The first Monday in October marks the start of a new term for the US Supreme Court and the court will review a Title VII gender discrimination case. Bipartisan legislation has been introduced that would allow Section 529 plans to be used for expenses for workplace training certification and credentialing programs. A US district court dismissed a challenge to the recent rule issued by the Department of Labor allowing the consideration of environmental, social, and governance factors when making investment decisions. The Equal Employment Opportunity Commission (EEOC) has released its strategic enforcement plan for the next four fiscal years.
Supreme Court Begins New Term – The 2023 – 2024 term of the U.S. Supreme Court began on October 2nd. So far, the Supreme Court has one employment case on its docket and the court will be adding additional cases. The employment case it has accepted, Muldrow v. City of St. Louis, involves a transfer of a female sergeant by the police department which it was alleged constituted gender discrimination in violation of Title VII of the Civil Rights Act of 1964. The case is on appeal from the US Court of Appeals for the Eighth Circuit, which affirmed a District Court’s summary judgment in favor of the City of St. Louis. In finding that the evidence did not establish that the transfer was an adverse employment action, the Eighth Circuit stated that it “did not result in a diminution to her title, salary, or benefits. She offers no evidence that she suffered a significant change in working conditions or responsibilities and, at most, expresses a mere preference for one position over the other.”
Jaytonya Clayborn Muldrow worked as a sergeant with the St. Louis Police Department. She was assigned to the Intelligence Division and when a new commander was appointed in 2017 to this division, he transferred 22 officers (17 males and 5 females) including Sergeant Muldrow. While her pay remained the same, instead of working a Monday – Friday daytime schedule, her new position required her to work a rotating schedule including weekends. In 2018, Sergeant Muldrow was transferred back to the Intelligence Division. She filed this lawsuit alleging that her transfer constituted gender discrimination. The Supreme Court decided to review the case and limited the inquiry to “Whether Title VII of the Civil Rights Act of 1964 prohibits discrimination in transfer decisions absent a separate court determination that the transfer decision caused a significant disadvantage.” The Supreme Court has not set a date for oral argument.
Workforce Legislation Introduced – The bipartisan Freedom to Invest in Tomorrow’s Workforce (H.R. 1477, S. 722) legislation has been introduced. The bill would expand the programs for which Section 529 plans could be used to include workforce training certification and credentialing programs. Section 529 of the Internal Revenue Code provides for the establishment of tax-advantaged education savings accounts that can be used for college, vocational and trade school, and elementary or secondary school. The bill would allow funds in Section 529 plans to be used for credentialing and certification programs recognized under the Workforce Innovation and Opportunity Act, accredited by the National Commission on Certifying Agencies and the American National Standards Institute, or identified by the Department of Labor’s regulations or guidance.
The House bill sponsored jointly by Representative Robert Wittman (R-VA) and Representative Abigail Spanberger (D-VA) has 68 cosponsors while the Senate bill was introduced by Senator Amy Klobuchar (D-MN) and Senator Mike Braun (R-IN) along with 10 cosponsors.
When introducing the legislation, Senator Klobuchar stated “By allowing workers to use their ‘529’ educational savings to pay for additional training and certification, our bipartisan legislation will enable more Americans to access and benefit from these valuable programs.” The legislation has been referred to the House Ways and Means Committee and the Senate Finance Committee. Representative Wittman testified recently before the House Ways and Means Committee in support of the legislation.
In addition, the Higher Education and Workforce Development Subcommittee of the House Committee on Education and the Workforce held a hearing on “Strengthening WIOA: Improving Outcomes for Jobseekers, Employers, and Taxpayers.” The focus of the hearing was the Workforce Innovation and Opportunity Act (WIOA), that became law in 2014 and according to the Department of Labor is “designed to help job seekers across employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy.”
Challenge to ESG Rule Dismissed – The US District Court for the Northern District of Texas issued a decision in the case of State of Utah v. Martin J. Walsh, Secretary of Labor granting summary judgment to the Department of Labor in a lawsuit brought by 26 states challenging a Labor Department rule that allows retirement plan fiduciaries to consider environmental, social, and governance (ESG) factors when making investment decisions. The District Court found that the Investment Duties Rule did not violate either the Employee Retirement Income Security Act (ERISA) or the Administrative Procedure Act (APA).
ERISA requires that retirement plan fiduciaries discharge their duties only in the interest of plan participants and beneficiaries and for the “exclusive purpose of providing benefits.” The District Court found that the 2022 rule made little substantive change with prior rules. The District Court cited the following language from the new rule which “provides that where a fiduciary reasonably determines that an investment strategy will maximize risk-adjusted returns, a fiduciary may pursue the strategy whether pro-ESG, anti-ESG, or entirely unrelated to ESG.”
The rule, which became effective on January 30, 2023, was blocked by Congress in March. President Biden vetoed the bill blocking the rule and there were not sufficient votes to override the veto. In granting summary judgment, the judge stated that “While the court is not unsympathetic to plaintiffs’ concerns over E.S.G. investing trends, it need not condone E.S.G. investing generally or ultimately agree with the rule to reach this conclusion. Rather, all that is necessary is a minimal level of analysis from which the agency’s reasoning may be discerned, regardless of whether the court finds the reasoning fully persuasive.”
EEOC Releases Strategic Enforcement Plan – The Equal Employment Opportunity Commission (EEOC) recently released its Strategic Enforcement Plan (SEP) for Fiscal Years 2024 – 2028. The SEP works in conjunction with the Strategic Plan that the EEOC published earlier this year and is designed to set forth the Commission’s law enforcement priorities. “Through the SEP’s effective implementation, the agency will continue to advance equality and justice for all in workplaces across this nation, even as significant challenges remain,” said EEOC Chair Charlotte A. Burrows.
While continuing to focus on promoting promising practices to prevent discrimination, combat pay discrimination, prevent harassment, and address retaliation, according to the EEOC, the updated SEP made changes to:
Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at firstname.lastname@example.org.