1. Year End Employment Law Update: What Happened in 2010 and What Is Expected in 2011? Presented by: Richard I. Greenberg Jackson Lewis LLP 212-545-4000

2. 2 Overview of Seminar  Legislation Enacted in 2010  2010 Regulatory Developments  Litigation Trends  The New National Labor Relations Board  What’s On The Horizon? 2

3. 3 2010 Enacted Federal Legislation  The Genetic Information Non-Discrimination Act (GINA) (Final Regulations Issued By EEOC)  Health Care Overhaul Legislation (Most requirements do not go into effect until 2012)  Additional Whistleblower Protections in Financial and Other Industries  HIRE Act 3

4. 4 GINA  Title I covers group health insurance.  Title II covers employment practices.  Administered by EEOC.  Although signed into law in 2008, Final Regulations were released November 9, 2010.  Bars employers from requiring, requesting and obtaining genetic information.  Genetic information includes information about the manifestation of diseases in family members (i.e., family medical history).  Damages same as Title VII and ADA. 4

5. 5 Employment Practices Driving GINA Risks  Medical examinations  Pre-employment/Post-Offer  Fitness for duty  In response to reasonable accommodation requests  Return to work  FMLA medical certifications  Safe harbor for employers who give written notice to medical professionals that they are not seeking “genetic information”  Acquisition of genetic information during casual conversation (overhear is okay … just don’t actively listen!).  Improper recordkeeping or disclosure of genetic information. 5

6. 6 Health Care Reform–Employer/Group Health Provider Mandate Timeline  “Immediate” (with some exceptions for grandfathered plans)  Eliminate life-time dollar limits on “essential benefits.”  Can’t rescind coverage except in case of fraud.  Certain preventive care must be covered with no cost-sharing.  Cover children to age 26 … even if married.  Insured plans cannot discriminate in favor of highly compensated employees.  No pre-existing condition exclusion for children services. 6

7. 7 Health Care Reform–Employer/Group Health Provider Mandate Timeline (Con’t.)  “Immediate” (with some exceptions for grandfathered plans)  Appeals process requirements.  Emergency service requirements.  Anti-dumping restrictions.  OB/Gyn and pediatrician designation requirements. 7

8. 8 Health Care Reform–Employer/Group Health Provider Mandate Timeline (Con’t.) Effective 2011  Must report the value of each employee’s ER-provided health coverage on W-2.  Health FSAs, HSAs, HRAs cannot reimburse or provide tax-free reimbursement for over-the-counter drugs. Effective 2012  Must comply with standardized summary of benefit disclosure rules to be developed.  60-day notice of material change.  Quality reporting to HHS and participants. 8

9. 9 Amendment to the FLSA – Included in Health Care Reform Act  Employers covered by the Fair Labor Standards Act are required to furnish “reasonable” breaks to “non-exempt” mothers to express milk for their infants who are up to one year old.  This new 29 U.S.C. 207(r)(1) of the FLSA also requires employers to furnish a private space, other than a restroom, for mothers to express milk. The provision does not apply to employers with less than 50 employees if its requirements would “impose an undue hardship by causing the employer significant difficulty or expense.”  Breaks can be paid or unpaid.  Some states have already enacted similar laws. These laws often cover all employees and provide rights for more than 1 year. 9

10. 10 2010 Enacted State Legislation  California  Massachusetts  New York 10

11. 11 2010 Enacted State Legislation (Con’t.)  California  Background Checks - Effective January 11, 2011, a business must ensure that any individuals in California on whom it conducts a background check through a consumer reporting agency are provided with the Internet Web site address or telephone number of the investigative consumer reporting agency where the consumer may find additional information about the agency's privacy practices. - Governor vetoed anti-credit check legislation. 11

12. 12 2010 Enacted State Legislation (Con’t.)  Massachusetts  Personnel Records Statute - An employer must give an employee notice any time it submits negative information to an employee’s personnel file that “is, has been or may be used to negatively impact the employee’s qualification for employment, promotion, transfer, additional compensation or the possibility that the employee will be subject to disciplinary action.”  Criminal Offender Record Information Law - Prior to the interview phase of the hiring procedure, an employer may not seek disclosure of an applicant’s criminal history on an employment application or any written document. 12

13. 13 2010 Enacted State Legislation (Con’t.)  New York  Domestic Workers Bill of Rights - The first state law of its type in the nation, this measure provides domestic workers with the right to overtime pay after 40 hours of work per week, or 44 hours for in- home workers, a rest day once every calendar week (or overtime pay if the day of rest is waived by the worker), three paid days of rest per year after a worker has been employed for one year, protection from harassment under the New York State Human Rights Law and the same right to statutory disability benefits as other workers.  Funeral Leave Benefits for Same Sex Couples - If an employer grants funeral or bereavement leave to an employee for the "death of a spouse, child, parent or other relative, [it] shall not deny the same leave for the death of an employee's same-sex committed partner." Same-sex committed partners are defined as those "who are financially and emotionally interdependent in a manner commonly presumed of spouses.“ 13

14. 14 2010 Enacted State Legislation (Con’t.)  New York (con’t)  Construction Industry Misclassification Act - Creates a presumption that construction workers are employees unless three criteria are met: they are "free from control and direction in performing the job, both under his or her contract and in fact;" their services "must be performed outside the usual course of business for which the service is performed;" and they are "customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue." Construction industry employers are mandated to provide workers with notification of their classification status. Employers who violate the law are subject to monetary and criminal sanctions.  Wage Theft Bill – just signed by Governor. 14

15. 15  Federal  Employee Free Choice Act (would have significantly modified the union organizing process).  Paycheck Fairness Act (would have implemented sweeping changes to the Equal Pay Act of 1963 (EPA), and would have required employers to demonstrate that any pay differential is based on a “bona fide factor other than sex, such as education, training, or experience” and is “consistent with business necessity.”)  State  Anti-bullying statutes in New York and other states. Legislation That Was Not Enacted 15

16. 16 2010 Regulatory Developments  Very Aggressive EEOC  Aggressive USDOL  Pro-Labor NLRB  Aggressive ICE  State Focus on Misclassification  State Focus on Privacy Protections 16

17. 17 Very Aggressive EEOC  Focus on Systemic Discrimination.  Beware of Per Se Leave Limitations for Medical Leaves.  Recent Guidance on What Employers Should Include In Harassment Policies.  Assessment of Legality of Workplace English-Only Policies. 17

18. 18 Aggressive USDOL  Employee Misclassification  Executive Order 13496  Requires covered federal contractors and subcontractors to post a notice informing employees of the right to unionize and to engage in certain protected activities under the National Labor Relations Act (“NLRA”).  With just over two years left in President Obama’s first term, this is the best opportunity for the administration to promote its aggressive enforcement agenda.  New Partnership with ABA to provide wage claimants with referrals to private attorneys.  Prosecutor just nominated to be wage and hour administrator. 18

19. 19 Litigation Trends  ADAAA Cases.  Family Responsibilities Discrimination (“FRD“)  Using Title VII, PDA, ADA, FMLA, and state common law to achieve gender equity and workplace “flexibility.”  Class Claims  Continued Wage and Hour Claims  Continued Busy EEOC 19

20. 20 Litigation Trends (Con’t.)  ADAAA  Reinstates broad scope of ADA’s protection.  Rejects U.S. Supreme Court cases narrowly interpreting “disability” and EEOC regulations interpreting “substantially limited.”  “Disability” should not require extensive analysis.  Focus of ADA cases is whether businesses complied with their ADA obligations, not whether an individual has a “disability.”  Instructs EEOC to revise the definition of the term “substantially limits” to reflect the ADA and the ADAAA.  Pro-employee case law developing. 20

21. 21 Litigation Trends (Con’t.)  FRD Claims highlight emerging theories of legal liability:  Gender stereotyping  Benign discrimination  Association discrimination  “Unconscious” bias  400% increase in “FRD” claims from 1996-2006.  Higher win rate and level of recovery in FRD cases. 21

22. 22 Litigation Trends (Con’t.)  Recent FRD Case  Velez v. Novartis Corp.- The Largest Sex Discrimination Case to Go to a Jury (May 2010).  A jury awarded $250 million in punitive damages to a class of 5,600 current and former U.S. female employees who accused the company of discriminating against them with respect to pay, promotions, and pregnancy.  The jury awarded an additional $3.4 million in compensatory damages to the twelve named female class members. 22

23. 23 Litigation Trends (Con’t.)  Velez v. Novartis Corp. (Con’t.)  Novartis agreed to settle the case for $152.5 million.  $60 million in back pay  $40 million in compensatory damages  Novartis won’t oppose $40 million request for attorneys fees  Novartis agreed to spend $22.5 million over three years to: - improve its personnel policies - revise its sexual harassment policies and training - strengthen its employee complaint process - hire an outside specialist to help it identify gender pay disparities in the company, and - revise its performance management process. 23

24. 24 Litigation Trends (Con’t.)  Other Class Claims  Dukes v. Wal-Mart (Pending Before Supreme Court) - Whether class treatment is appropriate for the millions of class members collectively seeking billions of dollars in monetary relief under Title VII of the Civil Rights Act of 1964, claiming that tens of thousands of Wal-Mart managers inflicted monetary injury on each and every individual class member in the same manner by intentionally discriminating against them because of their sex, in violation of the company’s express anti-discrimination policy.  Supreme Court to analyze whether certification of class was appropriate. 24

25. 25 Litigation Trends (Con’t.)  Of course, Wage and Hour Litigation Continues Unabated  Theories include: - Donning and Doffing - Employee Misclassification - Off-the-clock work 25

26. 26 Litigation Trends (Con’t.)  EEOC Remains Busy  99,922 private sector charges of discrimination filed in FY 2010.  Recent surge may be due to many factors, including:  Economic conditions/lay-offs  Greater awareness of the laws  Systemic discrimination program continues to be a priority with the EEOC.  Total monetary relief recovered by the EEOC in 2010 through enforcement, mediation and litigation equaled $319 million. 26

27. 27 Litigation Trends (Con’t.)  The Absurd  Employers in California may be at risk for significant penalties under California’s requirement that employees be provided with “suitable seating,” under a ruling of a state appeals court in Bright v. 99¢ Only Stores, No. B220016 (Cal. Ct. App. Nov. 12, 2010). The case was brought under state Industrial Welfare Commission (“IWC”) Wage Order No. 7-2001(14), specifying the requirement, and the Labor Code’s Private Attorneys General Act (“PAGA”), which permits aggrieved employees to sue for civil penalties for a violation of the state Labor Code.  Case arose after cashier in retail store alleged she was not provided a seat while on the job. 27

28. 28 The New NLRB  New NLRB includes 3-1 Democratic majority  More pro-employee decisions likely to be issued by the Board.  For example, the Board recently found that bannering at or near a neutral employer’s establishment urging the public not to patronize that employer because of the union’s dispute with a primary employer doing business with the neutral or its affiliate is lawful.  Can Affect All Employers  Even non-unionized employers face scrutiny from the Board if they promulgate overbroad policies which might restrict employees’ rights to engage in protected concerted activity.  Recent focus on employers’ overbroad social media policies. 28

29. 29 What’s On The Horizon?  Federal Legislation – Nothing significant is likely in 2011 unless there is a significant change in the political climate.  State Legislation – Populist agendas may be restricted due to a Republican insurgence in state legislatures.  Regulatory – Administration has indicated its policies will continue unabated. Expect uptick in Federal and State DOL audits. 29

30. 30 THANK YOU FOR YOUR TIME  We Hope This Year’s Program Was Informative.  Please Pass On Any Ideas For 2011 Programs.  Happy Holidays!  Questions 30

31. 31 THANK YOU FOR YOUR TIME! ANY QUESTIONS? THANK YOU FOR YOUR TIME!

32. 32 THE MATERIAL CONTAINED IN THIS PRESENTATION WAS PREPARED BY THE LAW FIRM OF JACKSON LEWIS LLP FOR THE ATTENDEES’ OWN REFERENCE IN CONNECTION WITH THIS SEMINAR. SINCE THE MATERIAL AND RELATED DISCUSSIONS ARE INFORMATIONAL AND EDUCATIONAL IN NATURE AND REPRESENT THE SPEAKER’S OWN VIEWS, ATTENDEES SHOULD CONSULT WITH COUNSEL BEFORE TAKING ANY ACTIONS AND SHOULD NOT CONSIDER THESE MATERIALS OR RELATED DISCUSSIONS TO BE LEGAL OR OTHER ADVICE. PROFESSIONAL ADVICE SHOULD BE OBTAINED BEFORE ATTEMPTING TO ADDRESS ANY LEGAL SITUATION OR PROBLEM. 32