EEOC Issues Revised Pay Data Reporting Requirements for Employers

EEOCThe EEOC issued a revised deadline for compliance with the employers pay data reporting requirements.  Back in February, the EEOC unveiled its proposal requiring employers with more than 100 employees, including nonprofit employers, to report employee compensation and hours worked on the employer’s Employer Information Report (“EEO-1”).  The EEOC will use this data to address discriminatory pay practices and enforce federal anti-discrimination laws.  The proposal, which originally was set to take effect in 2017, has been delayed until March 31, 2018. However, employers have to begin tracking pay data beginning in January of 2017.  

Currently, EEO-1 forms require reporting employee sex, race, and ethnicity.  The proposed expansion of the EEO-1 reporting requirements would require employers to identify employee job category, pay data from the employee’s IRS Form W-2, and the total number of hours worked.  The pay data would be reported in ‘pay bands’ in an effort to protect employer’s confidentiality.  Employers would report how many employees, and each employee’s sex, race, and ethnicity, are in each pay band (e.g. $19,239 and under, $19,240-$24,439, etc.) for each EEO-1 job category.  The proposed EEO-1 is available here.  The EEOC plans to share the pay data with the Office of Federal Compliance Contract Programs (“OFCCP”) who will make this new pay data available to the public.   

The key revision to the July updated rule is the delay in implementation.  The 2016 EEO-1 reporting deadline, which does not require pay data information, is September 30, 2016. There will be a year and a half gap between the 2016 EEO-1 report deadline and the 2017 EEO-1 report deadline. The 2017 EEO-1 report will be due on March 31, 2018.  The deadline to submit comments on the proposed rule is August 15, 2016.  The final regulations will likely be released in late 2016 or early 2017.  

Key Takeaways:

  • If you do not currently file an EEO-1 report, you will not have to comply with the pay data reporting requirements.
  • There are some employers, such as federal contractors with 50-99 employees, that currently have to fill out EEO-1 report but these employers would not have to report pay data as they have fewer than 100 employees.
  • Employers would not have to report individual pay or salaries, but would instead report number of employees with salaries in each pay band.
  • Pay data is not included on the September 30, 2016 EEO-1 report.  Any changes would be implemented for the September 30, 2017 EEO-1 report.

For more information or assistance, please contact Denis Jacobson at (336) 271-5242 or



Introduction and the Basics 

There are a myriad of potential “traps for the unwary” in the world of commercial transactions and the Uniform Commercial Code (the “UCC”).  This article is the first in a series of articles that will address a few of the most common pitfalls to be aware of when dealing with commercial transactions and the Uniform Commercial Code.  While specific pitfalls will be the focus of future articles, as a starting point, the focus of the remainder of this article will be a high level summary of the basics of the UCC. 

The Uniform Commercial Code is a comprehensive set of laws governing a wide variety of UCCcommercial transactions including the sale of goods, taking security interests in personal property, and bank and financing transactions.  Specific examples of common transactions in which the UCC applies range from a business buying or selling a product pursuant to a purchase order or supply agreement (which would be governed by Article 2 of the UCC), to a lender taking a security interest in a piece of equipment owned by a debtor as security for the repayment of the debtor’s loan (which would be governed by Article 9 of the UCC).   

As the name suggests, the goal in drafting and codifying the UCC was to establish a uniform treatment of commercial transactions across all 50 U.S. states in light of the prevalence of cross borders commercial transactions.  The UCC itself is only a model code and does not have any legal effect unless it is codified into state law.  Currently, the UCC has been adopted in all 50 states with some variations in form, though; substantively the state enacted UCC statutes are largely similar.  This series of articles and the information contained within will be based on the specific version of the UCC currently in place in the state of North Carolina. 

Should you have any questions concerning the uniform commercial code, commercial transactions, or any other related matter, please contact a member of our Business Services and Governmental Affairs practice group. 

For more information or assistance, please contact Natalie Folmar at (336) 271-5220 – or Jesse Anderson at (336) 271-5208 –


Employers May be Liable for Hostile Work Environment Created by Anonymous Actor

Recently, the Fourth Circuit Court of Appeals published an opinion in Pryor v. United Air Lines, Inc. holding that an employer may be liable under Title VII for a hostile work environment created by an anonymous actor. 

Ms. Pryor, an African-American female, was employed by United Airlines.  In January of 2011, Ms. Pryor discovered a note in her company mailbox which contained racially motivated threats and racial slurs directed at Pryor.  The mailbox in question was located in a secure area accessible only to employees of United Airlines and other personnel authorized by the company.

Pryor reported this incident to her supervisor who stated that there was “not much” the company could do about the incident due to the absence of security cameras in the mail room.  HostilePryor was asked to fill out a form, but Pryor’s supervisor failed to report the incident to the company’s Employee Service Center as required by the company’s internal Harassment and Discrimination policy.  Pryor’s supervisor notified other members of management of the incident.  However, no manager reported the incident to the Employee Service Center as required by the company’s policy.  Additionally, United Management was aware of previous incidents of anonymous racial harassment including the spreading of rumors and the posting of racially discriminatory flyers in company break rooms.

Pryor herself ultimately reported the incident to the Employee Service Center and contacted the police.  United management eventually sent a “must read” email regarding the incident to their employees, two and a half months after it occurred.

In October of 2011, Pryor and a number of other African-American employees of United received a nearly identical note containing racial slurs and racially motivated threats in their mailboxes.  Pryor reported the incident to her supervisor, but her supervisor did little in response.  Pryor then reported the incident to the Employee Service Center, corporate security, and the police.  The company eventually conducted an investigation, but the harasser was not identified.

Pryor then filed with the EEOC alleging that United’s failure to investigate these incidents of racially motivated threats constituted discrimination. 

The elements of a discrimination claim under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, require that the alleged conduct be (1) unwelcome; (2) based on race; (3) sufficiently severe or pervasive to alter the condition of the employment and to create an abusive work environment; and (4) imputable to the employer.  The primary issue in this case was whether the anonymous harassment could be imputed to United.

The Court noted that, while employers are not strictly liable for acts of harassment that occur in the workplace, employers do maintain the responsibility to reasonably carry out the dual duties of investigation and protection.  The general rule is that an employer may be liable for a hostile environment created by a third party “if it knew or should have known about the harassment and failed to take effective action to stop it…by responding with remedial action reasonably calculated to end the harassment.”  The anonymous nature of a threat may heighten what it required of an employer, especially under circumstances where, as here, the harassment occurs in a closed space accessible only to those authorized by the employer.

The Court ultimately held that a reasonable jury could find that United’s response to the original threatening note was neither prompt nor reasonably calculated to end the harassment, noting that United did not call the police, report the matter to corporate security or the Employee Service Center, install cameras, or take other potential protective and investigative measures.  Therefore, the Court concluded that the district court erred by granting summary judgment for United and vacated and remanded the case.

Employers should take note of the Court’s holding in Pryor v. United Air Lines, Inc. in responding to reports of harassment by anonymous third parties, particularly in settings where harassment occurs in areas accessible only to other employees.  The fact that investigation may be difficult due to a lack of security cameras or other similar reasons will not allow an employer to avoid liability.  Anonymous harassment may be imputable to an employer if the response to anonymous harassment is not sufficient.  Employers should evaluate harassment complaints seriously and promptly investigate any such complaints.

The full opinion can be found here: 

For more information or assistance, please contact Denis Jacobson at (336) 271-5242 - or Ben Hintze at (336) 271-5247 –  in the Labor & Employment practice group.



TRID Effective as of October 3, 2015: Mortgage Disclosure Documents Simplified for the Next Generation of Homeowners

Of utmost importance to real estate professionals and consumers alike, the TRID (or TILA-RESPA Integrated Disclosures) became effective on October 3, 2015.  The Consumer Financial Protection Bureau enacted the TRID to simplify the numerous overlapping mortgage disclosure forms that consumers receive when applying for and closing a mortgage loan.  The TRID combines disclosures required under the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA).  Since the implementation of the TRID, mortgage applications have plummeted as lenders respond to new requirements that change the way they have conducted mortgage transactions for over three decades.  

The TRID consolidated the former disclosure documents into two new forms: the Loan Estimate and the Closing Disclosure.  Under the TRID requirements, lenders must provmortgageide consumers with the Loan Estimate three business days after the consumer applies for a mortgage loan and must provide the Closing Disclosure three days before closing on the mortgage loan.   Prior to the enactment of the TRID, a consumer would receive the information now contained in the Closing Disclosure at closing or shortly before.  Providing additional time for consumers to compare terms and costs leaves them more informed going into a mortgage closing.  Further, key terms such as interest rates, monthly payments, and closing costs are presented on the first page of the new forms in order to make the information more accessible for new homeowners.

The increased time pressures on the sending of documents under the TRID raises additional concerns surrounding the security of emails and attachments exchanged during the real estate settlement process.  Given the sensitive financial information exchanged between lenders, agents, and borrowers during a real estate transaction, data breaches and fraud are unfortunately all too common.  Unencrypted emails are not secure, as both the content of the messages and the attachments are available and viewable to interceptors.  Real estate professionals should utilize an encrypted email service, whether through cloud-based encryption or automatic email encryption, to ensure data security. 

Within the real estate arena, Tuggle Duggins focuses on commercial real estate transactions, which are exempt from the TRID requirements.  However, at our firm, familiarizing ourselves with changes in the law is always a priority, as there is a possibility, albeit unlikely, that similar requirements could be imposed on commercial closings in the future.

For more information, please contact Bill Burgin at (336) 271-5241 or Brittany Teague at (336) 271-5249 in the Real Estate and Construction Law group.


North Carolina Supreme Court Broadens Guarantor Protections in Foreclosure Deficiency Actions

Proving a mortgage lender purchased property securing a debt at a foreclosure sale for below market value has always been a primary defense to a deficiency action brought by the lender against a borrower.   Traditionally, that defense has been unavailable to guarantors who guarantee debt secured by real property.  With the North Carolina Supreme Court’s recent ruling in High Point Bank and Trust Company v. Highmark Properties, et al., guarantors can now finally utilize this common defense previously available only to principal obligors.

The relevant statute at issue is N.C.G.S. § 45-21.36 which provides, in relevant part that:

“When any sale of real estate has been made by a mortgagee … at which the mortgagee … becomes the purchaser and takes title either directly or indirectly and thereafter … shall sue for and undertake to recover a deficiency judgment against the mortgagor, trustor or other maker of any such obligation whose property has been so purchased, it shall be competent and lawful for the defendant against whom such deficiency judgment is sought to allege and show as matter of defense and offset … that the property sold was fairly worth the amount of the debt secured by it at the time and place of sale or that the amount bid was substantially less than its true value, and, upon such showing, to defeat or offset against deficiency judgment against him, either in whole or in part.

This statute is used regularly by borrowers against lenders who realize extra value from power of sale foreclosuresforclosure by underbidding on secured real estate at a foreclosure sale.  By the plain language of the statute, the defense has been available only to mortgagors, trustors and other makers of any obligation whose property has been so purchased.  The North Carolina Court of Appeals has generally held this to mean the party must have an interest in the real property.  Because individual guarantors do not typically hold title to real property, the defense has been largely unavailable to them.

                The Supreme Court decided in HighmarkProperties that the guarantor exclusion was no longer applicable to this anti-deficiency statute and, through reversal of longstanding North Carolina Court of Appeals precedent, held that the defense is available to guarantors whether or not they actually own title or any interest in title to the secured real property.  Part of the justification for this deviation from the past was grounded in basic suretyship principles: that because a guarantor promises to repay the outstanding debt, the defense should be available to determine what actual amount debt may still be owing to the lender.  If the lender paid less than fair market value for the property, the statute’s defense would reduce the outstanding debt for any primary borrower and therefore reduce the guarantor’s obligation.

                This abolition of the guarantor exclusion greatly affects guarantor liability in the context of foreclosure deficiency actions in North Carolina moving forward.  Lenders and borrowers should take note of this change as it can greatly affect the collections process for deficiency actions.

For more information or assistance, please contact Jeff Southerland at (336) 271-5251 – or Alan Felts at (336) 271-5215 –