August 2016 - Laborsphere

New ACA Rule Changes Hospitals’ Obligations to Provide Auxiliary Aids to Patients and Companions

On September 8, 2015, the Department of Health and Human Services (“HHS”) proposed regulations to implement Section 1557 of the Affordable Care Act. Section 1557 prohibits certain entities that administer health programs and activities from excluding an individual from participation, denying program benefits, or discriminating against an individual based on his or her race, color, national origin, sex, age or disability. On May 13, 2016, the HHS Office of Civil Rights issued the final rule implementing Section 1557. The final rule also prohibits discriminatory practices by health care providers, such as hospitals, that accept Medicare or doctors who participate in the Medicaid program. The final rule became effective on July 18, 2016.

Section 1557 builds on long-standing federal civil rights laws, including Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, Title III of the Americans with Disabilities Act (ADA), and the Age Discrimination Act of 1975. The final rule addresses effective communication for individuals with disabilities at section 92.202. One notable requirement of this new rule is that hospitals must give “primary consideration” to the individual’s preference regarding auxiliary aids for effective communication, such as requests for on-site ASL interpreters and other types of auxiliary aids.

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The Split Among Circuit Courts in Compelling Individual Arbitration in Class Actions Continues

Earlier this week, the Ninth Circuit Court of Appeals issued a ruling in Morris v. Ernst & Young and aligned itself with the Seventh Circuit[1] in holding that an employer cannot compel individual arbitration of an employee’s class and collective action claims.

In Morris, Plaintiffs Stephen Morris and Kelly McDaniel (“Plaintiffs”) worked for the accounting firm Ernst & Young. As a condition of their employment, Plaintiffs were required to sign an agreement that the Ninth Circuit determined Plaintiffs could only “(1) pursue legal claims against Ernst & Young exclusively through arbitration and (2) arbitrate only as individuals and in ‘separate proceedings.’” In a relatively surprising move and 2-1 decision, the Ninth Circuit found that the employer violated Sections 7 and 8 of the National Labor Relations Act (NLRA)[2] by “requiring employees to sign an agreement precluding them from bringing, in any forum, a concerted legal claim regarding wages, hours, and terms and conditions of employment.” In doing so, the Ninth Circuit overruled the lower court’s ruling in favor of Ernst & Young in its motion to compel individual arbitration and held that the agreements in question precluded Plaintiffs from “initiat[ing] concerted legal claims against the company in any forum—in court, in arbitration proceedings, or elsewhere.”

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Back to School Update on School-Related Parental Leave

As the summer comes to a close, employees are preparing for their children’s return to school, and will need to attend various school events and activities during the workday. An increasing number of states now mandate that public and private employers provide unpaid leave for this purpose, including the following states that have laws covering private employers:

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What Employers Need to Know about the Government’s Recent Scrutiny of Non-Competes

For more than 400 years, private businesses have used non-compete agreements in one form or another to protect their legitimate business interests, such as long-standing customer relationships, investment in specialized training, or development of trade secrets. They are commonplace in many employment contracts in a variety of industries ranging from retail, insurance, healthcare, financial services, technology, engineering, and life sciences. Some state legislatures and courts have curtailed their use in certain industries or professions. California, for example, prohibits them unless limited exceptions apply. Cal. Bus. Code §16600. Most states prohibit them for legal professionals. Many courts can modify or “blue pencil” them if the restrictions are found to be broader than necessary to protect an employer’s legitimate business interests.

Historically, federal and state agencies have generally stayed out of the mix in terms of regulating or challenging private businesses’ use and enforcement of non-competes. However, a recent uptick in government enforcement activity suggests a new wave of challenges is on the horizon for employers.

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SEC Charges Another Company for Anti-Whistleblower Provision in Severance Agreements

The SEC announced on Wednesday that BlueLinx Holdings Inc. has agreed to pay a $265,000 penalty for including a provision in its severance agreements that required outgoing employees to waive their rights to monetary recovery if they filed a charge or complaint with the SEC or other federal agencies. Press Rel. No. 2016-157. According to the SEC’s order, approximately 160 BlueLinx employees have signed severance agreements that contained the provision since it was added to all of BlueLinx’s severance agreements in or about June 2013.

The provision violates Rule 21F-17 of the Exchange Act, which became effective on August 12, 2011, and prohibits any action to impede an individual from communicating with the SEC about a possible securities law violation. The purpose of the adoption of Rule 21F-17 was “to encourage whistleblowers to report possible violations of the securities laws by providing financial incentives, prohibiting employment-related retaliation, and providing various confidentiality guarantees.” See In the Matter of BlueLinx Holdings Inc., Release No. 78528. Because the severance agreement required employees leaving the company to waive potential whistleblower awards or risk losing payments and other benefits under the agreement, it ran afoul of Rule 21F-17.

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Massachusetts Joins California and New York with Aggressive Equal Pay Law

On August 1, Massachusetts added significant teeth to the state’s current equal pay law. The new law, “An Act to Establish Pay Equity,” not only targets compensation decisions, it also affects hiring practices. As of July 1, 2018, when the new law takes effect, employers cannot ask an applicant to provide his or her prior salary history until after the candidate has successfully negotiated a job offer and compensation package. This measure is intended to stop the perpetuation of gender pay disparities from one employer to the next. In addition, employers cannot use an employee’s prior salary history as a legitimate basis to pay a man more than a woman for comparable work.

The definition of comparable work is broad: “work that is substantially similar in that it requires substantially similar skill, effort and responsibility and is performed under similar working conditions: provided, however, that a job title or job description alone shall not determine comparability.”

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