A federal district court denied class certification to health plan participants who claimed the plan promised them lifetime benefits. The court found too many individualized questions about what the plan told each participant, and the claims could not be resolved on a class-wide basis. Fitzwater, et al. v. Consol Energy, Inc., et al., No. 2:16-cv-09849 and 1:17-cv-03861 (S.D.W.Va., October 15, 2019).

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Recently the Internal Revenue Service (IRS) and the Social Security Administration announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the Social Security wage base for 2020. In the article linked below, we compare the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2019 and 2020.

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The Ninth Circuit signaled that it might rehear Dorman v. The Charles Schwab Corp., where earlier this year it held that a mandatory arbitration provision required arbitration of an ERISA fiduciary-breach claim.

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The Department of Labor (DOL) issued a proposed rule that, if finalized, would expand its existing guidance and liberalize rules for electronic disclosure of retirement plan notices under ERISA. The proposed rule, which sets forth a notice and access safe harbor, would permit electronic disclosure as the default method of delivery while permitting participants to opt out and continue to receive paper disclosures.

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Most major jurisdictions have pay equity laws, but their approach is far from uniform. Global companies need to evaluate compliance with these laws on a country-by-country basis whilst simultaneously addressing their compensation policies globally.

A sample of the rules across several countries helps to identify trends that can drive effective global policies.


The Australian Workplace Gender Equality Act of 2012 mandates equal pay for equivalent or comparable work. There are annual reporting requirements for employers with 100 or more employees. Those reports must include the following indicators: gender composition of the workforce, gender composition of governing bodies, and equal compensation between men and women.

Employers are penalised by being publicly named if they fail to lodge a public report on time, or inform employees or other stakeholders that a public report was lodged, or give the requested compliance data under the Act.


The law varies across Canada; several Canadian provinces have pay equity laws in place, such as Ontario’s Pay Equity Act of 1987. There is also pending federal legislation that would require public and private employers with at least 10 employees to

  • Identify job classes predominated by men or women
  • Evaluate the value of work performed by job classes that are male or female predominant
  • Compare compensation associated with job classes that are male or female predominant and are of similar value
  • Identify female-predominant job classes requiring an increase in pay as compared with male  predominant job classes performing work of similar value
  • Identify when pay increases are due

These pay analyses will need to be included in a Pay Equity Plan. Employers need to post notices regarding Pay Equity Plan obligations and progress, provide employees with the opportunity to comment on the Plan, and file annual statements with the Pay Equity Commissioner.


There are no direct rules or measures in China to address pay equity. China does have in place general principles for eliminating pay gaps, but those do not specifically focus on gender pay disparities, and there is no duty for employers to assess and report on gender wage differentials.


President Macron’s administration has declared equality between men and women to be a “great national cause.” France enacted new legislation in September 2018 that requires employers with at least 50 employees to publish information each year on gender pay gaps and the actions they have taken to address them.

Employers also receive an “equal pay rating” based on the following factors:

  • The pay gap between men and women, which is based on average full time compensation within equivalent job functions
  • The difference between men and women who have received raises, other than as a result of promotion
  • The difference in compensation between men and women who have received promotions
  • Whether or not the employer has complied with the existing legal obligation to give a pay rise to employees when they return from maternity leave, if pay rises were granted during their maternity leave
  • The proportion of men and women in the list of the 10 most highly paid employees within the company.

If the employer’s equal pay rating falls below a certain level, the employer must adopt corrective measures. If the problem persists for three consecutive years, a financial penalty may apply.


The German Wage Transparency Act, which came into effect in January 2018, gives employees at companies that have over 200 employees the right to find out what their co-workers of the same level and opposite gender are earning. Although employees cannot obtain earnings information for a specific employee, a company must provide average earnings for employees of the opposite gender, with the caveat that there must be at least six comparable employees at that level.

Additionally, companies with over 500 employees are required to publish reports regarding any pay disparities they may have, along with their efforts to lessen those disparities.

United Kingdom

UK employers with at least 250 employees must publish the following information:

  • Mean and median gender pay gaps
  • Mean and median bonus gender pay gaps
  • Proportions of men and women receiving a bonus payment
  • Proportion of men and women in each quartile pay band.

United States

The US Equal Pay Act of 1963 (EPA) prohibits employers from paying employees differently based on their sex for performing equal work in the same establishment under the same or similar working conditions. Title VII of the Civil Rights Act of 1964 also bans sex discrimination in compensation in any form.

The United States did not historically have pay data reporting requirements but, in April 2019, a federal judge ordered the Equal Employment Opportunity (EEO) Commission to implement without further delay its proposal to collect pay data in the EEO-1 report required by Title VII and filed annually by employers with 100 or more employees.

Where laws elsewhere rely on disclosure, US law has historically relied on litigation. Litigation is predominantly driven by individuals, rather than government agencies, but now often includes either collective actions under the EPA, or class actions under Title VII, both of which raise the stakes significantly in terms of dollar exposure for employers. One of the best-known is Kassman v KPMG LLP, an ongoing class action brought by approximately 10,000 female employees alleging they faced disparate pay and promotions.

Beyond US national laws, over 40 states and territories have enacted their own pay equity laws. Amongst the most stringent are California, Delaware, Massachusetts, Oregon, New York, and Puerto Rico. Additionally, at least 11 states have enacted salary history bans preventing employers from requesting salary history information from job applicants. As with national laws, enforcement is largely by private lawsuits.

Global Compliance

There are clearly trends that are apparent from this quick global tour, which may help improve overall compliance.

One trend is the increase in countries making public disclosure (not just to employees or the government but to everyone, including shareholders) of gender pay disparity the core principle of their attack on gender-based pay inequality. This “name and shame” policy forces businesses to actively manage pay equity to limit brand damage. This approach is paralleled in the United States by shareholder resolutions that demand such disclosures.

Although there is a focus on avoiding litigation risk (US law), “shame” (UK and Australian law), and administrative burdens (Canada’s proposed federal law), businesses need to think carefully before acting.

The most obvious solution to pay inequality is to do a pay study and fix any disparity. It is, however, counterproductive if the company conducting the pay study does not have a detailed and evidence-based process in place for addressing any problematic findings from the study, and if it has not carefully considered what, if anything, should be privileged. There is a legal and employee relations minefield for ill-conceived studies and corrective actions that could create claims of reverse discrimination, which is illegal in the United States. Rudebusch v Hughes, for example, permitted Title VII claims of white, male professors challenging pay equity adjustments for female and minority professors, resulting in a jury verdict for the plaintiffs. Quick studies and quick fixes only exacerbate the problem.

Instead of knee jerk reactions, businesses need to follow the lawmakers’ lead to identify and rectify the structural impediments to equality in order to have real, lasting effect.

The component of French law that addresses wage increases during maternity leave is illustrative, since absences from the workforce owing to family responsibilities is part of the persistent wage disparity between men and women. The German law requiring salary disclosures empowers underpaid women to take steps to ask for a raise. Similarly, those US states that prevent questions about previous salaries are designed to avoid the “market defense” or “market replication” of sex discrimination in pay.

The global trend towards closing the pay gap is an opportunity for businesses to develop and implement proactive policies that recognize the source of the problem and tackle it head on.   Some examples include the following:

  • Address the gap in experience that invariably arises due to women, far more often than men, taking time off to handle family responsibilities.
  • Standardize starting compensation for the position, rather than the person; i.e., new hires or promotions each receive the same compensation package. From that point, each could earn more based on performance.
  • Follow the US’ example and ban asking for prior salary when hiring or promoting. A further embellishment may be to ban salary negotiations, which studies show disadvantage women.
  • Make pay transparent, which requires managers to rationalize and explain pay, while permitting employees to ask how to equalize the pay of similarly situated colleagues.

This article was originally publish in the latest issue of McDermott’s International News.

OSHA’s general duty clause now applies to workplace violence in healthcare Sec. of Labor v. Integra Health Mgmt., Inc., OSHRC Docket No. 13-1124 (March 2019), requiring healthcare employers to maintain workplaces “free from recognized hazards that are causing or likely to cause death or serious physical harm.”

Abigail M. Kagan authored a primer for healthcare employers on the clause. In an article originally published on Bloomberg Law, she discusses:

  • The four criteria OSHA considers in determining whether a general duty violation has occurred
  • Engineering controls and administrative controls healthcare employers should take to protect workplaces
  • A checklist healthcare employers can utilize to begin protecting employees

Reproduced with permission from Copyright 2019 The Bureau of National Affairs, Inc. (800-372-1033)

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The IRS recently issued guidance on the tax treatment, withholding and reporting for required distributions from tax-qualified retirement plans. Plan sponsors should contact their retirement vendors and trustees to ensure that they implement the tax requirements of the new guidance appropriately for their tax-qualified retirement plans.

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In the string of pension-plan related, actuarial equivalence lawsuits, the court in DeBuske, et al. v. PepsiCo, Inc., et al. recently handed down the first decision favorable to plan sponsors. The DeBuske court’s narrow decision may, however, have limited impact going forward.

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While campaigning for President in 1932, Franklin Roosevelt promised a crowd in Pittsburgh that he’d balance the federal budget while cutting “government operations” by 25 per cent. When he returned to Pittsburgh during his 1936 campaign, Roosevelt asked his staff how to answer questions about that unfulfilled promise and was told “deny you were ever in Pittsburgh.”

So much has changed since then: what is said and done is now instantly visible. This lesson came earlier to politicians, it is now unavoidable for business entities. There is no option to deny that you were there.

Let’s look at some consequences of this global visibility:

  • El Super, a small California-based grocery chain with approximately 600 unionized workers, failed to resolve a routine labor dispute at one store with the union representing those employees. As a result of this dispute involving just one store, El Super’s Mexican parent company, Chedraui Commercial Group, found itself subject to double barrel complaints filed by US and Mexican labor unions under the North American Free Trade Agreement labor agreement and Organization for Economic Cooperation and Development guidelines.
  • Vedanta found itself subject to a lawsuit by individuals living more than 5,000 miles away when an appellate court in the United Kingdom held that farmers from a Zambian village could bring a claim against Vedanta and its Zambian subsidiary (Lungowe and Ors. v Vedanta Resources PLC and Konkola Copper Mines PLC [November 2017] EWCA Civ 1528). The court’s decision expanded the potential “duty of care” that parent companies have under UK law to employees of their subsidiaries, to include even non-employees who might be affected by its subsidiaries’ operation.

This trend is particularly apparent with respect to issues of forced labor. Eight of the G20 countries (Australia, Brazil, China, France, Germany, Italy, Britain, and the United States) have passed, or taken steps to pass, anti-slavery laws intended to minimize the impact of forced labor. The UK Modern Slavery Act is a prime example.

These “nudge laws” require companies to disclose what actions they have taken to ensure there is no forced labor in their businesses or within their supply chains. The idea is that large companies that have not taken actions to prevent forced labor become subject to public scorn or shaming.

The risk, however, goes far beyond adverse publicity, as the following challenges demonstrate.

  • Barber v Nestlé USA alleged violations by Nestlé USA of California’s Transparency in Supply Chains Act, asserting a failure to disclose that some of the fish used by Nestlé in its cat food products may have been caught by fishing boats in Thailand that use forced labor and sold their catch to Nestlé’s partner, Thai Union Frozen Products, PCL. Nestlé ultimately won in both the trial and appellate courts.
  • Tomasella v. Mars, Inc., raised similar claims, alleging violations by Hershey Co., Nestlé USA Inc., and Mars, Inc., of the Massachusetts’ Consumer Protection Act by failing to disclose on the packaging their “participation in supply chains making use of the worst forms of child labor” despite having “knowledge of the child and slave labor in its supply chain.” The federal court judge dismissed the claims against Hershey, Nestlé, and Mars.
  • Samsung Global and its French subsidiary, Samsung Electronics France, have been challenged by nongovernment organizations (NGOs) in France for alleged misleading advertising. For example, the NGOs claim that Samsung’s website publishes ethical commitments guaranteeing workers’ rights, while its factories in China, South Korea, and Vietnam allegedly violate human rights, including engaging in child exploitation. After a Paris prosecutor closed the investigation, the NGOs filed a civil complaint against Samsung’s French subsidiary, which has led the Paris investigating magistrate to file preliminary charges against Samsung Electronics France.
  • Doe v. Nestlé is a suit under the US Alien Tort Claims Act in which Nestlé and Cargill have been accused of aiding and abetting child slave labor in the Ivory Coast. Most recently, the US Ninth Circuit Court of Appeals reversed the dismissal of these claims and allowed the plaintiffs to amend their complaint to “specify which potentially liable party is responsible for what culpable conduct.

Historically, businesses, like Franklin Roosevelt in 1932, focused narrowly on geography. Back then, what was said or done in Pittsburgh was only heard or witnessed in Pittsburgh. Today, what is done in Pittsburgh may matter in Paris, Prague, and Phnom Penh, and vice versa. As a result, companies must pay attention to employment practices along their entire global supply chain.

This article was originally publish in the latest issue of McDermott’s International News.

This article was co-authored by Emma Chen, who was an associate at McDermott at the time of writing this article.

As presidential hopefuls bemoan the high cost of healthcare, McDermott’s Ted Becker imagines a stack of lawsuits pushed toward corporations and insurance companies. If workers can use the Employee Retirement Income Security Act to challenge 401(k) plans’ fees and investments, why can’t they use it to sue over how their health insurance plans are managed?

In a Q&A recently published on Law360, Becker discusses his prediction that health and welfare plan management suits will be the next frontier for ERISA plaintiffs, and how McDermott is preparing clients.

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