Legal Report June 2017
U.S. JUDICIAL DECISIONS.
Hostile Environment. Hugs in the workplace may create a sexually hostile work environment under Title VII of the Civil Rights Act, a U.S. federal court of appeals ruled.
The ruling stems from a case brought by Victoria Zetwick, a California Yolo County correctional officer, who alleged that County Sheriff Edward G. Prieto created a sexually hostile work environment by greeting her with unwelcome hugs. This occurred on more than 100 occasions, along with at least one kiss, over a 12-year period, according to court documents.
Zetwick also claimed that between 1999 and 2013, she saw Prieto hug and kiss several dozen female employees—but not hug male employees. Instead, Prieto gave male employees handshakes.
This behavior, Zetwick said, made it difficult for her to concentrate at work because she was “constantly stressed and anxious about Prieto’s touching, which she believed had sexual overtones,” according to court documents.
Zetwick filed an administrative claim in 2012, but after it went nowhere she filed suit against Yolo County and Prieto, which included federal and state charges of sexual harassment and failure to prevent sexual harassment.
The county and Prieto denied the claims, arguing that the sheriff’s behavior was due to “genuine but innocuous differences in the ways men and women routinely interact with members of the same sex and the opposite sex.” The district court agreed, and in 2014 it dismissed Zetwick’s lawsuit.
Zetwick appealed the court’s decision, which ultimately reached the U.S. Ninth Circuit Court of Appeals. The appeals court found that the district court had applied incorrect legal standards, and remanded the case back to a lower court.
“We hold that, giving the record proper consideration, a reasonable juror could conclude that the differences in hugging of men and women were not, as the defendants argue, just ‘genuine but innocuous differences in the ways men and women routinely interact with members of the same sex and of the opposite sex,’” the appeals court explained.
The appeals court also added that it could “not accept the conclusion” that Zetwick did not have an actionable claim of sexually hostile work environment, because Prieto’s conduct altered the conditions of her surroundings to create an abusive work environment.
This can be seen, the appeals court explained, in Zetwick’s testimony that “Prieto hugged her more than 100 times over the period from 1999 to 2012, that he hugged female employees much more often than male employees, and, indeed, from Zetwick’s observations, he hugged female employees exclusively.”
Zetwick’s case will now be sent back to a lower court for a trial on her claims of sexual harassment. (Zetwick v. County of Yolo, U.S. Court of Appeals for the Ninth Circuit, No. 14-17341, 2017)
Inspection. A global oil and gas production services provider will pay $9 million for falsifying safety inspections and violating the U.S. Clean Water Act.
In a plea agreement with the U.S. Department of Justice (DOJ), Wood Group PSN Inc. admitted that between April 2011 and July 2014, employees failed to inspect and maintain facilities they had contracts with on the Gulf of Mexico’s Outer Continental Shelf’s Creole Loop. Instead, the company said that facilities were properly inspected and maintained, according to U.S. safety and environmental regulations.
“The company operators at the [Wood Group] office had trouble keeping up with the inspections and maintenance on facilities they serviced,” according to the DOJ. “The office did not have sufficient labor and transportation, and the work was not always completed on time. The employees, from operators to clerks, then falsified reports to the Bureau of Safety and Environmental Enforcement. The company admitted to 87 violations on offshore platforms.”
The DOJ began investigating the Wood Group following an explosion at the Black Elk Energy Offshore Operations rig—which contracted with the Wood Group to provide hot work permits for welding—that killed three workers and seriously injured several others, and caused oil to discharge into the Gulf of Mexico.
As part of the plea agreement, Wood Group also admitted that its employees were negligent in the way they authorized hot work on the rig and that a lack of communication between personnel contributed to the events that caused oil to be discharged into the Gulf in a “harmful quantity.” The company agreed to pay $1.8 million for the discharge and subsequent violation of the Clean Water Act. (U.S. v. Wood Group, U.S. District Court for the Western District of Louisiana Lafayette Division, No. 6:16-00192, 2017)
Cybersecurity. China released amendments to its law on commercial bribery that would reduce some of the more far-reaching changes of previously released versions of the amendments.
The new amendments address China’s 1993 Anti-Unfair Competition Law (AUCL) and clarify that companies “may not use money or property or other means to bribe a counterparty to a transaction or a third party that can influence a transaction,” according to a draft obtained by the FCPA Blog. “A counterparty to a transaction or a third party that can influence a transaction shall not take bribes.”
The amendments also introduce books and records requirements, requiring givers and receivers to record discounts or commissions; removes provisions for willful blindness and facilitation; and imposes monetary fines of RMB 100,000 to 3 million ($15,000 to $435,000), among other changes.
The amendments were in an open comment period until March 25.
VEILS. Lawmakers in the German state of Bavaria introduced legislation that would ban full-face veils in government workplaces, schools, universities, and while driving.
The bill, which covers niqabs (face-covering veils) and burkas (face and body veils), would ban the coverings in public institutions, during police interactions, and at polling stations.
The move to ban the coverings follows appeals by German Chancellor Angela Merkel to ban full-face veils where legally possible in Germany. If enacted, Bavaria would join France, Austria, Belgium, and Turkey, which have all banned full-face veils in some public places.
HUMAN RIGHTS. The U.K. House of Commons passed a bill that expands the U.K. government’s powers to freeze the assets of human rights violators.
The bill, called the Magnitsky amendment, amends the Criminal Finances Bill to expand the definition of “unlawful conduct” to include human rights abuses, and broadens the application of the definition to include those who profited from or assisted in the abuse.
If the House of Lords passes the bill, the United Kingdom will follow Estonia and the United States, which previously passed the measure following the detention, abuse, and death of Sergei Magnitsky—a lawyer who died in custody after uncovering tax fraud involving the Russian government.
NonProfits. Ranking Member of the U.S. House Homeland Security Committee Rep. Bennie G. Thompson (D-MS) introduced a bill that would give nonprofit organizations access to grant funds to prevent terrorist attacks.
The bill (H.R. 1486) would authorize $30 million in grants for nonprofit organizations that the U.S. Department of Homeland Security deems to be at risk of a terrorist attack. The funds could be used to purchase security equipment, physical and cybersecurity training, target hardening, and terrorism awareness.
Thompson introduced the legislation following a recent increase in threats, harassment, and attacks on nonprofit organizations. “We owe it to our constituents to do all we can to protect community centers and nonprofit organizations that allow Americans to safely congregate, worship, or engage in other community activities,” Thompson said in a statement.
The bill has no cosponsors and was referred to the U.S. House Homeland Security Committee.
ELSEWHERE IN THE COURTS
EU employers can prohibit workers from wearing visible religious symbols at work because it does not constitute “direct discrimination,” the EU high court ruled. The court found that companies with legitimate reasons to project a neutral image could ban political, philosophical, or religious symbols in the workplace—including headscarves. “However, in the absence of such a rule, the willingness of an employer to take account of the wishes of a customer no longer to have the employer’s services provided by a worker wearing an Islamic headscarf cannot be considered an occupational requirement that could rule out discrimination,” the EU Court of Justice explained. (Bougnaoui v. Micropole SA, European Court of Justice, No. C-188/15, 2017)
A U.S. district court dismissed a case against Walmart Stores Inc. that accused the retailer of defrauding shareholders in its Walmart Mexico unit by concealing suspected bribery of public officials. In her ruling, District Court Judge Katherine Polk Failla rejected the plaintiffs’ argument that two Walmart executives were notified of the alleged bribery because a senior audit executive reported it to them. (Fogel v. Wal-Mart de Mexico, U.S. District Court for the Southern District of New York, No. 13-02282, 2017)
Nestle Waters North America—a division of Nestle Waters—will pay $300,000 and additional relief to settle a sex discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC alleged that Nestle violated antidiscrimination laws when it did not promote a 20-year veteran employee because of her gender. Instead, Nestle filled the new position with a male employee who did not meet the minimum requirements for the role, according to Nestle’s job description, and later fired the veteran employee as part of a consolidation. (EEOC v. Nestle Waters North America, U.S. District Court for the Middle District of Florida Tampa Division, No. 8:15-cv-2197-RAL-TGW, 2017)
U.S. STATE LEGISLATION
Trafficking. California lawmakers introduced three bills that would impose human trafficking obligations on the lodging industry.
A.B. 260 would require California hotels, motels, inns, bed and breakfasts, and transient lodgings to post a notice on information related to human trafficking that includes a hotline to access help and services. Many other businesses in California are already required to post this notice, and failure to do so can result in a $500 civil penalty.
S.B. 225 is similar to A.B. 260, but would allow notices posted in California businesses and lodging establishments to include information on how to text a human trafficking hotline.
The third bill, S.B. 270, would require hotels and motels to train their employees on how to identify human trafficking victims and report them to the appropriate enforcement agency. The California Department of Justice would create the training program, which would be approved and posted on its website by July 1, 2018. Hotels and motels would be expected to incorporate the training into the initial training process for new hires by January 1, 2019.