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Crowdstaffing featured as Rising Star and Premium Usability HR platform in 2019

Crowdstaffing has earned the prestigious 2019 Rising Star & Premium Usability Awards from FinancesOnline, a popular B2B software review platform. This recognition is given out annually to products[...]

May 13, 2019

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When The Worlds of Title VII and the Affordable Care Act Collide: The Hobby Lobby Effect


In following current events over the past four years, it’s hard to deny that two issues in particular have become the most prominent and polarizing in the United States: those involving the equal protection of an individual’s civil rights and those affecting health care. These debates aren’t limited to advocates, pundits, politicians and journalists. They have become passionate topics of discussion within the employment industry, as well. In fact, a quick scan of industry news aggregators reveals two headlines that stand out right away: Title VII of the Civil Rights Act and the Affordable Care Act (ACA). If you want to think of one issue as “milk chocolate” and the other issue as “creamy peanut butter,” then the Supreme Court’s landmark ruling in Burwell v. Hobby Lobby Stores, Inc., may just have created one big, messy Reese’s Peanut Butter Cup.

The Hobby Lobby slippery slope

On June 30, the Supreme Court established a controversial new precedent in a slim 5-4 ruling that granted corporations with deeply held religious convictions the legal right to opt out of the Affordable Care Act’s (ACA) requirement to provide contraceptive health care. Hobby Lobby, a crafts retailer operated by the Green family, no longer needs to provide coverage for birth control after a narrow majority of justices determined it would violate the owners’ beliefs under the Religious Freedoms Restoration Act of 1993 (RFRA), which prohibits the federal government from substantially burdening a person’s free exercise of religion unless doing so becomes the least restrictive means possible.

Because closely held companies are deemed “people” under the concept of “corporate personhood,” the court’s five conservative judges found that the RFRA could be applied to a commercial enterprise’s exercise of religion, although that was never the intent of the Act or its framers.

The government already provides exemptions to religious institutions. Hobby Lobby, however, is not such an establishment; it’s an arts and crafts merchandiser. The troubling question confronting many people now, including four of the nine Supreme Court justices, is how the ruling could impact Title VII and other anti-discrimination laws. They also expressed concern that the entire focus seems to be on a corporation’s rights as a person. What about the rights and views of the diversed who must work under these new conditions? What about their personal beliefs? 

Corporations are not the only “people” at the corporation.

In her dissent, Justice Ginsburg presented chilling examples of how the decision could potentially allow employers with religiously grounded objections to deny coverage for:

• Blood transfusions (Jehovah’s Witnesses)

• Antidepressants (Scientologists)

• Medications derived from pigs, including anesthesia, intravenous fluids and pills coated with gelatin (certain Muslims, Jews and Hindus)

• Vaccinations (Christian Scientists and others)

Jon Hyman, partner in the Labor & Employment group of Kohrman Jackson & Krantz, questioned whether a company’s sincerely held religious beliefs could transcend the ACA issue, ultimately allowing it to discriminate based on race or segregate male and female workers. “I agree, however, with Justice Ginsburg, that we need to worry about how companies will try to use this opinion to opt out of laws they do not like,” Hyman said. “I am concerned that this opinion could lead to a slippery slope of companies using religion to pick and choose laws based on their socio-political beliefs, which could undermine our civil-rights laws.”

Max Mihelich, associate editor of Workforce, also called out the irony of the decision: “The Green family will now be allowed to impose their own religious beliefs on female Hobby Lobby employees – who may disagree with the family when it comes to religion... What about a woman’s right to practice a religion different than the Green’s – or even no religion, for that matter?”

Are people making a mountain out of a molehill?

One attorney’s editorial in SIA’s Staffing Stream would seem to downplay the Hobby Lobby tale as more hype than cautionary. He writes that the decision holds no special significance for staffing apart from potentially benefiting “thousands of staffing firms” that would like to seek exemptions for religious convictions. He also notes that “this decision applies only to the ACA contraceptive mandate and should not be understood to apply to all insurance mandates – like vaccinations and blood transfusions.”

While it’s true that Justice Alito said this case is “concerned solely with the contraceptive mandate,” the court’s decision did not resolve or rule out any of the other concerns that have been raised, including Justice Ginsburg’s. The judgment merely stated that all other coverage requirements or exemptions, such as immunizations or transfusions, would need to be evaluated on their own and would involve different arguments. In other words, nothing is off the table. And future exemptions may not be limited to ACA provisions.

Title VII of the Civil Rights Act

Title VII protections were enacted to prohibit discrimination on the basis of race, color, sex, religion or national origin. Because temporary workers have become a standard and familiar part of the workforce for most companies, and because the work they perform occurs on a site neither operated nor managed by their actual employer (the staffing company), determining liability for Title VII violations becomes a complicated matter. As DCR Workforce observed in a June 23 post: “The question that arises in all this, in the context of a temporary worker is: who is the employer? If the temporary worker reports the on-site employer’s unlawful practices, and the staffing agency is then asked to terminate the worker, will the worker be protected by Title VII rights?”

Recently rendered legal decisions have adopted the stance of applying joint liability to staffing providers and onsite client employers to protect contingent talent. For OSHA and workers compensation claims, the co-employment issue can be seen more favorably. The worker is protected, and neither the staffing firm nor client company bears the full brunt of claims when situations arise.

Discrimination cases, however, are much murkier. And the Hobby Lobby decision -- with its ambiguous implications on Title VII compliance -- has certainly contributed to the uncertainty. It’s also put corporations like Hobby Lobby at more risk than they may have realized: the decision effectively pierces the corporate veil. In other words, if a company is not truly separate from its owners, those individuals become legally responsible for its debts, penalties and other financial burdens. This transfer of corporate liability to the owners is fundamentally antithetical to the entire concept of incorporation. For that reason, it’s essential that staffing professionals work closely with clients to maintain a vigilant and committed stance to protecting the rights of the talent.

Ensuring an environment free from discrimination and risk

The U.S. Equal Employment Opportunity Commission (EEOC) holds that “staffing firm workers are generally covered under the anti- discrimination statutes.” If both the staffing firm and its client have the right to control the worker, and each has the statutory minimum number of employees, they are covered as “joint employers.” So just as the staffing agency must place its talent with any particular client in a non-discriminatory manner, the client must treat the workers in a non-discriminatory manner.

• If you learn of a violation at a client site, take any corrective action within your control immediately. Otherwise, you could be found jointly liable for the discrimination.

• Never follow a discriminatory assignment request or preference, such as administering tests unrelated to the job that may disproportionately exclude members of a protected class.

• Ensure that male and female talent receive equal pay for equal work.

• Never agree to provide talent who meet requirements that could be deemed discriminatory, such as placing workers of a specific gender, race or age group.

• Work with clients to include coverage of temporary workers in the administration of their antidiscrimination policies.

• Be sure to count all temporary workers with whom you have a legal relationship.

• Take steps to prevent disparate treatment of workers based on protected class or religion in all aspects of employment: recruitment, hiring, promotion, benefits, training, job duties, termination, etc.

• Work with clients to make reasonable accommodation for workers’ religious practices and observances, where it does not cause undue hardship for the business.

• Ensure that workers are not being segregated based on protected class or religion.

• Ensure that no worker is retaliated against for requesting an accommodation (whether or not granted); for filing a discrimination charge with the EEOC; for testifying, assisting or participating in an EEOC investigation or EEO proceeding; or for opposing discrimination.

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