some confusion in our Circuit about the relationship between gender stereotyping and sexual orientation discrimination claims.”

Noting that some district courts have viewed Simonton and Dawson as making it “especially difficult” for gay plaintiffs to bring gender stereotyping claims, the court explained that these cases “misapprehend” the nature of these rulings and that “gay, lesbian, and bisexual individuals do not have less protection under Price Waterhouse against traditional gender stereotype discrimination than do heterosexual individuals.” Rather, said the court, Simonton and Dawson “merely hold that being gay, lesbian, or bisexual, standing alone, does not constitute nonconformity with a gender stereotype that can give rise to a cognizable gender stereotyping claim.”

Here, the employee alleged he was perceived by his supervisor as effeminate and submissive and that he was harassed for these reasons. Further, the harassment allegedly invoked “stereotypically feminine” traits. Finding it could not at the motion to dismiss stage weigh the evidence and evaluate the likelihood the employee would prevail on his gender stereotyping claim, the appeals court found he stated a plausible claim and reversed for further proceedings.

Concurrence. In a separate opinion, the concurring judges argued that “when the appropriate occasion presents itself, it would make sense for the Court to revisit the central legal issue confronted in Simonton and Dawson, especially in light of the changing legal landscape that has taken shape in the nearly two decades since Simonton issued.”

Further, the concurrence pointed out, “taking a fresh look at existing cases, the EEOC and other advocates have articulated three ways that gay, lesbian, or bisexual plaintiffs” could show discrimination because of sex. First, the judges observed, plaintiffs could demonstrate that if they had engaged in identical conduct but been of the opposite sex, they would not have been discriminated against. Second, they could demonstrate that they were discriminated against due to the sex of their associates. Finally, plaintiffs could demonstrate that they were discriminated against because they do not conform to some gender stereotype, including the stereotype that men should be exclusively attracted to women and women should be exclusively attracted to men.

“Neither Simonton nor Dawson had occasion to consider these worthy approaches,” the judges argued, reasoning that the “binary distinction that Simonton and Dawson establish between permissible gender stereotype discrimination claims and impermissible sexual orientation discrimination claims requires the factfinder, when evaluating adverse employment action taken against an effeminate gay man, to decide whether his perceived effeminacy or his sexual orientation was the true cause of his disparate treatment.” This, however, “is likely to be an exceptionally difficult task in light of the degree to which sexual orientation is commingled in the minds of many with particular traits associated with gender.” More fundamentally, the judges argued, “carving out gender stereotypes related to sexual orientation ignores the fact that negative views of sexual orientation are often, if not always, rooted in the idea that men should be exclusively attracted to women and women should be exclusively attracted to men—as clear a gender stereotype as any.”

In the view of the concurring judges, “if gay, lesbian, or bisexual plaintiffs can show that they were discriminated against for failing to comply with some gender stereotype, including the stereotype that men should be exclusively attracted to women and women should be exclusively attracted to men, they have made out a cognizable sex discrimination claim. In such a case, the gender stereotype theory of discrimination would encompass discrimination on the basis of sexual orientation. In neither Simonton nor Dawson did we consider this articulation of the gender stereotype at play in sexual orientation discrimination.”

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<a href=http://www.employmentlawdaily.com/index.php/news/ofccp-audit-demands-on-google-unduly-burdensome/ target=_blank >OFCCP’s audit demands on Google found unduly burdensome</a>

By Cynthia L. Hackerott, J.D.

In a setback for the OFCCP, a Labor Department Administrative Law Judge has denied the agency’s motion for summary judgment in its high-profile administrative suit against Google Inc. The ALJ denied summary judgment because it had previously granted the OFCCP’s motion to apply expedited procedures and the regulations providing for expedited procedures do not permit such motions. In an expedited proceeding, the parties, and the ALJ, “have little time to prepare for the hearing on merits and cannot devote resources to the kind of extensive briefing that the parties filed here,” the ALJ wrote. Further, the ALJ stated that even he were to reach the merits, he would deny the motion, finding that much of the OFCCP’s data demands were unduly burdensome. In fact, the cost of meeting the agency’s demands would greatly exceed the revenue generated from Google’s government contract, the ALJ noted (OFCCP v. Google Inc., March 15, 2017, Berlin, S.B.).

Google’s federal contracts include one with the General Services Administration (GSA), awarded in June 2014, for “Advertising and Integrated Marketing Solutions,” under which Google has received over $600,000, according to the OFCCP’s complaint. In a press release announcing the suit, the OFCCP asserted that Google violated the laws enforced by the agency and breached its obligations as a federal contractor when it refused to provide the requested information as part of a routine compliance evaluation of the multinational company’s Mountain View, California headquarters. However, in the statement provided by a Google spokesperson to Employment Law Daily, the company stated that “the handful of OFCCP requests” which are the subject of the lawsuit by the agency “are overbroad in scope, or reveal confidential data,” and that the company has attempted to make this clear to the agency.

Information sought. The complaint asserts that the OFCCP initiated the review in September 2015 and, in June 2016, the agency requested the following information:

A compensation snapshot as of September 1, 2014;
Job and salary history for employees in a September 1, 2015 compensation snapshot that Google had produced and the requested September 1, 2014 snapshot, including starting salary, starting position, starting “compa-ratio,” starting job code, starting job family, starting job level, starting organization, and changes to the foregoing; and
The names and contact information for employees in the previously produced September 1, 2015 snapshot and the requested September 1, 2014 snapshot.

The ALJ pointed out that this “snapshot” included, for each of approximately 20,000 employees working at the Mountain View establishment, data falling into at least 38 categories plus “[a]ny other factors related to [c]ompensation.” He also noted that prior to the information request at issue, Google had complied with the OFCCP’s requests for “considerable records and information,” including agreeing to an onsite inspection that included interviews of more than twenty Google managers.

Google refused to produce the items and in the ensuing months, according to the complaint, the agency “repeatedly attempted to obtain Google’s agreement to produce” the items at issue. In September 2016 the agency issued a Notice to Show Cause, but the complaint, signed on December 29, 2016, alleges that, as of that date, Google has “persisted in its refusal” to produce the items at issue.

Expedited procedures. On February 21, 2017, the ALJ granted the OFCCP’s request to apply expedited hearing procedures pursuant to the agency’s regulations at 41 C.F.R. §§ 60-30.31-60-30.37. At issue in the present decision was the OFCCP’s February 7 motion for summary judgment, which the ALJ denied because the regulations establishing the expedited procedures do not permit such motions. “The regulations establishing the expedited procedures aim at focusing the parties narrowly on preparation for a relatively informal hearing on a sharply foreshortened schedule,” the ALJ explained.

Although they incorporate by reference certain specified portions of the regulatory process generally applicable in an ordinary, non-expedited case, the expedited procedures differ in several ways. For example, no formal rules of evidence apply, as they would in a routine case, and discovery is limited to requests for admissions, an exchange of witness lists, and oral depositions as allowed by the ALJ. Also, expedited procedures have no provision for pre-hearing or post-hearing motions except for permission to take depositions or to address an opposing party’s failure to respond to requests for admission. Because the expedited hearing regulations aim to provide a short, streamlined process, and these regulations expressly incorporate by reference the portions of the ordinary procedures that will apply in an expedited case, the absence of any provision for summary judgment in the expedited procedures excludes such motions from the process.

Merits. Further, the ALJ stated that even if he were to reach the merits, he would deny the motion. The OFCCP’s audit demands may be evaluated as administrative warrants or administrative subpoenas, depending on whether the agency is seeking documents and information on-site or off-site. Different standards apply to administrative warrants and subpoenas under the Fourth Amendment. For an administrative warrant to issue, the government must have either specific evidence of an existing violation or the ability to show that reasonable legislative or administrative standards, such as a general administrative plan derived from neutral sources, justify the warrant (i.e. a showing of probable cause). A lower standard applies to administrative subpoenas; under the Supreme Court’s 1984 ruling in Donovan v. Lone Steer, the Fourth Amendment requires that the subpoena be sufficiently limited in scope, relevant in purpose, and specific in directive so that compliance will not be unreasonably burdensome. The U.S. District Court for the District of Columbia applied the Lone Steer standard to an OFCCP compliance evaluation dispute in its November 2011 decision in United Space Alliance, LLC v. Solis.

Administrative subpoena review standards. In the present case, the parties agreed that the OFCCP’s request for information is akin to an administrative subpoena. Although the scope of judicial review in an administrative subpoena enforcement proceeding is quite narrow, the government must still show that: (1) Congress granted the authority to investigate; (2) the applicable procedural requirements have been followed; and (3) the evidence is relevant and material to the investigation. A court may consider a number of factors in this analysis, rather than requiring specific types of evidence on a single factor, the ALJ stated. According to the Eleventh Circuit’s 2014 ruling in EEOC v. Royal Caribbean, a court is authorized to not only consider whether the demands of the subpoena at issue would threaten normal operation of the business, but also to weigh such equitable criteria as reasonableness and oppressiveness and the balance of hardships and benefits.

Competing resources. The OFCCP argued here that the ALJ should consider that Google has huge resources, asserting that the market value of its parent corporation is over $500 billion and that it reported revenues in 2016 of $90 billion. Yet, the ALJ find none of that relevant. Google does not have access to its parent corporation’s assets, and even if it did, market capitalization is the value of the shares that shareholders hold, rather than an asset of the corporation. In addition, revenue has meaning only when compared to expenditures, he noted. Moreover, “Google has obligations other than complying with OFCCP demands.” The federal government had estimated revenues for fiscal 2016 of about $3.5 trillion, he pointed out, adding that for that fiscal year, the U.S. Department of Labor had a discretionary budget of about $13.2 billion. “But I do not expect that OFCCP could spend a significant portion of either federal revenues or the DOL budget on a single OFCCP compliance review,” he wrote.

Instead, the ALJ focused on the OFCCP’s allegation that, as of the date of the complaint, the GSA had paid Google $600,000 on this contract in two and one-half years, whereas, according to Google, compliance with just one of the OFCCP’s demands (a compilation of interview notes on about 54,000 job interviews) would cost Google over $1 million. If Google’s cost estimates are correct, and if OFCCP is entitled to an order requiring Google to comply with the full extent of its demands, “it begins to appear that the GSA contract had a poison pill that would rob Google of the benefits of the contract,” the ALJ observed. Put another way, compliance with the OFCCP’s demands would far exceed all of Google’s gross revenue under the contract.

Disproportionate. A compliance review is only an investigation to determine whether the contractor has complied with its anti-discrimination and affirmative action obligations, and the OFCCP was not prosecuting this matter based on any investigative findings of wrongdoing, the ALJ noted, adding that even if it were, proportionality—a cornerstone of discovery—could be a basis for a protective order limiting discovery. Looking at the record here, the ALJ could not conclude as a matter of law that the OFCCP’s requests in their entirety are both relevant to the compliance review and not unreasonably burdensome.

By way of example (rather than an attempt at a complete list), the ALJ noted that OFCCP’s proof fell short in certain respects. First, the records sought were unlimited as to time. Considering that Google was incorporated in 1998 and the government contract was agreed to in June 2014, the OFCCP failed to show how a starting salary 19 years ago—and 16 years before the government contract—was relevant to its compliance review. To the extent that this information was relevant, given that it concerns more than 20,000 employees whose work histories must be searched, it apparently was unreasonably burdensome, in light of its extremely limited possible relevance. Therefore, the ALJ could not decide the question on summary decision.

Google did not take advantage of the OFCCP’s Functional Affirmative Action Plan program, which would have allowed the contractor to develop an affirmative action plan that would be based on employees’ functions rather than the geographically based establishment in which they work—and which might thereby have limited the breadth of the company’s affirmative action plan. Consequently, the OFCCP was acting within its authority to define the scope of the compliance review to include Google’s entire Mountain View workforce, the ALJ found. The OFCCP “need not engage in an iterative process with Google, explaining the status of the investigation when it requests further information.” Nonetheless, due to the broad scope of the compliance review OFCCP has elected to do, the ALJ determined that an issue was presented as to whether the OFCCP had requested so much material as to be unduly or unreasonably burdensome, when less would be sufficient.

Second, even though it met the deferential standard for relevance, the requested “snapshot” would require Google to produce extensive detailed records for each of over 19,000 employees, the ALJ observed, providing a list detailing the data requested. Even accepting that Google has extraordinary capability to search and create databases, the OFCCP’s request that this extensive information be supplied for a second “snapshot” date requires some showing that it would not be unduly burdensome. “Had GSA paid Google $600 million on this contract, not $600,000, it would be a different analysis,” he wrote, “but that is not the history of this contract.”

Moreover, the “snapshot” request contained a requirement that lacked any specificity: the OFCCP demand that, for the thousands of employees, Google add to the requested database “[a]ny other factors related to [c]ompensation.” As noted above, the OFCCP interviewed a significant number of Google managers; it should have asked them what factors Google considers when setting compensation, the ALJ said. It also could ask Google to prepare a list of factors it considers when setting compensation. “But Google is not required to anticipate what OFCCP might someday conclude is ‘related to compensation’ and therefore should have been produced,” he admonished.

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