June 2015, Page 4 Archive

There are two main takeaways for employers from the Supreme Court’s ruling to allow the highly publicized religious discrimination case against Abercrombie & Fitch to gain new life. 

The takeaways are:

1. Employers can’t take an adverse action against an employee or job applicant when the motivation behind the action is to avoid having to accommodate one of the person’s religious practices. The Supreme Court ruled that employers have to explore possible religious accommodations when they have at least some idea that a person would require such an accommodation.
2. Employees and job applicants don’t need to explicitly state the need for a religious accommodation to trigger an employer’s obligation to seek out possible accommodations. Again, the High Court ruled all an employer needs is an inkling that a person would need a religious accommodation for that employer to then be required to consider accommodations.

Woman didn’t conform to ‘Look Policy’

The case involved Samantha Elauf, who applied for a job at the Abercrombie & Fitch clothing store in her hometown of Tulsa, OK.

Elauf wore a head scarf, known as a hijab, as part of her Muslim faith.

The company declined to hire her, claiming the scarf clashed with its “Look Policy” — or dress code — which banned head coverings.

The policy called for employees to have a “classic East Coast collegiate style.”

Elauf then filed a charge with the EEOC, alleging religious discrimination. The EEOC then filed a religious discrimination lawsuit against Abercrombie on her behalf.

The EEOC claimed the company refused to hire her due to her religion and illegally failed to accommodate her religious practice by creating a reasonable exception to its “Look Policy.”

In district court, the EEOC prevailed. It was awarded summary judgment and a jury awarded Elauf $20,000 in damages. The jury ruled that Abercrombie knew about her religious practice and refused to hire her as a result.

But Abercrombie prevailed in appeals court by claiming it didn’t have to relax its “Look Policy” because Elauf never asked it to do so — or even mentioned her religion. Abercrombie argued that Elauf needed to provide explicit, verbal notice of a conflict between the policy and her religious practice.

In siding with Abercrombie, the Tenth Circuit Court of Appeals vacated the earlier jury verdict.

The EEOC then asked the Supreme Court to hear its case, and the court agreed to.

‘Specific request not required’

In an 8-1 decision, the Supreme Court ruled in favor of the EEOC, saying Elauf was not required to make a specific request for a religious accommodation.

The court majority said there was enough evidence to show that Abercrombie knew she wore the head scarf as part of her religious practice and refused to hire her to avoid having to accommodate her religious practice.

As a result, the Tenth Circuit has been asked to rehear the case through the lens of the rational used by the Supreme Court.

The High Court’s ruling also stated that if an employer has an idea that an individual would need a religious accommodation, the employer is obligated to explore whether it could reasonably grant such an accommodation — and Abercrombie failed to do that.

Justice Clarence Thomas was the lone dissenter. He wrote in his opinion that Abercrombie’s “Look Policy,” on its face, was neutral — and, therefore, it couldn’t be used as a basis for a religious discrimination lawsuit.

Cite: EEOC v. Abercrombie & Fitch Stores Inc.

Does the EEOC have your email address? It’s going to want it. 

The reason: It’s converting to an all-digital complaint system. So, in the near future, employers will no longer receive paper notices when harassment or discrimination charges are filed against them.

Under the new system, dubbed the “Digital Charge System,” employers will be notified via email when an EEOC charge has been filed against them.

The email will contain a link to a secure online portal, through which employers can:

• view and download the charges against them
• review invitations to mediate and respond to charges
• submit legal representation info
• submit position statements, and
• otherwise communicate with the EEOC.

When?

The EEOC is currently in “Phase One” of its conversion to the digital system.

Currently, 11 of its 53 field offices are using the new system.

This includes:

• Charlotte, NC
• Denver
• Detroit
• Greensboro, NC
• Greenville, SC
• Indianapolis
• Norfolk, VA
• Phoenix
• Raleigh, NC
• Richmond, VA
• San Francisco

By October 2015, the EEOC expects all of its field offices to be using the new system.

If the EEOC doesn’t have your email address, it’ll mail a paper notice to inform you of any charges filed against you and provide instructions for logging into the portal.

What’s next?

Besides rolling the system out to the rest of its field offices, the EEOC also plans to also establish a secure portal for individuals who file a charge of employment discrimination.

Translation: It sounds like it’s about to get easier for employees to file charges with the EEOC and follow up on them.

Many employers rely on the services of a third-party to ensure their benefit plans are in compliance with the sprectrum of applicable state and federal regs. But a new report suggests one particular type of TPA just isn’t hacking it.  

The recent DOL Employee Benefits Security Administration’s (EBSA) report, Assessing the Quality of Employee Benefit Plan Audits, found that just 61% of audits conducted by Certified Public Accounts (CPAs) fully complied with professional auditing standards or had only minor deficiencies.

That means the remaining 41% (nearly half) of the audits the agency reviewed had major deficiencies. And those major deficiencies put $653 billion and 22.5 million plan participants at risk.

The report used a fairly large sample to arrive at those findings. The agency’s report looked at audits of more 81,000 employee benefit plans conducted by more than 7,300 licensed CPAs.

According to DOL Security Phyllis C. Borzi:

The existing patchwork of regulations and rules needs to be overhauled and a meaningful enforcement mechanism needs to be created. The department is proposing, among other measures, legislation that will fix these problems.

Specifically, the DOL is recommending that Congress update ERISA’s definition of “qualified public accountant” to include more requirements and qualifications that would improve the quality of plan audits.

The report also suggests that ERISA should be changed to give its Secretary of Labor the authority to establish accounting principles and audit standards to protect the integrity of employee benefit plans and the benefit security of participants and beneficiaries.

The CPA response

For its part, the American Institute of Certified Public Accountants (AICPA) took responsibility for the DOL’s findings and even offered some steps it was taking to remedy the problem.

One example: Early next year, the AICPA will launch an employee benefit plan certificate program so its practitioners can show their competency. And AICPA vice president for public practice and global alliances, Sue Coffey, said:

Our [AICPA} recently issued Six-Point Plan to Improve Audits will help our members stay focused on achieving the highest level of performance for financial statement audits. Further, our Employee Benefit Plan Audit Quality Center offers members best practice tools and resources that help improve the quality of audit engagement in this area.

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