Labor Sphere News Feed
By Alexa E. Miller and David J. Woolf
Earlier this year, Philadelphia became the first city to pass a law prohibiting employers from inquiring about a job applicant’s wage history and restricting their ability to consider wage history in setting new employee compensation. The pay equity ordinance was enacted to halt the perpetuation of gender discrimination in compensation practices.
As has been widely reported, the Philadelphia Chamber of Commerce filed a lawsuit on April 6, 2017 to challenge the ordinance, which was scheduled to go into effect on May 23, 2017. The Chamber also filed a motion for a preliminary injunction, asking the Court to enjoin the enforcement of the ordinance while its lawsuit is pending, on the grounds that the ordinance violates businesses’ free speech rights under the First Amendment and is unconstitutionally vague. The City of Philadelphia’s apparent first response … Read More »
By Lynne Anderson
By October of 2017, NYC employers – and their recruiting agencies – will no longer be allowed to ask about an applicant’s salary and benefits history during the interview process due to a recent amendment to the NYC Human Rights Law. This law follows Executive Orders signed in November 2016 by Mayor de Blasio, and in January 2017 by Governor Cuomo, banning questions about salary history for NYC and NY state public-sector applicants prior to a conditional offer of employment. In addition, private employers in Philadelphia as of May 2017, and Massachusetts as of July 1, 2018, will also be banned from asking applicants about their compensation history. These laws are intended to help break the perpetuation of salary inequities by prohibiting reliance on prior, possibly inequitable compensation levels, as a means to set salaries and other compensation … Read More »
By Lawrence J. Del Rossi
This is the second article in a continuing series, “The Restricting Covenant.” In this article, I discuss a topic that is near and dear to me – my hair and my long-time relationship with my barber. I have used the same barber to cut my hair since high school, even after moving many miles away. I sit in his chair, he cuts my hair with expert precision, and I am a satisfied customer. This got me to think about one of the most basic reasons why employers want to impose non-compete and non-solicitation obligations on their employees – the value and strength of a long-term customer relationship. Courts have long recognized that protecting customer relationships is a legitimate protectable business interest that can support the enforcement of a restrictive covenant if it satisfies standards of “reasonableness.” … Read More »
By Mark Foley and Matthew Fontana
One of the most significant wage and hour actions of the Obama administration—promulgating a new rule on overtime eligibility—remains frozen in legal limbo as the Trump administration decides whether to repeal and replace it or propose an alternative solution. With such uncertainty, what should employers do to ensure they are in compliance when the Trump administration finally takes action?
First, employers need to understand why the new overtime rule is not in effect. A federal district judge in Texas stayed the rule’s implementation on November 22, 2016, just nine days before it would have become effective nationwide. The judge held that the Department of Labor exceeded its regulatory authority by establishing a salary threshold under which employees were automatically overtime eligible regardless of their job duties. The Department of Justice appealed that … Read More »
By Mark Terman and Dennis Mulgrew
March Madness has arrived! The 2017 NCAA Basketball Tournaments tip-off tonight (March 15) and continue through the Women’s and Men’s National Championship Games on April 2 and 3 respectively. With this, comes the American tradition of companies and their employees betting on tournament outcomes through office bracket pools.
As lawyers, we have to point out that your company’s March Madness pool is very likely illegal under at least three federal gambling laws (the Professional and Amateur Sports Protection Act, the Interstate Wire Act of 1961, and the Uniform Internet Gambling Enforcement Act) and many state laws. And we would be remiss to not mention that there is a parade of horribles that could happen from permitting such workplace wagering.
With that said, the more practical reality is that office pools have … Read More »
By Lawrence J. Del Rossi
Restrictive covenants are private agreements that restrict an individual’s business activities within a specific geographic area for a period of time, in return for wages, access to information, or some other type of tangible benefit. Like the spots of a leopard, they come in all shapes and sizes. Their enforceability varies from state to state, from occupation to occupation, and from industry to industry. Many states have quirky or arcane rules or regulations tailored to specific occupations. Some industries have specific rules and practices that dictate the parties’ course of dealing and determine the “reasonableness” of the restrictions. Some employers prefer non-competes, while others prefer non-solicitations or non-disclosures, or some combination of each. In any event, before agreeing to be restricted, or before asking someone to be restricted, this legal landscape should be explored and understood … Read More »
Appellate Decision May Prompt New Jersey Employers to Seek Jury Waivers Instead of Arbitration Agreements
By William R. Horwitz
Earlier this month, the Superior Court of New Jersey, Appellate Division, issued a decision that may cause employers considering mandatory arbitration agreements to consider jury-waiver agreements instead. In Noren v. Heartland Payment Systems, Inc., 2017 WL 476216 (App. Div. Feb. 6, 2017), the Court invalidated a jury-waiver provision’s application to statutory employment claims, but explained that, worded properly, such waivers are enforceable. Litigating in court without a jury has certain advantages and New Jersey employers considering arbitration programs may also want to consider jury waiver provisions as another possible option.
Defendant Heartland Payment Systems, Inc. (“HPS”) hired plaintiff Greg Noren (“Noren”) as a Relationship Manager in April 1998. In that position, Noren sold debit and credit, payroll and other processing card services to merchants. In 2002, HPS terminated Noren’s employment but then rehired him. In connection with … Read More »
By Daniel H. Aiken, Carol F. Trevey and Brendan P. McHugh
Retail sellers and manufacturers across the country that conduct a threshold amount of business in California must comply with the California Transparency in Supply Chains Act (“Supply Chains Act” or “Act”). CAL. CIV. CODE § 1714.43. The Act, which became effective in January 2012, requires those retailers and manufacturers to disclose their efforts to eradicate slavery and human trafficking from their direct supply chains. Id. § 1743.43 (a)(1). Specifically, those companies must disclose on their website to what extent they: (1) engage in verification of product supply chains to evaluate and address risks of human trafficking and slavery; (2) conduct audits of suppliers; (3) require direct supplies to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the countries in which they … Read More »
Get Ready to Comply: All Signs Point to Enforcement of the Enhanced EEO-1 Form and Reporting Obligations
By Alexa E. Miller and Lynne A. Anderson
For approximately fifty years, the Equal Employment Opportunity Commission (“EEOC”) has collected workforce data about race, gender, ethnicity and job category from all businesses with 100 or more employees, using the EEO-1 report. In an effort to combat pay discrimination, last year the EEOC announced that it finalized regulations expanding the information collected in the annual EEO-1 report to include pay data.
The revised EEO-1 form requires employers to collect aggregate W-2 earnings and report the number of employees in each of the twelve pay bands (spanning from $19,239 and under to $208,000 and over) for the ten EEO-1 job categories (Executive/Senior Level Officials and Managers; First/Mid Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; Service Workers) and classified by race, sex and ethnicity. The … Read More »
By Thomas J. Barton
The United States Supreme Court finally agreed earlier this year to resolve whether the National Labor Relations Act (NLRA) prohibits class action waivers in employee arbitration agreements. This ruling will have an immediate and far ranging impact on employers. The Trump presidency will likely play a crucial role in the outcome of what will be the first of many challenges to the expansive federal agency policies under the former Obama administration.
Employers have increasingly required employees to sign agreements to have their employment disputes resolved through private arbitration rather than through a lawsuit in state or federal court. The most critical aspect of these agreements has been the provisions by which the employee agrees to resolve his or her dispute on an individual basis rather than by means of a class action. When enforced, class action … Read More »
By Cheryl D. Orr and Jaime D. Walter
California employers that perform bag checks on employees in order to deter theft breathed a sigh of relief in 2015 after a California federal court’s ruling in Frlekin v. Apple Inc., No. C 13-03451, 2015 WL 6851424 (N.D. Cal. Nov. 7, 2015), which provided that state law does not require that Apple compensate hourly employees for time they spend undergoing security checks. The ruling followed another favorable decision in December 2014, when the U.S. Supreme Court held in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513, 518 (2014) that security checks do not constitute compensable work activities under federal law. After years of increased attention having been paid to bag check actions, the decisions slightly cooled the plaintiffs’ bar’s enthusiasm for such actions. But despite the victories, California employers should not let … Read More »
By Lynne Anderson
A New Jersey jury awarded a mid-level manager $51.4 million(!) on January 26, 2017, after a short four-day trial. New Jersey juries have awarded age discrimination plaintiffs multi-million dollar verdicts in the past – but $51 million is roughly five times any prior award. Press coverage on the verdict speculates that this may be the highest jury award ever, throughout the country, in a single-plaintiff age discrimination case. While the post-trial motions and appeals are yet to be filed, there are some initial takeaways from this case.
As with most age discrimination lawsuits, this case arose out of a reduction in force (RIF). Robert Braden had been employed by Lockheed Martin, and its predecessors, for 28 years when he was let go in July of 2012 as part of a company-wide RIF. Six months later, Mr. Braden filed a … Read More »
Third Circuit Makes it Easier to Prove ADEA Disparate Impact Claims By Use of Subgroups of Older Workers
By Lawrence J. Del Rossi
The Third Circuit Court of Appeals recently issued a precedential decision, Karlo, et al. v. Pittsburgh Glass Works, LLC, that likely will make it easier for subgroups of older workers to bring lawsuits under the Age Discrimination in Employment Act (“ADEA”), on a “disparate impact” theory of liability. It also creates a split with the Second, Sixth and Eighth circuits, paving the way for greater uncertainty for national employers.
The Karlo Decision – Comparison of Subgroups Permitted For Disparate Impact Analysis
The defendant Pittsburgh Glass Works, LLC instituted reductions in force that resulted in the termination of approximately 100 employees. The plaintiffs, a group of workers all over the age of 50, brought a putative ADEA collective action, asserting, among other things, disparate impact claims. To establish a prima facie case for disparate impact under the ADEA, a … Read More »
By: Vik C. Jaitly and Dan H. Aiken
This Ordinance, which was passed in September 2016, requires employers in Morristown, New Jersey to provide a certain amount of paid sick time per year depending on the size of the employer. Generally, employees who work more than 80 hours a year in Morristown will be covered under this Ordinance. The Morristown Ordinance is the 13th local paid sick leave ordinance enacted within New Jersey, following similar ordinances in the towns and cities of Bloomfield, East Orange, Elizabeth, Irvington, Jersey City, Montclair, Newark, New Brunswick, Passaic, Paterson, Plainfield, and Trenton.
The below chart provides the amount of paid sick time that employers are required to provide under this Ordinance:
Total No. of Employees
Amount of Time
10 or more employees
1 hour of paid sick time for every 30 hours worked
40 hours a year
Fewer than 10 employees
1 … Read More »
By Mark E. Terman
*Originally published by CalCPA in the January/February 2017 issue of California CPA — the original article can be found here.
Few things in this world can be certain, except that the California Legislature will expand regulation of employers each year and the sun will come up tomorrow. In an apparent pendulum swing, 569 bills introduced in 2016 mention “employer,” compared to 224 in 2015 and 574 in 2014. Most of those bills did not pass, and of the ones that did, most were not signed into law by Gov. Brown. Essential elements of selected bills that became law affecting private employers, effective Jan. 1, 2017, unless otherwise mentioned and organized by Senate and Assembly bill number, follow.
California Minimum Wage Ascending to $15
SB 3 sets a state minimum wage for non-exempt employees that will escalate annually over the next … Read More »
By Philippe A. Lebel
Two weeks ago, just in time for the holidays, the California Supreme Court issued its (published) decision in Augustus v. ABM Security Services, Inc. (opinion available here). In Augustus, the Court held that California law does not permit employers to require employees to take on-duty or on-call rest breaks.
The Augustus decision will have significant impact for thousands of California employers who have employed on-duty or on-call rest breaks as part of their business operations, especially in the healthcare, security, hospitality, and retail sectors.
California’s Rest Break Requirements (In General)
Although not directly addressed in California’s Labor Code, California’s Industrial Welfare Commission’s industry-specific Wage Orders require employers to authorize and permit their non-exempt employees to take a net 10 consecutive minute rest break for each four hour work period or major fraction thereof. Insofar as practicable, the rest breaks should … Read More »
By Jessica Burt
On Monday, December 19, 2016, the New Jersey State Legislature postponed its vote to override the Governor’s veto of Senate Bill No. 992, also known as the New Jersey Pay Equity Act. The Act was passed earlier this year by both the New Jersey Senate and Assembly, but vetoed by Governor Christie.
The Act provides that it will be an unlawful employment practice, or unlawful discrimination, for any employer to pay any of its employees at a rate of compensation, including benefits, which is less than the rate paid to employees of the other sex for substantially similar work. An employer may pay a different rate of compensation only if the employer demonstrates that the differential is made pursuant to a seniority system, a merit system, or the employer demonstrates:
That the differential is based on one or more legitimate, bona … Read More »
David Woolf wrote an article for the Philadelphia Business Journal titled, “Here’s what that new Philadelphia ‘pay history’ law means for your business.” Philadelphia will likely become the first city in the nation to ban employers and employment agencies from asking job applicants for their salary history or requiring disclosure of such information. The Philadelphia City Council unanimously approved the bill on December 8; if enacted as expected, the new law will go into effect 120 days after the Mayor signs it. David discusses what this new bill means for local businesses.
Dave notes that the ordinance would also make it unlawful for an employer to base their compensation offer on an applicant’s prior salary unless the applicant knowingly and willingly discloses their salary history to the employer. The new law is meant to lessen the wage gap earnings between white … Read More »
By William R. Horwitz
Last week, the U.S. Court of Appeals for the Second Circuit resolved a split among the four New York district courts regarding whether a plaintiff can recover cumulative liquidated damages awards under both the Fair Labor Standards Act (federal law) and the New York Labor Law (state law) for the same wage and hour violation. In Chowdhury v. Hamza Express Food Corp., 2016 WL 7131854 (2d Cir. Dec. 7, 2016), the Court held that a plaintiff cannot receive double recovery. The decision will have a significant practical impact on wage and hour litigation.
In Chowdhury, the plaintiff, a deli worker, filed a lawsuit against his employer for, among other things, allegedly failing to pay him for overtime work in violation of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”). During the litigation, … Read More »
Larry Del Rossi published an article for Today’s General Counsel titled, “Recent Scrutiny of Non-Competes.” Larry provides an overview of non-compete agreements (also known as restrictive covenants) and discusses a recent uptick in government activity that may regulate or challenge private businesses’ use and enforcement of non-competes.
Larry says “one major challenge for national companies is that enforcement of non-competes varies from state to state, so that there is no uniform standard.” In May 2016 the White House issued “Non-Compete Agreements: Analysis of the Usage, Potential Issues, and State Responses,” a document intended to identify areas where implementation and enforcement of non-competes may present issues, put forward a set of best practices, and serve as a call to action for state reform.
Larry advises companies to consider whether all employees within the company should have non-competes, evaluate the scope and structure of … Read More »
By Cheryl D. Orr and Ramon A. Miyar
A federal district court in Texas has issued a permanent injunction blocking implementation of the U.S. Department of Labor’s (“DOL”) controversial “Persuader Rule,” which was promulgated under the Labor Management Reporting and Disclosure Act of 1959 (“LMRDA”).
The LMRDA imposes public reporting obligations on employers and consultants who enter into agreements to persuade or influence employees’ exercise of their collective bargaining rights. For more than 50 years, the DOL interpreted the LMRDA’s “Advice Exemption” as exempting from the statute’s onerous reporting requirements indirect “persuader activities” by labor relations consultants, including attorneys. The DOL’s Persuader Rule, however, which took effect on April 25, 2016, removed indirect persuader activities from its definition of exempt advice, thus subjecting confidential attorney-client communications and agreements to the LMRDA’s public reporting requirements.
Following the publication of the Persuader Rule on March … Read More »
By Mark E. Terman and Gerald T. Hathaway
A federal court issued a national preliminary injunction prohibiting the Department of Labor’s new salary rule for Executive, Administrative, Professional, Outside Sales and Computer Employees from taking effect. The final rule, published on May 23, 2016 would have gone into effect on Dec. 1, 2016. We wrote about this previously and at this time, recommend that employers suspend, but not cancel their implementation plans.
The rule mandated that employees falling under the executive, administrative or professional exemptions must earn at least $913 per week ($47,476 annually), which would more than double the currently existing minimum salary level of $455 per week. In State of Nevada v. U.S. Dep’t of Labor, No. 4:16-cv-731 (E.D. Tex. filed November 22, 2016) District Court Judge Amos L. Mazzant III (appointed by President Obama) ruled that the Department of … Read More »
By Alexa E. Miller
On September 29, 2016, the Department of Labor (“DOL”) issued a Final Rule implementing Executive Order 13706, which requires federal contractors and subcontractors performing work on or in connection with certain contracts to provide employees with up to 56 hours (7 days) of paid sick leave per year beginning on January 1, 2017. However, because this rule became final relatively recently, the Final Rule implementing EO 13706 could be rescinded by exercise of the Congressional Review Act (5 U.S.C. §§ 801-808), which is not subject to filibuster.
Applicability of the Final Rule
The Final Rule applies to certain new contracts and replacement contracts for expiring contracts with the federal government requiring performance in whole or in part within the United States that result from solicitations issued on or after January 1, 2017 (or that are awarded outside the solicitation … Read More »
By Gerald T. Hathaway
We continue to analyze and assess what the 2016 election results mean in the Labor & Employment Law space, and what we can expect from a GOP White House, House and Senate. The last two times that this GOP alignment was present were 1929 and 2007 (let’s hope that the financial events that followed those two occasions – the Great Depression and the Great Recession – do not repeat themselves this time around).
It is difficult to predict what President Donald J. Trump’s actual agenda will be, because his campaign was long on broad concepts and very short on serious, detailed policy presentation. While Candidate Trump said many things, including contradictory things, about many topics, some themes can be discerned from pre-election and post-election comments. Also, some issues have been on the GOP wish list for some time, … Read More »
By Mark E. Terman and Gerald T. Hathaway
Since our November 10 Post, Will the DOL Exemption Rules Be Enjoined Before December 1, 2016?, federal District Court Judge Amos L. Mazzant, III heard nearly 3.5 hours of argument today on the Emergency Motion for Preliminary Injunction to stop nationwide implementation of the Department of Labor’s May 16, 2016 Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. If not enjoined, this Final Rule will require that, by December 1, 2016, employees be paid a weekly salary of at least $913 (annually, $47,476) to maintain “white collar” exemption from overtime and other federal Fair Labor Standards Act requirements, as long as the employees’ duties satisfy the exemption rules too.
The Court took the matter under advisement, projected that a ruling will be issued Tuesday, November 22, … Read More »
The EEOC’s 2017-2021 Strategic Enforcement Plan – Targeting the “Gig Economy” and Independent Contractor Misclassification
By Gregory W. Homer and Dennis M. Mulgrew
The EEOC has issued its new Strategic Enforcement Plan for the fiscal years 2017 to 2021, which outlines the areas in which the EEOC will focus its litigation and investigation resources in the next four years. The Plan is notable for its emphasis on the “gig” workforce – that is, the short-term, temporary, or freelance workers (often working for companies like Uber, Lyft, AirBnb, or Taskrabbit) who are typically classified as independent contractors rather than employees.
In the Plan, the EEOC identified the rise of the “gig” economy as an “emerging and developing issue” warranting increased focus, particularly with regard to “clarifying the employment relationship and the application of workplace civil rights protections in light of the increasing complexity of employment relationships and structures, including temporary workers, staffing agencies, independent contractor relationships, and the … Read More »
Careful, Your Website is Showing! Retailers Should Start Preparing for Website Accessibility Class Actions
By Kate S. Gold, Michael P. Daly, Bradley J. Andreozzi and Alexis Burgess
Retailers have been the predominant targets of a recent wave of demand letters claiming that their websites and mobile applications unlawfully discriminate against disabled customers. These demands come on the heels of the Department of Justice’s (DOJ) confirmation that, in 2018, it will propose accessibility standards for private businesses, based on the accessibility standards it has already proposed for public entities. Even with two months left in the year, 2016 has already seen more single-plaintiff and class action lawsuits actually filed against retailers on this issue than ever before. In the face of an increasingly active plaintiffs’ bar, any retailer with a commercial website or mobile application—especially those operating in California, New York, or Pennsylvania, where the majority of these suits have been filed—should take notice and prepare … Read More »
By Mark Terman and Gerald T. Hathaway
The Department of Labor’s May 16, 2016 Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees require that, by December 1, 2016, employees must be paid a weekly salary of at least $913 (annually, $47,476) to maintain “white collar” exemption from overtime and other federal Fair Labor Standards Act requirements, as long as the employees’ duties satisfy the exemption rules too. We wrote about this previously.
Last month, twenty-one states, led by Nevada and Texas, filed an emergency motion to enjoin implementation of the Final Rule in a federal court action commenced the month before. State of Nevada, et al. v. DOL (USDC, Eastern District of Texas, case No., 4:16-cv-00731-ALM). At its core, the action challenges DOL authority to increase the salary threshold and set automatic increases, and … Read More »
By James G. Lundy, Shavaun Adams Taylor and Matthew M. Morrissey
The Securities and Exchange Commission (SEC or Commission) Office of Compliance Inspections and Examination (OCIE) issued a Risk Alert on October 24, 2016, titled “Examining Whistleblower Rule Compliance.” This recent Risk Alert continues the SEC’s aggressive efforts to compel Rule 21F-17 compliance and puts the investment management and broker-dealer industries on formal notice that OCIE intends to scrutinize registrants’ compliance with the whistleblower provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank). By way of background, Dodd–Frank established a whistleblower protection program to encourage individuals to report possible violations of securities laws. Importantly, in addition to providing whistleblowers with financial incentives, Rule 21F-17 provides that no person may take action to impede a whistleblower from communicating directly with the SEC about potential securities law violations, including by … Read More »
Under New OSHA Rules, Employers May Not Conduct Post-Accident Drug Tests Simply as a Matter of Course
By Laurie A. Holmes and Matthew A. Fontana
A mandatory drug and alcohol test after a workplace injury seems like a no brainer, right? Most companies believe so, which is why mandatory drug and alcohol testing after workplace injuries has become a common policy. However, new Occupational Health and Safety Administration (“OSHA”) regulations on electronic reporting of workplace injuries cast doubt on the continued legality of such policies. Specifically, OSHA’s new position is that mandatory post-injury testing deters the reporting of workplace safety incidents by employees and therefore employers who continue to operate under such policies will face penalties and enforcement scrutiny. In light of OSHA’s enforcement position, it is time for your company to review and revise its mandatory post-accident drug and alcohol testing policy.
Effective August 10, 2016, OSHA’s final rules on electronic reporting of workplace injuries require employers to … Read More »
Antitrust Authorities Warn Human Resources Professionals about Illegal Agreements That Restrain Competition for Employees
By Robert Skitol, David Woolf, and Robin Sampson
On October 20, 2016, the United States Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) issued “Antitrust Guidance for Human Resource Professionals” regarding antitrust prohibitions of agreements that restrain competition for employees’ services. (Click the following links for a copy of this guidance, and the accompanying press release.) The guidance addresses business-to-business agreements regarding employee non-hiring and recruitment, and is intended to both remind HR professionals that these agencies have challenged such types of understandings over the past several years, and warn employers that the DOJ, in particular, intends to begin prosecuting at least some employers criminally in the months and years ahead.
The overall message is that employees are entitled to all of the benefits of competition for their services and that the FTC and DOJ are now increasing scrutiny of all … Read More »
By Pascal Benyamini
Governor Brown has this year signed several new laws impacting California employers, some of which have already gone into effect and others that will be effective or operative in 2017 or later. A summary of key new laws follows. The effective date of the particular new law is indicated in the heading of the Assembly Bill (AB) and/or Senate Bill (SB). The list below is in numerical order by the AB or SB.
ABX2-7 – Smoking in the Workplace (Effective June 9, 2016)
By way of background, California law already prohibited smoking of tobacco products inside an enclosed at a place of employment for certain employers. This Bill amends Labor Code Section 6404.5 and expands the prohibition on smoking of tobacco products in all enclosed places of employment to all employers of any size, including a place of employment where … Read More »
My House My Rules: California Reigns In Employers’ Use Of Forum-Selection and Choice-of-Law Clauses to Avoid California Law
By Philippe A. Lebel
Last week, California Governor Jerry Brown signed into law Senate Bill 1241 (“SB 1241”). The new law (available here), which takes effect on January 1, 2017, adds section 925 to the California Labor Code (“Section 925”). In general, Section 925 will prohibit employers from requiring California-based employees to enter into agreements requiring them to: (1) adjudicate claims arising in California in a non-California forum; or (2) litigate their claims under the law of another jurisdiction, unless the employee was represented by counsel. Section 925 represents a considerable limit on parties’ rights to contract and may be the end of forum-selection and choice of law provisions, currently common in employment agreements.
For years, employers based outside of California have incorporated forum-selection and/or choice-of-law provisions in agreements with their California employees. Some employers used these provisions to create company-wide uniformity … Read More »
By Kate S. Gold and Philippe A. Lebel
On September 14, 2016, Representative Eleanor Holmes Norton (D – D.C. At Large) introduced the Pay Equity for All Act of 2016 (the “PEAA”) in the U.S. House of Representatives. In relevant part, the PEAA would amend the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201 et seq., to prohibit employers from asking prospective employees about their previous wages or salary histories, including benefits or other compensation. In addition to prohibiting these pre-hire inquiries, the PEAA prohibits employers from seeking out the information on their own. The PEAA prohibits employers from retaliating against any employee or applicant because the employee opposed any practice unlawful under the law or for testifying or participating in any investigation or proceeding relating to any act or practice made unlawful by the PEAA. Any “person” … Read More »
By Alexa E. Miller, Kate S. Gold and Lynne A. Anderson
Maryland joins California, New York and Massachusetts by passing legislation aimed at combating wage disparity based on gender. (For a discussion on California, New York and Massachusetts’s Equal Pay Laws, click on our previous posts.)
Expanding Equal Pay for Equal Work
The new law, which goes into effect October 1, 2016, amends Maryland’s existing Equal Pay for Equal Work Act by expanding the prohibition on wage discrimination based on “sex” to also include “gender identity.” The protection against pay discrimination for work performed in the same establishment and of comparable character or on the same operation encompasses more than just unequal payment of wages. The new law also bars discrimination for “providing less favorable employment opportunities,” which includes: (1) assigning or directing an employee into a less favorable career track or … Read More »
By Stephanie Dodge Gournis and Shavaun Adams Taylor
Illinois is now the second state to require that employers provide unpaid bereavement leave to eligible employees under its Child Bereavement Leave Act. This Act provides that employers with at least 50 employees must provide two weeks (10 working days) of unpaid leave due to the loss of a child. In the event of death of more than one child in a 12-month period, an employee is eligible for up to six weeks of bereavement leave.
The Act defines “employers” and “employees” in the same manner as they are defined under the Family Medical Leave Act (FMLA). Thus, an employee will be eligible for child bereavement leave under Illinois law if the employee has been employed by the employer for at least 12 months and has worked at least 1250 hours during the … Read More »
By Thomas J. Barton and Matthew A. Fontana
In last week’s blog entry, Lynne Anne Anderson highlighted the increasing number of states that mandate employers to provide school related unpaid leave for parents. This week’s entry looks at another growing trend in the employee leave space, paid sick leave. An increasing number of states and localities now provide paid sick leave. It is important that both employers and employees are aware of this trend and whether these laws apply to their locality or state.
The following states (and District of Columbia) have paid sick leave laws:
Amount of Paid Sick Time:
Can Sick Time Be Used to Care for Loved Ones:
Hourly workers in certain “service” occupations who work for businesses with 50 or more employees. 
Up to 40 hours per year
Yes: children and spouses.
Workers employed in California for 30 or more days a years, … Read More »
By Melissa Provost
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, … Read More »
By Pascal Benyamini
Earlier this week, the Ninth Circuit Court of Appeals issued a ruling in Morris v. Ernst & Young and aligned itself with the Seventh Circuit 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) by “requiring employees to sign an agreement precluding them from bringing, … Read More »
By Lynne Anne Anderson
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:California – 40 hours (but no more than 8 per month)
District of Columbia – 24 hours
Illinois – 8 hours (no more than 4 on any day, and only when no other type of employee leave is available)
Louisiana – 16 hours
Massachusetts – 24 hours
Minnesota – 16 hours
Nevada – 4 hours
North Carolina – 4 hours
Rhode Island – 10 hours
Vermont – 24 hours (no more than 4 in any 30-day period)
Many of these state laws provide for leave beyond the standard school concert or … Read More »
By Lawrence J. Del Rossi
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 … Read More »
By Mary Hansen and Rachel Share
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 … Read More »
By Lynne A. Anderson
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 … Read More »
By Kate S. Gold
Traci Ribeiro’s class action lawsuit against her employer Sedgwick LLP is the latest in a string of lawsuits in the pay equity battle, which has been highlighted in this year’s Presidential election and through the recent EEOC claim filed by the U.S. womens’ soccer team. Ribeiro is a non equity partner who claims that, as one of the firm’s three highest revenue generating partners, she has been denied equity partnership and was subjected to retaliation for filing an EEOC complaint claiming gender discrimination. She seeks to represent a class of past and present female attorneys in partnership track positions at the firm; her complaint alleges violations of the California Fair Pay Act, Illinois Fair Pay Act, and Federal Equal Pay, as well as gender discrimination and retaliation under the California FEHA, Illinois Human Rights Act, and Title … Read More »
By Valerie Dutton Kahn
As you may have heard, the Equal Employment Opportunity Commission (“EEOC”) released revised EEO-1 reporting guidelines on July 13, 2016 (for an overview of the new guidance in its entirety, see EEOC Issues Revised EEO-1 Proposal). These new guidelines apply to employers with 100 or more employees and require them to report, among other things, hours worked by exempt and non-exempt employees, subdivided by gender, race, ethnicity, job classification, and pay band. For an example of the proposed new reporting form, click here. Although employers and other members of the public will have until August 15, 2016 to comment on the revised proposal, it is unlikely that any further substantive revisions will be made. Currently, it appears that employers will be required to submit the new EEO-1 form on March 31, 2018, giving them approximately a year … Read More »
By William R. Horwitz
The U.S. Court of Appeals for the Seventh Circuit issued a significant decision last week addressing the compensation of tipped employees who perform non-tipped work. In Schaefer v. Walker Bros. Enterprises, 2016 WL 3874171 (7th Cir. July 15, 2016), a restaurant server in Illinois pursued a class and collective action alleging, among other things, that his employer violated state and federal wage and hour laws by failing to pay servers minimum wage for the time they spent on non-tipped duties. The Seventh Circuit affirmed summary judgment dismissal of the lawsuit. The Court held that an employer may compensate a tipped employee at the reduced “tip credit rate” of pay for: (1) limited non-tipped work incidental or related to tipped work; and (2) other negligible non-tipped work. The decision provides helpful guidance to restaurant employers regarding the types of duties … Read More »
By Lynne Anderson
The EEOC published its revised proposal for the new EEO-1 report today. The revised proposal came after extensive, and polarized, comments on the EEOC’s prior proposal this Spring. The prior proposal revised the existing EEO-1 report to require disclosure of data on pay ranges and hours worked in addition to the already required reporting on workforce profiles by race, ethnicity and gender. The revised proposal released today still requires reporting of this data. The EEOC has not changed course on its plan to use the data to identify discriminatory pay practices and target companies for investigations and class action equal pay lawsuits – without having to identify an injured party plaintiff. The primary change in the revised proposal is that the first date by which employers will have to submit the new EEO-1 report has been moved from … Read More »
By Stephanie Dodge Gournis, Gerald Hathaway, and Mark Foley
On June 27, 2016, a Texas federal court granted a preliminary injunction preventing the Department of Labor (DOL) from moving forward on a nationwide basis with the July 1st enforcement of its Final Rule Interpretation of the “Advice” Exemption to Section 203(c) of the Labor Management Reporting and Disclosure Act (LMRDA) (also known as the DOL’s “Persuader Rule”). The court order was based on findings that plaintiffs in the case of National Federation of Independent Business, et al. v. Perez, 5:16-cv-00066-C, were likely to succeed on the merits of their claims in establishing that the DOL’s Persuader Rule is inconsistent with federal law and exceeds the DOL’s statutory authority.
The LMRDA requires employers and labor relations consultants (including attorneys) to report certain agreements and arrangements (and payments made pursuant to such agreements/arrangements) under … Read More »
By Noreen Cull
The Equal Employment Opportunity Commission (EEOC) has published a new rule in the Federal Register that will more than double the monetary penalty for employers that violate the notice-posting requirements of Title VII and other nondiscrimination statutes. Click here to view the rule on the Federal Register’s website.
Effective July 5, 2016, the maximum penalty for violating the notice posting requirements will be $525 per violation, a substantial increase from the previous penalty of $210 per violation.
Employers covered by Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act are required to post notices in the workplace that describe the key provisions of these statutes. According to the EEOC, “[s]uch notices must be posted in prominent and accessible places where notices to employees, applicants and members are customarily maintained.” … Read More »
Split Circuit Court Decisions Create Uncertainty on Class Action Waivers and likely Supreme Court Review
By Vik Jaitly
Last week the 7th Circuit U.S. Circuit Court of Appeals, in Lewis v. Epic-Systems Corp., held that a company’s arbitration agreement, which prohibits employees from participating in “any class, collective or representative proceeding,” violated an employees’ right to engage in concerted activity under the National Labor Relations Act (NLRA). The ruling creates a circuit split on the enforceability of class action waivers because the 2nd, 5th, and 8th Circuits each have held that class action waivers do not violate an employee’s rights under the NLRA. Because of this circuit split, it is likely that the Supreme Court will visit this issue in the near future.
Background on Enforceability of Class Action Waivers
In recent years, federal courts have largely upheld arbitration pacts with class or collective action waiver language that provides that not only must an employee bring his or … Read More »
By Valerie Dutton Kahn
It’s an employer’s worst nightmare: you discover that a former employee has stolen a company trade secret. You know you must act immediately to keep this extremely important and sensitive information from being disseminated or risk losing important intellectual property protection. However, protecting a misappropriated trade secret is very difficult, particularly in situations where the suspected misappropriator is unlikely to follow a court order. Thankfully, the recently passed Defend Trade Secrets Act (“DTSA”) includes helpful seizure provisions an employer may use to recover and prevent dissemination of trade secrets from suspected misappropriators.
What Is The Defend Trade Secrets Act?
President Obama signed the DTSA into law on May 11, 2016. This new law is effective immediately and provides a nation-wide civil cause of action for misappropriation of trade secrets. Although companies may still pursue trade secret litigation under state … Read More »
By Stephanie Dodge Gournis, Dennis M. Mulgrew, Jr. and Shavaun Adams Taylor
Making good on a 2014 directive from President Obama “to modernize and streamline” existing overtime regulations, the Department of Labor (DOL) today published its highly anticipated Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. As expected, the Final Rule (which becomes effective December 1, 2016 ) more than doubles the current $455 weekly minimum salary required for employees to qualify for “white collar” exemptions to the minimum wage and overtime requirements under the Fair Labor Standards Act (FLSA). The DOL expects its new Final Rule to extend minimum wage and overtime protections to more than 4.2 million Americans and increase employee wages by $12 billion over the next 10 years.
Key Changes under the DOL’s Final Rule
The FLSA requires that … Read More »
By Kelly Petrocelli
It’s been a busy and, let’s say notable, week in the area of employment law. Here’s a quick recap, with more to come in future posts, of what you may have missed if you were focused elsewhere this week.
First, OSHA published a new injury Rule this week. While it does not take effect until January 1, 2017, employers should not wait until then to begin thinking about what changes may be necessary to ensure full compliance in the new year. The rule changes create a new cause of action for employees if they suffer retaliation for reporting a workplace injury, and employers are expected to ensure that policies addressing safety do not discourage employees from reporting such injuries. Large employers will also have some additional reporting requirements to OSHA. And, significantly, and in line with the current administration’s … Read More »
By Jessica Burt
The New York City Earned Sick Time Act, originally enacted in June 2013, has been amended effective March 4, 2016. The Earned Sick Time Act generally requires employers with five or more employees in New York City to provide eligible employees up to 40 hours of paid sick leave each year for themselves or eligible family members. The new rules clarify parts of the Earned Sick Time Act, establish requirements to carry it out and meet its goals, and provide guidance to covered employers and protected employees.
Written Sick Time Policies
Employers may no longer distribute the Notice of Employee Rights promulgated by the Department of Consumer Affairs in lieu of distributing or posting their own written sick time policies. But it is important to note that distribution of the Notice of Employee Rights is still required.
The Amended Act further … Read More »
By Thomas J. Barton
Title III of the ADA provides that “no individual shall be discriminated against on the basis of disabilities in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or any accommodations of any place of public accommodation….” 42 U.S.C. §12812(a). When the ADA was enacted in 1991, Congress contemplated physical access to places of public accommodation, such as hospitals, schools, housing, restaurants, and retail stores. At that time, Congress did not foresee the rise of the internet or the proliferation of sales of goods and services through retail websites, and therefore did not provide any guidance as to whether or the extent to which retail websites were governed by the ADA’s accessibility requirements.
Originally initiated by the National Federation for the Blind and other advocacy groups, a cottage industry has sprung up challenging … Read More »
Paid Parental Leave: San Francisco Will Require Employers to Provide Paid Leave and California Will Increase Benefits Available Under State Law
By Kate S. Gold, Mark E. Terman, Ramon A. Miyar, and Vik C. Jaitly
On Tuesday, April 5, 2016, the San Francisco Board of Supervisors unanimously approved legislation that would require private employers in the city to provide partial compensation to employees taking leave to bond with a newborn child under the California Paid Family Leave (“PFL”) program. In practice, when combined with existing partial wage replacement from the PFL program, employees who earn up to a maximum of $106,000 annually will receive complete wage replacement during a covered parental leave as a result of the legislation. If the ordinance is signed into law, San Francisco will become the first municipality in the United States to enact such a program.
Before becoming law, the proposed legislation will need to be approved in a second vote by the Board of Supervisors and signed … Read More »
By Lynne Anderson
The U.S. Department of Labor (DOL) released a proposed rule that requires federal contractors and subcontractors to provide workers with seven days of paid sick leave on an annual basis. The proposed rule, released on Feb. 25, was created in response to President Barack Obama’s Executive Order 13706, which directed the DOL to issue and finalize regulations this year.
The proposed rule is projected to extend paid sick leave to more than 800,000 employees, 400,000 of which don’t currently receive any paid sick leave, within a five-year period, according to DOL estimates.
Although the DOL has extended the comments period on the proposed rule through April 12, employers and human resources professionals should start preparing for implementation. Here are three things companies can do to prepare:
1. Review and revise policies
HR professionals should compare their employer’s existing policies with the … Read More »
By Philippe A. Lebel and Thomas J. Barton
On April 4, 2016, the California Supreme Court issued an opinion concerning the Industrial Welfare Commission’s (IWC) Wage Orders’ suitable seating rules. According to the California Supreme Court, whether an employer must provide seating while employees are actively engaged in duties depends on employees’ tasks performed at given work locations. The Court determined that if the tasks being performed at any given location reasonably permit sitting, and provision of a seat would not interfere with performance of any other tasks that may require standing, an employer must provide a seat. The Court held that the determination of whether work “reasonably permits” sitting is a question to be resolved objectively, based on the totality of the circumstances. While an employer’s business judgment and the physical layout of the workplace are relevant factors, they are … Read More »
By Thomas J. Barton and Ramon Miyar
Last week, in Tyson Foods, Inc. v. Bouaphakeo et al., No. 14-1146, the United States Supreme Court ruled that class certification was appropriate in a wage and hour class and collective action, despite the lack of individualized evidence for the amount of uncompensated time worked by each class member. The Court instead allowed the employees to use a statistical expert who conducted representative time studies to determine the average number of minutes that the employees spent on pre-shift and post-shift activities. The Court rejected Tyson’s arguments against the use of representative sample averaging, including Tyson’s reliance on Wal-Mart Stores. Inc. v. Dukes, 564 U.S. 338 (2011), which denied certification in a nationwide Title VII class because liability and damages would require individualized proof.
Plaintiff employees in Tyson worked at Tyson Foods, Inc.’s (“Tyson”) pork-processing facility … Read More »
By Kate S. Gold, Heather B. Abrigo and Philippe Lebel
Employee payroll audits, which have long been recommended as a best practice for corporations that want to stay on the right side of the law, have become even more critical with the current proliferation of labor and employment laws at the state level. Among other things, the California Fair Pay Act, which went into effect on January 1, 2016, places new demands on California employers that in many cases can only be effectively satisfied by means that include a payroll audit.
Earlier this month, we held a webinar to discuss the CA Fair Pay Act requirements and what employees should do to comply. Below you will find some of the key takeaways.
What is the California Fair Pay Act?
The new law goes further and imposes more obligations on employers than longstanding federal and … Read More »
By Pascal Benyamini
Did you recently update your workplace posters? Time to do it again.
In California, all employers have obligations to satisfy workplace posting, such as posting information related to wages, hours and working conditions. The workplace posters must be placed in an area frequented by employees where these posters may be easily read during the workday.
As a result of new amended regulations pertaining to the California Fair Employment and Housing Act (“FEHA”) going into effect on April 1, 2016, certain covered employers must post a new poster on April 1, 2016. Employers with 5 or more employees (full-time or part-time) are covered by the FEHA and must post a specific notice, which replaces Pregnancy Disability Leave (“PDL”) Notice A. This new poster, titled “Your Rights and Obligations as a Pregnant Employee,” provides clarifications of the PDL, including, but not limited … Read More »
By Lawrence J. Del Rossi
Referred to by some courts as an “awkward theory” of liability, employers and supervisors should be aware that courts in New Jersey continue to recognize the viability of individual liability claims under the “aiding and abetting” provision of the New Jersey Law Against Discrimination, N.J.S.A. §10:5-12(e).
Personal Liability for Supervisors: Title VII vs. NJLAD
Unlike Title VII of the federal Civil Rights Act, which does not provide for individual employee liability, New Jersey courts have held that in addition to “employers” being liable under NJLAD, supervisors can be personally liable for their illegal conduct under an “aiding and abetting” theory. The New Jersey Supreme Court recently clarified the expansive definition of “supervisor” for purposes of the NJLAD as an employee who is (1) authorized to undertake tangible employment decisions affecting the plaintiff, or (2) authorized by the … Read More »
By Maria L. H. Lewis and Dennis M. Mulgrew, Jr.
As we have previously covered here, here and here, the NLRB has opined that various common handbook provisions are unlawful under the NLRA because they may have the effect of inhibiting employees from engaging in protected activities, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.
Last week, an NLRB judge provided further guidance in this area in ruling in Chipotle Services LLC and Pennsylvania Worker’s Organizing Committee (Nos. 04-CA-1437314; 04-CA-149551) that Chipotle violated the NLRA by maintaining unlawful policies, improperly forcing an employee to delete social media posts critical of Chipotle, and terminating the employee for his attempts to have his co-workers sign a petition protesting Chipotle’s alleged denial of work breaks.
The last part of the ruling was not entirely surprising – the facts strongly indicated … Read More »
By Philippe A. Lebel
On April 1, 2016, the California Fair Employment and Housing Council’s (FEHC) new Fair Employment and Housing Act (FEHA) regulations take effect. The overarching purpose of the new FEHC regulations is to harmonize the regulations with recent court decisions. However, employers should take note of some of the more significant changes the new regulations impose, including: (a) expanding and clarifying the scope of employers covered under the FEHA; (b) requiring employers to develop specific, detailed anti-discrimination/anti-harassment policies and internal procedures; and (c) enlarging employers’ training and related recordkeeping obligations. Notably, the new regulations also clarify employers’ potential liability for claims regarding alleged failure to prevent unlawful harassment or discrimination, as well as the remedies available.
More Employers Are Covered
The FEHA only covers employers who regularly employ five or more persons. See Cal. Gov’t Code § 12926(d). Under … Read More »
Possible Amendment to New Jersey’s Anti-Discrimination Law Would Likely Mean More Claims, Greater Liability Risks and Larger Damages Awards
By David Woolf and Vik Jaitly
Earlier this week, the New Jersey General Assembly passed a bill that would amend the New Jersey Law Against Discrimination (“NJLAD”) to address specifically pay differentials among employees of different sexes who perform “substantially similar” work. The amendment, which the state Senate passed last month, will now be delivered to the Governor for consideration.
As the NJLAD exists now, an employee can bring a pay-related claim only by alleging that the differential amounts to sex discrimination and satisfying a comparatively higher standard. If the bill is signed into law, New Jersey would follow in the footsteps of other states like New York and California, which have recently updated their discrimination laws to provide a separate cause of action specifically for unequal pay.
The bill, if enacted into law, would severely limit the circumstances under which an employer … Read More »
In FLSA Settlements, the Permissible Scope of Releases and Confidentiality Provisions May Be Broader Than You Think
By William R. Horwitz
Courts and the U.S. Department of Labor (“DOL”) often refuse to approve Fair Labor Standards Act (“FLSA”) settlements: (1) in which the employee’s release of claims is not narrowly limited to wage claims; or (2) that seek to restrict public disclosure of the settlement terms. Because FLSA settlements are arguably only enforceable if approved by a court or the DOL, these conditions sometimes impede the ability of parties to resolve FLSA disputes. A recent court decision may offer a solution. In Lola v. Skadden, Arps, Meagher, Slate & Flom LLP, 2016 BL 29709 (S.D.N.Y. Feb. 3, 2016), the Honorable Richard J. Sullivan, U.S.D.J., allowed the parties more leeway in resolving FLSA claims, adopting an approach likely to facilitate settlements.
Plaintiff David Lola, an attorney, worked for a staffing agency that placed him at the law firm of Skadden, Arps, … Read More »
In Wiest v. Tyco Electronics Corp., the Third Circuit Further Clarifies a Plaintiff’s Prima Facie Burden for a Retaliation Claim under SOX
By Gerald T. Hathaway and Dennis M. Mulgrew, Jr.
Wiest v. Tyco Electronics Corp., a case that has been closely watched by Sarbanes-Oxley (“SOX”) practitioners, may have finally come to a close after nearly six years of litigation. In its decision (click here to view), the Third Circuit affirmed the District Court’s granting of summary judgment for Tyco, and provided additional clarification on what a plaintiff must do to make out a prima facie retaliation claim under SOX.
Tyco asserted that it fired Plaintiff Jeffrey Wiest in 2008 for inappropriate sexual relations with two female co-workers and sexual harassment. He then brought suit under SOX, alleging that Tyco terminated him for raising concerns to his managers about excessive corporate expenditures.
The case has twice been on appeal to the Third Circuit. In 2010, Tyco successfully moved to dismiss Wiest’s complaint on the basis that … Read More »
By Noreen Cull and Shavaun Adams Taylor
On the seventh anniversary of the federal Lilly Ledbetter Fair Pay Act, the Equal Employment Opportunity Commission (“EEOC”), in partnership with the U.S. Department of Labor, Office of Federal Contract Compliance Programs (“OFCCP”), announced a proposed rule to collect data from employers that will be used to identify discriminatory pay practices. Under the proposed rule, companies with 100 or more employees, both private employers and federal contractors, would be required to report wages from W-2 earnings and total hours worked for all employees by sex, race, and ethnicity within a 12-month period. It is projected that these new proposed requirements will affect over 63 million employees.
This proposed rule is now in the comment period until April 1, 2016. The EEOC also plans to conduct a public hearing regarding the new rule at some point. … Read More »
By Kate S. Gold and Philippe A. Lebel
On January 20, 2016, the U.S. Department of Labor’s (“DOL”) Wage and Hour Division issued an Administrator’s Interpretation (“Interpretation”) significantly expanding the definition of a “joint employer” under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. The DOL’s new approach, which relies in part on regulations promulgated under the Migrant and Seasonal Worker Protection Act (“MSPA”), 29 U.S.C. §§ 1801, shifts the focus of the analysis toward “economic realities.” If followed, the DOL’s approach potentially expands liability for wage and hour violations such as overtime pay to entities that do not directly employ workers, but that have contracted with third parties for labor.
In the introductory paragraphs of the Interpretation, the DOL implies its motive in promulgating the new standard is to protect a larger number of workers and to … Read More »
By Vik C. Jaitly
In a recent published opinion, the New Jersey Appellate Division held that an arbitration clause in an employee handbook was unenforceable because the handbook also contained standard disclaimer language stating that the handbook did not create an employment contract. The Court’s decision, in Morgan v. Raymours Furniture Co., Slip Op. A-2830-14T2, 2015 WL 9646045 (N.J. App. Div. Jan. 7, 2016), makes clear that arbitration agreements should ideally be separate, stand-alone documents, not provisions in employee handbooks.
On three occasions during the course of his employment with defendant Raymours Furniture Company (“Raymours”), plaintiff Grant Morgan acknowledged receipt of an employee handbook. The handbook included a mandatory arbitration clause and a waiver of the employee’s right to sue in court. According to Morgan, after he complained about age discrimination in the workplace, Raymours presented him with a separate, stand-alone arbitration … Read More »
By Mark Terman
*Originally published by CalCPA in the January/February 2016 issue of California CPA — the original article can be found here.
Many California employers feel over-regulated—and under-appreciated. Yet, surprisingly, proposed new regulation of employers has declined. In 2015, 224 bills introduced in the California Legislature mention “employer,” compared to 574 in 2014. Most of those bills did not pass, and of the ones that did, most were not signed into law by Gov. Brown. One veto blocked a bill (AB 465) that would have made pre-dispute arbitration agreements made as a condition of employment—the kind that are in widespread use across the state—unlawful. Another veto rejected a bill (AB 676) reintroduced this year that would have penalized employers for limiting job prospects of, or discriminating against, applicants who are not currently employed.
Key elements of some of the bills that became … Read More »
By Dennis Mulgrew
A growing number of jurisdictions around the country have enacted so-called “ban the box” laws, which limit employers’ ability to inquire about and/or consider applicants’ criminal records when making employment decision.
In 2011, Philadelphia enacted the Fair Criminal Records Screening Standards Ordinance, its version of “ban the box.” This past week, the ordinance was amended to significantly expand the scope of prohibited activity and the protections provided to applicants, in the following respects:
Covered Employers – The amended ordinance covers private employers employing any persons within Philadelphia, whereas the previous version applied only to those with ten or more employees.
Timing of Criminal Record Inquiry – Employers may now conduct a criminal background check only after a conditional offer of employment has been made, whereas previously employers were permitted to conduct the check after an application was received. Further, the revised … Read More »
By Daniel Aiken and Philippe Lebel
On December 14, 2015, the U.S. Supreme Court reaffirmed its previous ruling that any state law that treats arbitration agreements less favorably than other types of agreements is preempted by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq. Specifically, in a decision handed down in DIRECTV, Inc. v. Imburgia, No. 14-462, reaffirmed its decision in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), that the Federal FAA, which embodies the federal policy favoring arbitration, preempts all special state law rules that uniquely burden arbitration agreements. Although the Imburgia decision was a consumer class action, the Court’s approach indirectly confirms its continued support for the enforceability of employment arbitration agreements, including those with class action waivers. While Imburgia suggests that class action waivers are here to stay, the Court’s simultaneous decision to … Read More »
California’s Fair Pay Act, which takes effect Jan. 1, 2016, mandates that male and female employees doing “substantially similar” work be paid the same wages, unless employers can demonstrate that certain factors such as seniority, a merit system, education, training, experience or productivity can account for the gender disparities. As 2015 winds down, other companies either based in California or operating in the state may still be scrambling to ensure they’re prepared for the new law.
SHRM Online asked Los Angeles partner Mark Terman, as well as two other industry experts, to share their views about statistical analyses, labor law and compliance measures related to the Fair Pay Act.
Please click here to view the entire Q&A at SHRM Online.
Pennsylvania Supreme Court Finally Kills Hope That Magic Words Can Substitute for Valuable Consideration in Exchange for Post-Offer Restrictive Covenants
By Daniel Aiken and Vik Jaitly
To most practitioners, Pennsylvania law governing the consideration required for an employment agreement containing a restrictive covenant (e.g., a non-competition clause or non-solicitation clause) has been simple: (1) if the restrictive covenant is entered at the inception of the employment, the consideration to support the covenant is the award of the position itself; (2) if the restrictive covenant is entered during employment (i.e., post-offer), it is enforceable only if the employee receives new and valuable consideration—that is, some corresponding benefit or a favorable change in employment status. To avoid the need to provide a current employee additional consideration, some employers added magic language to their restrictive covenants, based on a statute from 1927, which arguably made a restrictive covenant enforceable without new consideration.
Specifically, the Uniform Written Obligations Act (“UWOA”) states that a written promise “shall … Read More »
By David Woolf
National Labor Relations Board activity in the area of work rules, among other areas, has become the new normal. Employers have come to expect that the Board will find a work rule unlawful if the rule, taken literally, could hypothetically interfere with an employee’s right to engaged in “concerted activities” – legal speak for two or more employees raising issues about the terms or conditions of their employment. Now, the Board is also finding success on appeal.
Most recently, the District of Columbia Court of Appeals decided Hyundai America Shipping Agency, Inc. v. NLRB, a case in which Hyundai appealed the Board’s finding that certain work rules in its handbook violated the National Labor Relations Act because they had a tendency to interfere with its employees’ right to engaged in concerted activities. Those work rules included: (1) a prohibition … Read More »
Standards of Proof in Employment Wage and Hour Class Actions Remain a Hot Topic for U.S. Supreme Court
By Lawrence J. del Rossi
Last week the United States Supreme Court heard oral arguments in a donning and doffing class and collective action against Tyson Foods, Inc. (see full transcript of oral argument here) that has the potential to dramatically expand the certification of class and collective wage and hour “off-the-clock” actions.
The Fictional “Average Employee”
One of the primary issues in Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, is whether the plaintiffs’ use of statistical averages in a Fair Labor Standards Act (“FLSA”) case was appropriate to certify a federal Rule 23(b)(3) damages class and to prove liability and damages at trial. The plaintiffs relied on expert testimony to prove that a class of more than 3,000 workers at an Iowa pork processing plant were owed overtime wages for time spent donning and doffing personal protective equipment and walking to and … Read More »
By Dennis Mulgrew
Local governments or voters often pass statutes or ordinances on employment-related subjects that require employers to ensure that their policies are compliant not just on a state-by-state basis, but even on a city-by-city or county-by-county basis within the same state. During this past week’s election, voters around the country considered a number of local employment-related ballot initiatives, some noteworthy examples of which are below:
Voters in Elizabethtown, New Jersey Approve Paid Sick Leave
Elizabethtown, New Jersey joins a number of other cities (including several in New Jersey) in enacting a paid sick leave ordinance. Voters approved a measure that requires employers to offer one hour of paid sick time to employees for each 30 hours worked.
Voters in Houston, Texas Reject Anti-Discrimination Ordinance
Many cities have enacted local anti-discrimination ordinances which complement or mirror anti-discrimination statutes under state and federal law. In … Read More »
By Cheryl Orr and Alejandra Lara
The EEOC, and at least some Plaintiffs’ lawyers, are taking the position that employers may not offer more parental leave to a birth mother than to a father, unless justified by medical necessity. Any other outcome, they claim, would constitute discrimination against men on the basis of sex.
This Summer (on June 25, 2015), the Equal Employment Opportunity Commission issued the EEOC Enforcement Guidance on Pregnancy Discrimination and Related Issues on June 25, 2015. The EEOC’s new guidance states that any parental leave must be provided to similarly situated men and women on the same terms. Further, according to this guidance, companies may offer longer leaves to biological mothers than to fathers, only if the difference in length of leave is justified by a medical necessity. The EEOC gives the example of the following policy that … Read More »
By William R. Horwitz
According to the U.S. Court of Appeals for the Second Circuit, a District Court erred when it held that reducing an employee’s discretionary bonus cannot constitute an “adverse employment action” – a necessary element of a discrimination claim. The Second Circuit issued its decision last week in Davis v. New York City Dep’t of Educ., 2015 WL 6118183 (2d Cir. Oct. 19, 2015). In Davis, the District Court had relied on Seventh Circuit precedents in reaching its holding, but the Second Circuit clarified that those precedents “are not the law in this circuit.” Although Davis is a disability discrimination case, the Second Circuit signaled that the same principle applies to other types of discrimination cases as well.
The Americans With Disabilities Act (the “ADA”) prohibits an employer from discriminating “against a qualified individual on the basis of … Read More »
By Pascal Benyamini
Governor Brown has signed several laws impacting California employers. A summary of some of the key new laws follows. The effective date of the particular new law is indicated in the heading of the Assembly Bill (AB) and/or Senate Bill (SB). As a reminder, the minimum wage in California is increasing to $10 per hour on January 1, 2016 based on previous legislation signed by Governor Brown in 2013.
AB 622 – E-Verify System (Effective January 1, 2016)
By way of background, under U.S. law, companies are required to employ only individuals who may legally work in the United States – either U.S. citizens, or foreign citizens who have the necessary authorization. E-Verify is an internet-based system that allows employers to determine the eligibility of their employees to work in the United States. The E-Verify system is administered by the … Read More »
On October 15, Florham Park partner Lynne Anderson will speak at Seton Hall’s U.S. Healthcare Compliance Certification Program. The event, which will take place from October 12-15, offers a comprehensive overview of state, federal and international law governing prescription drugs, medical devices, and healthcare fraud. Topics include privacy and data protection, anti-kickback laws, the Foreign Corrupt Practices Act and the False Claims Act. Attendees include representatives from pharmaceutical companies and hospitals.
Lynne will participate in the panel titled, “Being the Focus of a Government Investigation” to provide the perspective of dealing with an employee whistleblower. She will be joined by Mike Doyle of the Federal Bureau of Investigation; Jacob Elberg of the U.S. Attorney’s Office, District of New Jersey; Maureen Ruane of Lowenstein Sandler P.C.; Jim Sheehan of the Office of the New York Attorney General; and Professor Timothy Glynn of … Read More »
By Mark E. Terman and Shavaun Adams Taylor
In only a few months, employers in California will be subject to one of the strictest and most aggressive equal pay laws in the country. This week, Governor Jerry Brown signed the California Fair Pay Act (“Act”), Senate Bill 358, a new law intended to increase requirements for wage equality and transparency. The Act amends Section 1197.5 of the California Labor Code relating to private employment.
New “Substantially Similar Work” Standard
Under the Act, an employer is prohibited from paying employees of the opposite sex lower wage rates for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” Previously, the equal pay statute was more limited. It prohibited employers from paying employees of the opposite sex in the same establishment for equal work on … Read More »
New Jersey Supreme Court Holds That Economic Loss is Not Needed To Recoup a Former Employee’s Salary for Breach of the Duty of Loyalty
By Lynne Anne Anderson
On September 22, the New Jersey Supreme Court unanimously gave the green light to awards of the remedy of equitable disgorgement, even in the absence of economic loss, as a fair and practical response to an employee’s disloyal conduct. The Court also noted that the fear of disgorgement should serve to as a deterrent to employee misconduct. Bruce Kaye v. Alan P. Rosefielde (A-93-13) (073353), New Jersey Supreme Court.
The Facts of the Case
Bruce Kaye hired attorney Alan Rosefielde as a full-time, salaried employee after using him as outside counsel. Rosefielde served as Chief Operating Officer and General Counsel for some of Kaye’s timeshare businesses. Kaye terminated Rosefielde’s employment based on discovery of unauthorized self-dealing and other actions by Rosefielde that exposed Kaye’s companies to potential liability, and as result of dissatisfaction with Rosefielde’s job performance. Kaye … Read More »
By Dennis Mulgrew and Laurie Holmes
As we’ve previously covered here, on April 8, 2014 President Obama signed Executive Order 13665 (“Non-Retaliation for Disclosure of Compensation Information), at an event commemorating National Equal Pay Day, an annual public awareness event that aims to draw attention to the gender wage gap. On September 10, 2015, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) announced the Final Rule implementing the Order, which will take effect on January 11, 2016.
In its press release announcing the Final Rule, the DOL highlighted its intent to specifically address the gender pay gap, stating that “a culture of secrecy keeps women from knowing that they are underpaid, and makes it difficult to enforce equal pay laws. Prohibiting pay secrecy policies and promoting pay transparency helps address the persistent pay gap for women . . .”
The … Read More »
Obama Board Reaffirms Successor’s Right to Set Initial Terms of Employment when Taking Over Unionized Operation
By Gerald T. Hathaway or Shavaun Adams Taylor
Last week, the National Labor Relations Board issued a refreshingly employer-friendly decision which allowed a successor company to implement new pay terms without having to first bargain with the labor union. In Paragon Systems, Inc., 362 NLRB No. 182 (2015), a divided three-member Board panel held that the new guard service, Paragon Systems, Inc. (Paragon), had given sufficient notice to employees of a change in pay and therefore could assert its right to unilaterally set the initial terms and conditions of employment when it assumed a federal contract from the predecessor employer, MVM, whose work force was represented by The Federal Contract Guards of America International Union.
A Successor Can Make Unilateral Changes
In 2011, the Board reinstated the “successor bar” doctrine, where a union is presumed to retain its majority status when the … Read More »
By William R. Horwitz and Philippe A. Lebel
Yesterday, the National Labor Relations Board (the “NLRB” or “Board”) issued a decision greatly expanding the standard for determining whether a company may be deemed a “joint employer.” The Board’s decision, in Browning-Ferris Industries of California, Inc., overturned the narrower standard that the Board had been applying for 30 years. The impact on companies that rely on staffing agencies and contractors is likely to be significant and the effects may ripple into the world of franchised business.
The Previous Joint Employer Standard
The National Labor Relations Act (“NLRA”) imposes numerous obligations on employers, including the duty to bargain with a union that workers select as their designated representative. These obligations can extend to a company that does not directly employ the workers in a traditional sense, if the company is deemed to be a … Read More »
By Kate Gold
Last week, on August 7, 2015, the DLSE issued its first opinion letter interpreting the Healthy Workplaces, Healthy Families Act of 2014 (“Paid Sick Leave Law”), which is codified at California Labor Code section 245 et. seq. and which was recently amended by AB 304, effective July 13, 2015.
As most California employers should now be aware, the Paid Sick Leave Law generally requires employers to provide three days or 24 hours of paid sick leave to an employee who works at least 30 days within a year in California, including part-time, per diem, and temporary employees. Employers may either grant the paid leave up front or, alternatively, allow employees to accrue the paid time off. The question presented to DLSE was how to address the sick leave requirement for an employee who regularly works a ten-hour shift where … Read More »
By Maria Lewis and Jessica Burt
Last month, Waldron Mercy Academy, a K-8 Catholic school located in Merion, Pennsylvania, fired Margie Winters from her position as Director of Religious Education, a job she had held for 8 years. According to Ms. Winters, her employment contract was not renewed because she is gay and married to her partner. A few days later, the United States Supreme Court issued its landmark opinion in Obergefell v. Hodges, in which it held that same-sex couples may exercise the fundamental right to marry. The majority opinion in Obergefell stated that religious believers may continue to “advocate” and “teach” their views of marriage, but did not however, address or reverse the precedent established by the Supreme Court in Hosanna-Tabor Evangelical Lutheran Church and School v. Equal Employment Opportunity Commission, in which the Supreme Court held, in an … Read More »
By Pascal Benyamini
As California employers, and those non-California employers with employees in California, know by now, as of July 1, 2015, such employers were required to provide paid sick leave to any employee who works 30 days or more within a year under the Healthy Workplaces, Healthy Families Act of 2014 (the “HWHFA”).
The HWHFA provides, among other things, that eligible employees are entitled to paid sick days for prescribed purposes to be accrued at a rate of no less than one hour for every 30 hours worked, or alternatively, be provided at least 3 days or 24 hours on a lump sum method. The accrual rate method imposed by the HWHFA created several challenges for employers who were already providing paid sick leave, albeit under a different accrual method, such as per pay period, per month, per week etc. To … Read More »
By Lawrence J. Del Rossi
Are former employees in violation of non-solicitation agreements by using social media to contact their employer’s customers or co-workers? Florham Park Counsel, Lawrence Del Rossi, recently published an article in Law360 discussing the emerging trends regarding the role that social media plays in restrictive covenant case. He also provides practical guidance to employment law practitioners.
Read “Is Social Media Eroding Nonsolicitation Agreements?” here.
New Guidance Regarding Employee Handbooks Part Six: Ensuring Conflict of Interest Rules Don’t Inhibit Protected Concerted Activity
By Valerie Dutton Kahn
This post is the sixth in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules Here, Employee Conduct Rules, Rules Related to Company Logos, Copyright, and Trademark, Rules Restricting Photography and Recording and Rules Restricting Employees From Leaving Work. While the recent guidance was issued by the National Labor Relations Board (NLRB), (found here) this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.
Conflict of Interest Rules: A Balancing Act
Naturally, all employers would like to prevent their employees from engaging in activities that … Read More »
Bad News for Whistleblowers: New Jersey Supreme Court Rules Theft of Confidential Documents for Self-Help in Employment Lawsuit Can Result in Jail Time
By Lynne Anne Anderson
Does an employee have an unfettered right to take confidential documents from her employer to use in her discrimination and retaliation lawsuit against the employer? Not in New Jersey. The New Jersey Supreme Court recently ruled in State v. Ivonne Saavedra that the theft of a company’s confidential documents for self-help in an employment lawsuit can result in jail time.
Florham Park partner Lynne Anderson recently published an article in Law360 discussing the decision and its ramifications for employers and would-be whistleblowers.
Read “Woe To The NJ Whistleblower Who Whisks Away Documents” here.
An Employer’s Obligation to Follow up after Receiving a Medical Certification: Greater Than You Might Think
By David J. Woolf
If an employee seeks FMLA leave, she typically needs to ask for it. Likewise, it goes without saying that if an employee is asked to provide a medical certification in support of her request (something employers are free to seek) and fails to provide that information – or worse provides a certification indicating that she does not qualify for FMLA leave – the employer has no obligation to provide that leave. Or does it?
In Hansler v. Lehigh Valley Hospital Network, the plaintiff, Ms. Hansler, asked for a two-day per week, one-month leave of absence to deal with certain medical issues, a condition that was diagnosed after her separation as diabetes. In support of her request, Ms. Hansler submitted a medical certification that referred to the length of the requested leave, but did not describe the nature or … Read More »
The DOL Announces Proposed Revisions to FLSA Regulations Doubling the Minimum Salary Requirement for Exempt Employees
By Dennis M. Mulgrew, Jr.
More than 15 months after President Obama issued a Presidential Memorandum directing the Secretary of Labor “to propose revisions to modernize and streamline the existing [FLSA] overtime regulations,” the Department of Labor on June 30, 2015 finally issued a Notice of Proposed Rulemaking (NPRM) detailing its proposed revisions. These proposals include:
(1) Increasing the minimum salary requirement from $455 per week ($23,660 per year) to an expected $970 per week ($50,440 per year) in 2016;
(2) Increasing the minimum annual compensation requirement to qualify as a “highly-compensated” exempt worker from $100,000 to $122,148 annually;
(3) Creating a mechanism for automatically updating the minimum salary and compensation levels, by tying them to either (a) a fixed percentile of earnings for full-time salaried workers or (b) changes in the CPI-U (i.e., the Consumer Price Index for Urban Consumers).
Note that these are … Read More »
By DeMaris E. Trapp
On June 19, 2015, public comments were submitted for the EEOC’s much anticipated proposed rule to amend the Title I of the ADA to clarify how the statute applies to certain employee health wellness programs. The EEOC’s stated goal for the rule is to harmonize wellness programs’ use of incentives to encourage participation with the ADA’s requirement that disability-related inquiries and medical exams as part of a wellness program must be voluntary and not penalizing in nature.
The Issue: Incentivizing Wellness Programs
The ADA generally prohibits employers from making disability-related inquiries or requiring medical examinations, but provides an exception for voluntary medical examinations, including voluntary medical histories, which are part of a wellness program. The wellness program is voluntary so long as an employer neither requires participation nor penalizes employees who do not participate. Prior to the EEOC’s proposed … Read More »
By William R. Horwitz
Conventional wisdom holds that courts reflexively grant motions for conditional certification in Fair Labor Standards Act (“FLSA”) collective actions. As a result, some employers do not even oppose these motions. They are making a mistake. As two recent decisions demonstrate, an employer that opposes these motions has a chance to defeat them or, at least, narrow the scope of the collective.
Earlier this month, judges in the U.S. District Courts for the Southern and Eastern Districts of New York issued decisions on motions for conditional certification in Mata v. Foodbridge LLC, 2015 WL 3457293 (S.D.N.Y. June 1, 2015), and Anjum v. J.C. Penney Co., 2015 WL 3603973 (E.D.N.Y. June 5, 2015). The plaintiffs in both cases were non-exempt employees asserting claims for violations of the FLSA and New York Labor Law, alleging (among other things) that their … Read More »
By Dennis Mulgrew
This month the Department of Labor is expected to propose, for the first time since 2004, revised regulations concerning the executive, administrative, professional, outside sales, and computer exemptions under the Fair Labor Standards Act. These revisions were prompted by President Obama’s March 13, 2014 memorandum to the Secretary of Labor, which stated that the exemptions “have not kept up with our modern economy” and which “direct[ed] [the DOL] to propose revisions to modernize and streamline the existing overtime regulations.” After the memorandum was issued, the agency began writing proposed regulations and announced on May 5, 2015, that it had completed drafting them and had submitted them (as required by Executive Order 12866) to the Office of Management and Budget for review.
Procedurally, the “proposed rules” will be published in the Federal Register (an action known as a “Notice of … Read More »
New Guidance Regarding Employee Handbooks Part Five: Rules Restricting Employees From Leaving Work: What Are The Boundaries?
By Valerie Dutton Kahn
This post is the fifth in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules Here, Employee Conduct Rules, Rules Related to Company Logos, Copyright, and Trademark and Rules Restricting Photography and Recording. While the recent guidance was issued by the National Labor Relations Board (NLRB), (found here) this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.
Restrictions on Leaving Work: Language to Avoid
Although the NLRB acknowledges that employers have a legitimate interest in keeping employees from leaving their posts without warning, … Read More »
Partner Tom Barton and associate Dennis Mulgrew obtained a complete victory for the firm’s client, CDI, following four years of litigation that culminated in a two-week arbitration. In May 2010, Eileen Helfand, a senior client executive, filed suit in Essex County Superior Court against CDI and her supervisor claiming age and gender discrimination, retaliation and hostile work environment because she was disciplined and demoted for failing to diversify her business activities even though she was one of the company’s top revenue generating sales executives.
After the lawsuit was filed, CDI moved to compel arbitration and was successful in doing so after convincing the New Jersey appeals court to reverse the trial court’s refusal to compel arbitration. The parties arbitrated the case before Arbitrator Jon Sands in November, 2014. In all, more than 7,000 pages of testimony were taken that included numerous witnesses and … Read More »
By Noreen Cull and Alejandra Lara
In Mach Mining, LLC v. EEOC, decided April 29, 2015, the United States Supreme Court unanimously held that federal courts have the authority to review whether the EEOC satisfied its statutory obligation to engage in conciliation before filing suit against an employer.
Rejecting the EEOC’s position that its conciliation efforts are beyond judicial review, the Court stated that absent such review, “the Commission’s compliance with the law would rest in the Commission’s hands alone.” However, the Court held that the “scope of the judicial review is narrow.” The review examines whether the EEOC has properly informed the employer about the specific allegations of discrimination, including what practice has harmed which employees, and whether the EEOC tried “to engage the employer in some form of discussion (whether written or oral), so as to give the employer an … Read More »
By Jessica A. Burt
The Department of Labor’s revised definition of “spouse” under the FMLA was recently struck down in Texas. On March 26, 2015, in Texas v. United States, the United States District Court for the Northern District of Texas granted a request made by the states of Texas, Arkansas, Louisiana, and Nebraska for a preliminary injunction with respect to the Department of Labor’s Final Rule that revised the regulatory definition of “spouse” to include same-sex partners under the Federal Family and Medical Leave Act (“FMLA”).
After the Supreme Court struck down Section 3 of the Defense of Marriage Act (“DOMA”) in United States v. Windsor, which defined spouse under federal law, as a person of the opposite sex, President Obama called for a review of all relevant federal statutes to implement the decision. Under the then-existing FMLA regulation defining spouse, … Read More »
By DeMaris E. Trapp
On April 21, 2014, the U.S. District Court for the Eastern District of Michigan ruled that the EEOC may proceed with sex discrimination claims on behalf of a transgender plaintiff. This litigation is one of two actions filed by the EEOC in September 2014 alleging that employers violated Title VII by discriminating against transgender employees on the basis of sex.
While the EEOC acknowledges that transgender status is not explicitly protected under Title VII provisions, the Commission has taken the position since 2012 that discrimination against an individual because that person is transgender nevertheless constitutes sex discrimination under the theory of sex-stereotyping, i.e., taking an adverse action against an employee on the basis of that person’s nonconformance to sex- or gender-based preferences.
Federal Courts Permit Transgender Plaintiffs’ Claims under Sex Stereotyping Theory
The Commission’s two federal complaints, EEOC v. Lakeland … Read More »
New Guidance Regarding Employee Handbooks – Part Four: Permissible Rules Restricting Photography and Recording: A Snapshot
By Valerie Kahn
This post is the fourth in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules, found here and regarding Employee Conduct Rules, found here and regarding Rules Related to Company Logos, Copyright, and Trademark. While the recent guidance was issued by the National Labor Relations Board (NLRB) (view the full Memorandum here), this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.
When Do Restrictions on Photography and Recording Go Too Far?
When it comes to rules restricting an employee’s ability to take photographs or … Read More »
New Guidance Regarding Employee Handbooks Part Three: How Much Do Employers “Own” Their Logo, Copyright and Trademark?
By Meredith Murphy Ackerman
This post is the third in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules here and regarding Employee Conduct Rules here. While the recent guidance was issued by the National Labor Relations Board (NLRB) found here, this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.
“Use” Logos, Copyrights and Trademarks – Fair or Unfair?
The NLRB recognizes that employers have a right to protect their intellectual property, including logos, copyright and trademarks. However, that protection can only go so far. Specifically, … Read More »
By Mark E. Furlane, Philippe A. Lebel, and Dennis M. Mulgrew
On April 8, 2015, in Golden v. California Emergency Physicians Medical Group, the Ninth Circuit Court of Appeals broadly interpreted California’s statutory provisions regarding restrictive covenants in the context of reviewing a common clause included by employers in settlement agreements. Though the Court declined to decide the ultimate issue – the validity of “no reemployment” clauses – the Court’s broad reading of California’s restrictive covenant statute is alarming.
After he was let go from his employment with California Emergency Physicians Medical Group (“CEPMG”), Dr. Robert Golden (“Golden”) filed a lawsuit in state court alleging a number of statutory wrongful termination claims. After CEPMG removed the case, the parties reached an oral settlement agreement. Later on, CEPMG memorialized the oral agreement into a written settlement agreement, which contained a provision that precluded … Read More »
By Stephanie Dodge Gournis and Shavaun Adams Taylor
The NLRB’s “quickie election” rule goes into effect today. And while the National Labor Relations Board (NLRB) has avoided a clearly mandated time frame for processing union representation petitions, employers can expect elections to be held just 27-days (or less) after petition filing under the NLRB’s new representation election rule.
In speaking to interested stakeholders during an informational training session held on April 7th, Peter Sung Ohr (“Ohr”), Regional Director of the NLRB’s Region 13, described a timeline whereby union petitions will be processed and served electronically on employers the same or next day after filing. Pre-election hearings will be scheduled eight days later, but absent significant questions concerning representation or jurisdiction, issues of individual employee eligibility will not be litigated or resolved pre-election. Assuming consecutive-day hearings, elimination of rights to file post-hearing briefs, and a … Read More »
New Guidance Regarding Employee Handbooks Part Two: Employee Conduct Rules Can Prohibit Insubordination and Harassment But Cannot Prohibit Criticism and Debate
By Meredith Murphy Ackerman
This post is the second in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules, here. While the recent guidance was issued by the National Labor Relations Board (NLRB) found here, this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.
Employee Conduct Rules: What Is At Stake?
The NLRB acknowledges that employers have a right to prohibit employee insubordination. Equally important, employers have a right and an obligation to ensure that their workplace is free from harassment. However, these employer rights and … Read More »
By Stephanie Dodge Gournis and Shavaun Adams Taylor
In preparation for the NLRB’s new “quickie election” rules going into effect next week, the NLRB General Counsel yesterday published a 36-page Guidance Memorandum intended to explain how representation cases will be processed under the NLRB’s final rule. While the lengthy memorandum describes specific changes to Board procedures in great detail, it leaves unanswered significant questions such as how Regional Directors will process petitions on a “real world” basis, what opportunities employers are left with to challenge bargaining unit compositions, and ultimately, whether the NLRB’s “quickie elections” result in significantly shorter election time periods. Indeed, the GC acknowledges that the Board “will not be able to fully assess what impact the rule will have” until after it begins processing representation petitions. The GC instead directs the NLRB’s Regional Directors to “continue to process representation … Read More »
SEC Uses Its Powers under the Dodd-Frank Whistleblower Provisions to Warn Employers Against Attempting to Restrict Employees’ Ability to Report Potential Violations
By Mary Hansen and William Carr
On April 1, 2015, the SEC announced a settled enforcement proceeding against KBR, Inc., a publicly traded, Houston-based technology and engineering company, for including “restrictive language” in confidentiality agreements used in the course of internal investigations. This is the first time the SEC has used its enforcement powers under Rule 21F-17 of the Whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Rule 21F-17 provides that “[n]o person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement … with respect to such communication.”
The language to which the SEC took exception appeared in confidentiality agreements KBR used in connection with internal investigations. The statement, which investigators required employees to sign … Read More »
New Guidance Regarding Employee Handbooks — Part One: Don’t Let Your Confidentiality Provisions “Chill” Employee Communications
By Meredith Murphy Ackerman
It is a great time for employers to review their employee handbooks. Richard F. Griffin, Jr., General Counsel of the National Labor Relations Board (NLRB), recently issued a lengthy and detailed report summarizing the NLRB’s rulings on common handbook provisions. To view the complete Memorandum, click here.
The rulings in the report apply to both unionized and non-unionized employers because the National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.
This LaborSphere post is the first in a series that will provide guidance based on the NLRB’s report. Over the upcoming weeks, we will summarize what the NLRB has deemed acceptable and unacceptable language for … Read More »
By Maria L.H. Lewis
For employers, weighing an employee’s health issues with workplace concerns, such as employee safety and productivity, often requires a delicate balance. The challenge may be even greater when handling issues related to mental health. Questions abound on both sides: employees wonder if they should tell their employers about personal events that may be affecting their mental well-being, and employers struggle with difficult decisions concerning employment status when they have an ineffective worker.
The Americans with Disabilities Act (“ADA”) generally bars discrimination against an employee with a disability who is able to perform the essential functions of his or her job with or without a reasonable accommodation. The ADA defines “disability” as a “physical or mental impairment that substantially limits one or more major life activities.” The associated regulations define “mental impairment” as encompassing “any mental or psychological disorder, … Read More »
By Stephanie Dodge Gournis, Bruce Stickler, and Shavaun Taylor
Last week, the U.S. House of Representatives voted 232-186 in favor of passing a resolution to disapprove the National Labor Relations Board’s (“NLRB’s”) new “quickie election” rule, which becomes effective April 14 and is expected to give unions a decided “edge” in winning union representation elections. The House’s vote comes as no surprise and follows a similar March 4th vote by the Senate also disapproving the NLRB’s election rule. The White House has announced that President Obama will veto the joint Congressional resolution.
A Republican-led Congress came out strongly against the new rule when the NLRB finalized the election rule in December 2014. Dubbing it an “ambush election” rule, Congress quickly sought to disapprove the new election rule under the Congressional Review Act, with top Republicans on the Senate Labor Committee citing major … Read More »
By Mark Terman and Alexis Burgess
The Issue: Could my company be liable as a joint employer for California Labor Code violations of our subsidiary or third-party staffing company?
The Solution: Companies with subsidiaries and staffing companies in California should take steps to limit exposure.
Analysis: Parent corporations are generally presumed to be separate entities from their subsidiaries, and therefore not liable for the unlawful treatment of their subsidiary’s separate employees unless they exercise significant control over day-to-day operations. Recent developments, however, call this precedent into question.
In Castaneda v. Ensign, 229 Cal. App. 4th 1015 (2014) (review denied), the California Court of Appeal held: “an entity that controls the business enterprise may be an employer even if it did not ‘directly hire, fire, or supervise’ the employees.” (emphasis added). The parent company at issue claimed a lack of control over wages, hours and working conditions … Read More »
By Mark Terman
If only the Beatles’ call to “Let it Be” was heard by the California Legislature. Instead, employer regulation is on the rise again. In 2014, 574 bills introduced mentioned “employer,” compared to 186 in 2013. Most of those 500-plus bills did not pass, and several that did pass were not signed into law by the governor. One veto blocked a bill that would have penalized employers for limiting job prospects of, or discriminating against, job applicants who aren’t currently employed.
A sampling of significant new laws affecting private employers, effective Jan. 1, 2015, unless otherwise mentioned, follows.
Shared Liability for Employers Who Use Labor Contractors
AB 1897 mandates that companies provided with workers from a labor contractor to perform labor within its “usual course of business” at its premises or worksite will “share with the labor contractor all civil legal responsibility … Read More »
By Mark Terman and Pascal Benyamini
Operative July 3, 2015, companies located in San Francisco who are “Formula Retail Establishments” must comply with additional wage and hour requirements under the Retail Workers Bill of Rights (a combination of two ordinances, Ordinance 236-14 and Ordinance 241-14), the country’s first-ever such legislation.
Supporters claim that this new law is intended to improve life for retail employees which, according to some accounts, include more than 40,000 workers at 1,250 locations in the City of San Francisco. In passing the bill, the San Francisco Board of Supervisors found that Formula Retail Establishments are a major employment base and stated that the City has a strong interest in ensuring that jobs at these establishments allow employees to meet their basic needs and achieve economic security. An overview of this onerous and extensive legislation follows.
Formula Retail Establishments
The new law … Read More »
By Mark Terman
According to a November 17, 2014 article in LAobserved.com highlighted by the Los Angeles Business Journal, exempt non-union Los Angeles Times employees as of January 1, 2015 will no longer be able to accrue vacation days, sick days or floating holidays. Instead, a new Discretionary Time-Off policy will reportedly allow those employees time off, “subject to their professional judgment and to the performance expectations of their supervisor that apply to their job.” In theory, says the article, an employee can take more time off than under an accrual system, but Times’ employees are wary.
From some who caught this story, we have been asked if this kind of policy is legal. Well, in short, it can be.
Private employers generally do not have to provide paid vacation, sick or holidays under California Law. Those benefits are so customary that many think … Read More »
By Gerald Hartman, Mark Terman, Ryan Fife and Saba Shatara
On September 28, 2014, California Governor Jerry Brown announced the signing of Assembly Bill 1897, which amends California Labor Code section 2810 by creating a new Labor Code section 2810.3.
The new law targets businesses that obtain or are provided “workers to perform labor within its usual course of business from a labor contractor.” The statute’s definition of “labor contractor” excludes bona fide nonprofits, bona fide labor organizations, apprenticeship programs, hiring halls operated pursuant to a collective bargaining agreement, and motion picture payroll services companies.
Once AB 1897 becomes effective, private employers will be unable to deny liability for labor contractor’s failure to pay all required wages or to secure valid workers’ compensation coverage for contract workers. Employers using the labor services will now “share with the labor contractor all civil legal responsibility … Read More »
By: Helen E. Tuttle and DeMaris E. Trapp
On August 11, 2014, New Jersey Governor Chris Cristie signed into law “The Opportunity to Compete Act”, commonly referred to as New Jersey’s “ban-the-box” law, which prohibits employers from asking about the applicant’s criminal history prior to the completion of the first interview. New Jersey is the 6th state, in a growing trend, to pass some form of the “ban-the box” law which is intended to remove obstacles to employment for people with criminal records. New Jersey will join Hawaii, Illinois, Massachusetts, Minnesota, and Rhode Island, all of which have similar laws covering private employers.
New Jersey’s law will become effective on March 1, 2015 and covers both public and private employers operating in New Jersey who employ 15 or more employees. After the first interview, New Jersey employers are free to inquire into … Read More »
Whistleblower and Retaliation claims continue to rise and general counsel of companies large and small are increasingly budgeting for the prevention and defense of these claims. The multitude of regulations governing industries including pharma, life sciences healthcare, insurance and financial services, present employees with numerous opportunities, sometimes even incentives, to threaten and file whistleblower and retaliation claims. Launch the brief video below to hear how Labor and Employment Group partners Tom Barton and Lynne Anderson are helping employers achieve a culture of compliance to minimize risk, as well as the Labor & Employment group’s proven track record of success in helping employers handle and defend against these claims.
Join our friends on the California HR team on Wednesday, July 30, from 10:00 – 11:00 a.m. Pacific (1:00 p.m. Eastern), as they provide a complimentary one-hour webinar on current hot topics that may impact employers not just in California, but also nationwide, as they deal with Federal agency enforcement plans.
Kate S. Gold, Partner, Labor & Employment
Bruce L. Ashton, Partner, Employee Benefits & Executive Compensation
Philippe A. Lebel, Associate, Labor & Employment
Ryan C. Tzeng, Associate, Employee Benefits & Executive Compensation
Date: Wednesday, July 30, 2014
Time: 10:00 a.m. Pacific (1:00 p.m. Eastern)
Location: Webinar (Dial-in details and Outlook calendar link will be sent with registration confirmation)
Topics to be discussed during the one hour webinar will include:
The EEOC’s Strategic Enforcement Plan and its impact on employment separation agreements and releases
What the DOL and IRS are looking for when they audit your retirement plan… and what you should … Read More »
Wage & Hour class actions are being filed at a pace that dwarfs almost all other types of litigation. With a myriad of federal and state laws and regulation, employers not only need to take steps to minimize the risk of a suit, but also must be prepared to defend themselves. Launch the brief video below to hear how Labor and Employment Group partners Cheryl Orr and Stephanie Gournis are helping employers involved in employment class actions, as well as helping companies to minimize the risk of litigation.
Drinker Biddle proudly announces the release of the 2014 edition of Defending and Preventing Employment Litigation. Written and updated for 2014 by Labor & Employment Group partners Gerald S. Hartman and Gregory W. Homer, Defending and Preventing Employment Litigation is a must have reference for employment lawyers, in-house employment counsel, general counsels, and human resources professionals. The one-volume annually updated manual provides insight on preventing, preparing for, and managing employment litigation in discussing all types of discrimination, harassment, wage, leave and wrongful discharge claims.
The 2014 edition of Defending and Preventing Employment Litigation retails for $385. Drinker Biddle has arranged a special discount rate of 20% off the retail price for friends of the firm. To purchase your copy of Defending and Preventing Employment Litigation click here.
In a world where employee mobility is a business reality, companies should be taking proactive measures to guard trade secrets, retain competitive advantage and be ready for court if it comes to that. Click below to launch a video and hear from Labor & Employment partners Mark Terman and David Woolf on what they, and our other Labor & Employment group lawyers, are doing every day to protect companies.
By: DeMaris E. Trapp
The Pennsylvania Superior Court recently reaffirmed Pennsylvania’s longstanding position that employers must provide valuable consideration to employees who enter into noncompete agreements. In a case of first impression, the court held that a statement in a noncompete agreement with an existing employee that the parties “intend to be legally bound,” as set forth in the Uniform Written Obligations Act (“UWOA”), does not constitute adequate consideration.
In Socko v. Mid-Atlantic Systems of CPA, Inc., the employer argued that its noncompete agreement with a former employee was enforceable because the agreement expressly stated that the parties “intend to be legally bound.” The former employee entered into the agreement after he began working for Mid-Atlantic Systems of CPA, and he did not receive any benefit or change in job status in exchange for signing the noncompete. The employer argued that the … Read More »
Mark Terman, Labor & Employment partner in the Los Angeles office, was recently interviewed for a story on Bring Your Own Device (BYOD) policies for employers. As more and more employees use their own personal devices for work purposes BYOD policies are quickly becoming important for employers to have in place. The story was picked up by news outlets around the country, including in Miami, FL, Seattle, WA, Jacksonville, FL, Toledo, OH, Milwaukee, WI, Spokane, WA and Orlando, FL. To view the story that was carried by CBS 4 in Miami click here. To view posts from LaborSphere on BYOD considerations for employers click here.
Editor’s Note: The following post by Saba Shatara, Associate in the Los Angeles office, appears in the latest issue of the California HR Newsletter. To sign-up to receive the California HR Newsletter click here.
Passing AB 1897 Means Greater Liability for Employers Who Use Labor Contractors
The Issue: Today, many employers rely on labor contractors or temporary employment agencies to sustain their operations. Occasionally, however, labor contractors fail to comply with labor laws and regulations by failing to (1) pay wages; (2) report and/or pay all required contributions and personal income tax withholdings; and (3) secure workers compensation for subcontractors. In such cases, are employers liable to subcontractors for these types of violations of their labor contractors?
The Solution: Historically, for the most part, no. However, California Assembly Bill (“AB”) 1897, a proposed law currently before the Assembly, would impose joint liability on … Read More »
A National Labor Relations Board (NLRB) administrative law judge ruled recently that the “no-gossip” policy of Laurus Technical Institute, a for-profit technical school located in Georgia, broke federal law because it was overly broad, ambiguous and restricted employees from discussing or complaining about any terms and/or conditions of employment, even though nothing in Laurus’s policy directly addressed discussions about wages, hours or other employment terms and conditions.
Kate Gold, partner in the Los Angeles office, recently told Human Resource Executive Online during an interview on the topic of the Laurus decision and no-gossip policies for employers, “Though the NLRB has been focused on other policies that could violate an employee’s right to engage in protected concerted activity — such as social media or confidentiality policies — no-gossip policies can be especially problematic.”
Kate went on to say “I would not include it among … Read More »
By: Mark E. Terman and Dennis M. Mulgrew, Jr.
On April 8, 2014, at an event commemorating National Equal Pay Day (an annual public awareness event that aims to draw attention to the gender wage gap), President Obama signed two executive orders designed to limit workplace discrimination. The first prohibits federal contractors from retaliating against workers who discuss their salaries with one another, while the second instructs the Department of Labor to establish new regulations requiring federal contractors to submit summary data on compensation paid to their employees, including breaking down the data by gender and race.
The protections offered by the anti-retaliation Order overlap with many already existing under state and federal law. For example, the NLRA protects employees’ right to engage in “concerted activities” and thus already prohibits employer discipline against employees who discuss their wages. Further, some state laws, … Read More »
What Happens at Work Stays at Work – The California Employer’s Approach To A National Program for Restrictive Covenants and Trade Secret Protection
Kate Gold, Mark Terman and Adam Thurston, partners in the firm’s Los Angeles office, recently presented to the Southern California Chapter of the Association of Corporate Counsel a program titled “What Happens at Work Stays at Work – The California Employer’s Approach To A National Program for Restrictive Covenants and Trade Secret Protection”.
The presentation, which was broadcast to in-house counsel viewing in three separate locations spread out around southern California, first looked at the California landscape, giving a refresher and update on non-competition agreements, customer and employee non-solicitation, identifying and pleading trade secrets and misappropriation.
The presentation then looked at considerations for a multi-jurisdictional approach to trade secret protection, including best practices for effective corporate policies and confidentiality and property protection agreements.
The presentation concluded by addressing social media in a trade secret protection program, including Twitter, LinkedIn, and BYOD, and making … Read More »
By: Meredith R. Murphy
New Jersey’s Appellate Division has rejected two Atlantic City nightclub workers’ attempts to artfully plead their way around preemption under the National Labor Relations Act (NLRA) and the Labor Management Relations Act (LMRA) by alleging a whistleblower claim under New Jersey’s Conscientious Employee Protection Act (CEPA). The case was brought by two “Tipped Floor Euros,” i.e., alcoholic beverage servers, who alleged retaliation and constructive discharge following their complaints regarding tip-pooling, wage payments and being forced to perform duties prohibited by the collective bargaining agreement (CBA). The case is O’Donnell v. Nightlife, et al. (April 17, 2014).
In rejecting the plaintiffs’ CEPA claims, the Appellate Division took a narrow view of the whistleblower statute, citing the standard that the conduct complained of must “pose a threat of public harm, not merely private harm or harm only to the aggrieved employee.” … Read More »
By: DeMaris E. Trapp
On January 20, 2014, Philadelphia Mayor Michael Nutter signed into effect an amendment to the city’s Fair Practices Ordinance: Protections Against Unlawful Discrimination that expressly includes pregnancy, childbirth, or a related medical condition among those categories protected from unlawful discrimination.
The city law covers employers who do business in Philadelphia through employees or who employ one or more employees. Before this amendment, employers’ obligations under city, state, and federal antidiscrimination laws only required them to treat employees with pregnancy-related issues no worse than any other disabled employee with respect to accommodations. Now employers are not only prohibited from denying or interfering with an individual’s employment opportunities on the basis of pregnancy, childbirth, or related medical conditions, but employers also are required to make reasonable accommodations on these bases to an employee who requests it. The legislation’s non-exhaustive examples … Read More »
Editor’s Note: The following post by Alexis Burgess, Associate in the Los Angeles office, appears in the latest issue of the California HR Newsletter. To sign-up to receive the California HR Newsletter click here.
Supreme Court Expands Scope of Sarbanes-Oxley Whistleblower Protections
The Issue: My company is not publicly traded, but provides services to companies that are. Do Sarbanes-Oxley whistleblower protections extend to our employees?
The Solution: Yes.
Analysis: Enacted in the wake of the Enron and Worldcom scandals, the Sarbanes-Oxley Act imposes increased reporting standards on publicly-traded companies and the outside accountants, consultants, and lawyers supporting them. Section 1514A prohibits public companies, or their contractors or agents, from using adverse employment action, threat, or harassment to retaliate against “an employee” who blows the whistle (internally or externally) on perceived violations of the Act, SEC regulation, or any other federal law relating to shareholder fraud. Though civil remedies are … Read More »
Daughter’s Facebook Post Leads to Costly Breach by Father of a Confidentiality Clause in His Settlement Agreement With Former Employer
By: Lawrence J. Del Rossi
A recent decision by a Florida appeals court, Gulliver Schools, Inc. v. Snay, stands as a stark reminder of the perils of trying to maintain confidentiality in the age of social media where news can travel faster than the speed of sound and inadvertent dissemination of information that is intended to be “confidential” can be difficult, if not impossible, to prevent.
Patrick Snay sued his former employer, Gulliver Schools, for age discrimination and retaliation under the Florida Civil Rights Act after his contract as the school’s headmaster was not renewed. The parties reached a settlement in the amount of $150,000 ($10,000 in back pay, $80,000 for non-wage damages, and $60,000 in attorney’s fees), and agreed that the “existence or terms” of the agreement were to be kept strictly confidential. The confidentiality provision prohibited Snay from “directly or indirectly” disclosing … Read More »
Proposed California Paid Sick Leave Law Will Require Employers to Provide Paid Sick Leave to Employees
By: Pascal Benyamini
Are you a California employer currently providing paid sick leave to your employees? You may soon have to! California Assemblywoman Lorena Gonzalez (D-San Diego) recently introduced legislation (Bill AB1522) approved by the Assembly Labor and Employment Committee requiring employers in the State of California to provide their employees with paid sick leave.
This bill would enact the Healthy Workplaces, Healthy Families Act of 2014 to provide, among other things, that an employee who works in California for 7 or more days in a calendar year is entitled to paid sick days to be accrued at a rate of no less than one hour for every 30 hours worked. An employee would be entitled to use accrued sick days beginning on the 90th calendar day of employment. And employers would be subject to statutory penalties as well as lawsuits, including … Read More »
Just Don’t Ask: With The Fair Chance Ordinance, San Francisco Joins A Growing Number Of Jurisdictions That Restrict Employers’ Pre-Hire Inquiries About Applicants’ Criminal Histories
By Cheryl D. Orr and Philippe A. Lebel
In February 2014, San Francisco joined the growing number of jurisdictions that have enacted so-called “ban the box” laws. Like many of its counterparts, San Francisco’s Fair Chance Ordinance, which will become effective in August 2014, significantly limits employers’ abilities to inquire about and/or consider applicants’ and employees’ criminal records when making employment decisions.
Pursuant to the Ordinance, San Francisco employers are prohibited from asking about applicants’ criminal histories until either (a) after the applicants’ first live interview, or (b) after a conditional offer of employment has been extended. However, the Ordinance places considerable limits on obtaining and using any information obtained. Specifically, employers are prohibited from inquiring about or taking any adverse action against applicants or current employees based on: (a) any arrests not leading to a conviction, except for some unresolved (i.e., … Read More »
Cheryl Orr, partner and co-chair of the Labor & Employment group, and Sarah Millar, partner and vice chair of the Employee Benefits & Executive Compensation group, were both quoted in InsideCounsel’s April 2014 Labor & Employment Digest. The monthly digest “brings together the voices of labor & employment and employee benefits lawyers to get their take on the issues shaping the policies of workplace compliance and regulation.” Sarah’s quote looked at how employers can avoid the challenges presented by tobacco cessation programs and Cheryl’s looked at how the anti-drug policies of companies located in states where marijuana is now legal for medical or recreational use are affected. Both quotes are below in their entirety.
Avoid the challenges of tobacco cessation programs
“Tobacco cessation programs structured outside a health plan can be problematic. Some state laws prevent employers from making hiring and firing decisions … Read More »
By: Mark D. Nelson
On March 26, 2014, the National Labor Relations Board’s Regional Director (RD) in Chicago ruled that Northwestern University’s football players who receive scholarships are “employees” under the National Labor Relations Act and have the right to form a union. The potential implications of this ruling are significant. If the decision is not overturned by the National Labor Relations Board (NLRB) or a federal court, every private college and university in the country that has scholarship athletes could face the unionization of athletes in sports that generate significant revenue. Public universities could also be affected under state labor laws.
The RD found that the university, through the football program, exerts significant control over the football players. During the six-week training camp immediately before the season, athletes are given daily itineraries that dictate football-related activities for that day. During training camp, the … Read More »
By: Mark D. Nelson and Alejandra Lara
On Tuesday, March 25, 2014, the U.S. Supreme Court, in an 8-0 decision, ruled in Quality Stores, Inc., et al., 12-1408 that severance payments made to employees who are involuntarily terminated are taxable wages under the Federal Insurance Contributions Act (FICA). The Court reversed the Sixth Circuit Court of Appeals ruling in favor of Quality Stores, which was seeking a $1 million tax refund based on its argument that severance payments were not covered by FICA and were excluded from taxation based on the Internal Revenue Code. The Court’s ruling resolved a split between the Sixth Circuit and the Federal Circuit, and ended a legal battle with more than $1 billion at stake in potential tax refunds to employers involved in 11 separate cases with more than 2,400 refund claims.
Quality argued that its severance payments … Read More »
By: David J. Woolf
Perhaps your company has just acquired a new business and wants to put that entity’s employees under a more structured employment arrangement. Or maybe you are just looking to roll out new executive-level agreements within your own company. Whatever the motivation and circumstances, here are ten things to think about in drafting employment agreements that often go overlooked:
Severance – The most common question is the easiest: Are you going to provide severance and, if so, how much? Other details merit consideration though. For example, is death or disability a severance trigger? As part of the package, do you want to provide things like medical benefit continuation, prorated bonus, equity vesting acceleration, extension of the option exercise period, or other benefits? Whatever you do, the employer will want to make sure that the executive has to execute a release … Read More »
Hiring Employees Who May Be Bound by Post-Employment Restrictive Covenants? Caution, Restrictions May Apply
By: Daniel H. Aiken
Employers frequently want to hire talented employees who are bound by post-employment restrictive covenants (e.g., non-competes, or customer/employee non-solicitation covenants). Often, a plain reading of the prospective hire’s agreement raises questions about whether joining your company would violate the agreement. This requires strategic, and sometimes creative, planning. Depending on your jurisdiction, deciding to hire an employee despite their post-employment restrictive covenants may involve taking a calculated risk that some parts of the post-employment restrictions are not enforceable, while deciding that there are some aspects your company can live with and that you expect the new employee to follow. The following provides some basic guidance.
1. Assess the business impact of the restrictions by determining the precise scope and duties of the prospective job. Even though the individual may be subject to post-employment restrictive covenants, the job for which … Read More »
By: Jessica A. Burt
States and municipalities across the country are considering, and adopting, legislation requiring employers to provide paid sick leave. This legislation, generally aimed at assisting workers with low wages who may lack access to paid sick time, has been passed or is currently pending in at least 18 states, including: Alaska, Arizona, California, Florida, Hawaii, Illinois, Iowa, Maryland, Michigan, Minnesota, Nebraska, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina and Washington.
Newark, New Jersey recently followed the trend, and passed its own Paid Sick Leave Ordinance. Beginning May 29, 2014, all private employers must provide paid sick time to employees who work in the City of Newark for at least 80 hours in a calendar year. The law is the second in the state of New Jersey, coming just months after Jersey City passed a similar … Read More »
Taylor v. Nabors Drilling and California’s SB 292 Clarify that Sexual Harassment Need Not Be Motivated by Sexual Desire
By: Saba Shatara
On January 13, 2014, the California Court of Appeal decided in Taylor v. Nabors Drilling USA, L.P., 222 Cal. App. 4th 1228 (2014), that a person may maintain an action for sexual harassment when subjected to verbal attacks on his or her heterosexual identity, regardless of whether the attacks were motivated by sexual desire. This ruling came soon after the implementation of SB 292, which became effective in California on January 1, 2014. This bill revised the definition of sexual harassment under California Fair Employment and Housing Act (“FEHA”) to specify that sexually harassing conduct “need not be motivated by sexual desire.” As a result, to prove harassment “because of sex,” plaintiffs need only show that there was evidence that gender was a substantial factor in the harassment.
Both Taylor and SB 292 explicitly reject the view adopted … Read More »
Editor’s Note: The following post by Katrina Veldkamp, Associate in the Los Angeles office, appears in the latest issue of the California HR Newsletter. To sign-up to receive the California HR Newsletter click here.
The Impact of 409A on Severance Payments
The Issue: An employment agreement conditions severance payments to an executive on her signing a release. Can this create a tax problem for the executive under the non-qualified deferred compensation rules of the Internal Revenue Code?
The Solution: Yes, unless the provisions of the employment agreement are properly drafted and the parties comply with the terms of the agreement.
Analysis: Code Section 409A (409A) governs the terms and operation of “non-qualified deferred compensation plans” and imposes restrictions on the reasons for and timing of deferred payments. Neither the employee nor the employer may accelerate or defer the receipt of deferred compensation (with some exceptions not applicable here).
Failure … Read More »
Editor’s Note: The following post by Kate Gold, Partner in the Los Angeles office, appears in the latest issue of the California HR Newsletter. To sign-up to receive the California HR Newsletter click here.
Forum Selection Clauses and Non-Compete Agreements
The Issue: You are a California employer with out-of-state headquarters, and your executive works and lives in California. Your employment agreement has a one-year post-termination non-compete. Can you enforce it?
The Solution: In general, no, but the answer may depend on whether you have a valid forum selection and choice of law clause that provides for resolution in a state that permits reasonable post-termination non-competes.
Analysis: In general, California employers cannot enforce post-termination non-competes and a party cannot circumvent California restrictions on non-competition with a choice of law provision designating a more non-compete friendly jurisdiction. However, the Supreme Court’s recent decision in Atlantic Marine Construction Co.,
Inc. v. U.S. … Read More »
By: William R. Horwitz
As cleanup from the Nor’easter that pummeled the East Coast last week continues, and the prospect of more snow looms, we hope that you and your families, as well as your businesses and employees, are safe and warm and that the lights are on. As this has been one of the more problematic winters in recent memory, we wanted to remind employers of some of their obligations before, during and after a storm.
Unless your agreements or policies provide otherwise, you are generally not required to pay non-exempt employees when they are not working. Therefore, if your business is closed and your employees do not report to work, you are not obligated to pay non-exempt employees. However, make sure that these employees are not checking work e-mails, communicating with supervisors about work-related issues or otherwise working from … Read More »
Drinker Biddle partnered with The CFO Alliance to collect survey responses from a broad sample of more than 500 senior financial executives across the United States in order to provide insights into the strategic planning and financial outlook of these executives.
Please join Labor & Employment Group co-chairs Cheryl Orr and Tom Barton, along with several of their partners from across the firm, for a one-hour webinar presentation on the results of The CFO Sentiment Study followed by a live Q&A. Participation and feedback is appreciated, as we will be creating a series of live and online events, discussions, and other materials centered on the top issues and opportunities for business leaders.
Date: Thursday, February 20, 2014
Time: 1:30 p.m. Eastern
• Human Capital
• Economic & Political Outlook
• Financing & Budgeting
• Government Regulation
On Monday, February 24, 2014, the Drinker Biddle Employee Benefits & Executive Compensation Team will present a free one hour webinar on hot topics that church plan sponsors should be considering for 2014. The webinar will be led by Chicago partners David L. Wolfe and Mark E. Furlane. Some of the topics to be covered during the webinar include:
An update on church plan litigation, including the recent ruling against Dignity Health and what this means for your church plan;
How church plan sponsors can best position themselves to defend against such an attack;
What church plan sponsors need to know about maintaining their church plan status in 2014;
Pros and cons for various employee benefit plans.
To register click the RSVP button:
Date: Monday, February 24, 2014
Time: 1:30 – 2:30 pm central
David L. Wolfe
David is a partner and member of the Employee Benefits & Executive Compensation Practice Group. He represents clients … Read More »
Accounting Firm Partner Cannot be a Whistleblower Under New Jersey’s Conscientious Employee Protection Act
Editor’s Note – The below appeared in Legal Briefs, Drinker Biddle’s periodic summary of judicial decisions affecting accounting and financial services professionals. To view the entire issue click here.
Accounting Firm Partner Cannot be a Whistleblower Under New Jersey’s Conscientious Employee Protection Act
The district court for the District of New Jersey recently ruled that an accounting firm partner may not claim he was a whistleblower who was improperly fired by his firm. In Largie v. TCBA Watson Rice, Civil Action No. 10-cv-0553 (D.N.J. Aug. 20, 2013), the court considered the plaintiff Largie’s claim that he had been wrongfully terminated in retaliation for his attempted disclosures about alleged fraudulent practices at his accounting firm. The firm contended that it had fired Largie for his chronic absences and for attributing fees from the firm’s clients to another accounting firm. Largie was the director of the firm’s taxation … Read More »
New Jersey Expands Protections Against Pregnancy-Based Discrimination By Employers And Other Entities
Update 1/23/14 – On Wednesday, January 22, 2014, Governor Christie signed S2995 into law. LaborSphere’s original post on the legislation appears below.
By: Meredith R. Murphy
New Jersey is on the precipice of expanding anti-discrimination protections to both pregnant women and new mothers and those recovering from childbirth. The State Senate and now the State Assembly have passed identical measures with only one dissenting vote in either legislative body. The expansive legislation now awaits the signature of Governor Chris Christie in order to become law.
Amendments to New Jersey Law Against Discrimination
In order to address the perceived vulnerability of pregnant women in the workplace as well as to foster the goal of healthier pregnancies and recovery from childbirth, the legislation passed by New Jersey’s legislature expands the anti-discrimination and anti-retaliation protections of New Jersey’s Law Against Discrimination (“NJLAD”). Should it pass, both pregnant women … Read More »
Editor’s Note: The following post by Heather Abrigo, Counsel in the Los Angeles office, appears in the latest issue of the California HR Newsletter. To sign-up to receive the California HR Newsletter click here.
Special Rules Apply To Documents With Employee Protected Health Information
By: Heather B. Abrigo
The Issue: Must an employer safeguard documents containing employee protected health information (PHI) in any special way?
The Solution: Yes. An employer must adopt privacy policies or procedures related to employee PHI. These policies should include controls over who has access to the documents (physically and electronically).
Analysis: Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), employers must prevent the unauthorized disclosure of protected health information (PHI). This will primarily affect those employers that sponsor self-insured health plans, cafeteria plans with a flexible health spending account component, offer on-site health clinics, and/or that offer significant … Read More »
By: Meredith R. Murphy
This past November the voters of New Jersey approved a ballot question both raising the state minimum wage and amending the State Constitution to tie future increases to inflation. Here is what employers need to know:
1. Effective January 1 the state minimum wage for almost all employees has increased from $7.25 per hour to $8.25.
2. Going forward, the state minimum wage will be increased every January 1 in accordance with an increase in the federal government’s consumer price index for all urban wage earners and clerical workers (commonly referred to as the CPI-W) as of the preceding September 30.
Employers should also be aware that if at any time the federal minimum wage should surpass that which is provided by the State Constitution’s formula, the state minimum wage will be automatically increased to match … Read More »
Editor’s Note: The following post by Los Angeles Partner Pascal Benyamini appears in the latest issue of the California HR Newsletter. To sign-up to receive the California HR Newsletter click here.
Risk Management: What to Include In A Personnel File
By: Pascal Benyamini
The Issue: Can employers reduce risks of potential claims of discrimination and retaliation by employees through thoughtful management of personnel files?
The Solution: Yes. One of the many steps that employers can take to reduce risk of litigation is to ensure that documents that do not belong in a personnel file are kept in separate files and locked up.
Analysis: Discrimination claims come in many forms, including, race, gender, sex, sexual orientation, national origin, religion, mental or physical disability, or pregnancy. One of the most effective ways to reduce legitimate employment discrimination cases is for employers to expend the necessary resources to properly train their workforce, starting … Read More »
By: Marion B. Cooper
Governor Chris Christie signed Assembly Bill 2647 (the “Gender Equity Notice and Posting Law,” N.J.S.A. 34:11-56.12) into law, effective November 21, 2012 requiring New Jersey employers with 50 or more employees to conspicuously post a notice, where it would be accessible to all workers in each of the employer’s workplaces, informing employees of their “right to be free of gender inequity or bias in pay, compensation, benefits, or other terms or conditions of employment” under the New Jersey Law Against Discrimination, other New Jersey State law, Title VII of the Civil Rights Act of 1964 and the federal Equal Pay Act of 1963. (http://www.njleg.state.nj.us/2012/Bills/PL12/57_.PDF)
Under the Gender Equity Notice and Posting Law, employers have 30 days from December 9, 2013, the date the New Jersey Division of Labor and Workforce Development (“NJDLWD”) issued the “notice” to comply. The … Read More »
A new year means new legislation and regulations for employers with operations in California. Prepared by Kate Gold, partner in the Los Angeles office, and Alexis Burgess, associate in the Los Angeles office, this four-part series will take a look at some of the new laws and regulation affecting private employers doing business in California. Today’s final post in this series takes a look at the other changes for 2014 that California employers should be aware of and were not already covered in the first three posts (Wage and Hour Laws and Penalties, Discrimination and Retaliation and Immigrant Protections & Leaves, Accommodations, and Benefits) of this series.
Criminal conviction history. Existing law prohibits all employers from asking job applicants to disclose, orally or in writing, any information related to an arrest or detention that did not result in a conviction. Effective July 1, … Read More »
California Employers: What You Need to Know for 2014 – Immigrant Protections & Leaves, Accommodations, and Benefits
A new year means new legislation and regulations for employers with operations in California. Prepared by Kate Gold, partner in the Los Angeles office, and Alexis Burgess, associate in the Los Angeles office, this four-part series will take a look at some of the new laws and regulation affecting private employers doing business in California. Today we look at new laws and regulations in California dealing with immigrant protections & leaves, accommodations and benefits.
Retaliation. AB 263 prohibits an employer from using immigration law to retaliate against employees who assert protected rights under the Labor Code. Employers who do so, e.g., by contacting or threatening to contact immigration authorities about the immigration status of a current, former, or prospective employee or their family members, will face various penalties, including suspension of certain business licenses, and may face civil action from … Read More »
A new year means new legislation and regulations for employers with operations in California. Prepared by Kate Gold, partner in the Los Angeles office, and Alexis Burgess, associate in the Los Angeles office, this-four part series will take a look at some of the new laws and regulation affecting private employers doing business in California. Today we look at new laws and regulations in California dealing with discrimination and retaliation.
Discrimination and Retaliation
Retaliation. AB 263 expands employer liability for violating Labor Code 98.6, which currently protects employees from discharge or discrimination when they have asserted their rights under the Labor Code. As amended, the law will:
Prohibit any retaliation or adverse action against employees who have asserted any right under the Labor Code or who have updated or attempted to update their “personal information” in a manner unrelated to their skill set, qualifications, or … Read More »
A new year means new legislation and regulations for employers with operations in California. Prepared by Kate Gold, partner in the Los Angeles office, and Alexis Burgess, associate in the Los Angeles office, this four-part series will take a look at some of the new laws and regulation affecting private employers doing business in California.
Wage and Hour Laws and Penalties
Minimum wage increase. AB 10 raises the state-wide minimum wage from the current $8 per hour to $9 per hour, effective July 1, 2014, and then to $10 per hour, effective January 1, 2016. Employers should note that employees currently classified as exempt must still meet the salary basis test to qualify for the particular exemption claimed.
Minimum wage penalties. Under Labor Code section 1194.2, employees who have not been paid minimum wages may recover liquidated damages through civil actions or administrative wage hearings before the … Read More »
By: Jessica A. Burt
The United States District Court for the Western District of Virginia determined last month in Martin v. Yokohama Tire Corp. that an employee provided sufficient notice of both his disability and his need for an accommodation under the ADA despite his failure to follow the company’s policy for requesting an accommodation.
Harvey Martin, Jr. was diagnosed with diabetes in 2008. He alleged that his former employer refused to allow him time off to attend medical appointments when he was seriously ill. Despite the fact that Martin requested medical leave on several occasions, he failed to complete the accommodation form as required by the company’s handbook. On this basis, Yokohama argued that Martin’s failure to request an accommodation form from Human Resources, as required in the handbook was tantamount to no request at all. Yokohama further argued that … Read More »
Court Rules In First of Five Church Plan Retirement Plan Cases Rejecting Dignity Health Retirement Plan Church Plan Status
By: Mark E. Furlane and David R. Levin
Last spring five complaints were filed against hospital systems challenging the church plan status of one or more of their plans. The Hospital systems were Dignity Health, San Francisco; Ascension Health Alliance, St. Louis; Catholic Health Initiatives, Englewood, Colo., Catholic Health East, Newtown Square, Pa.; and Saint Peter’s Healthcare System, New Brunswick, N.J. They all operated their pension plans under church plan status. Motions to dismiss were filed and fully briefed in four of those cases and oral argument was heard in two of them.
On December 12, 2013, the district court for the Northern District of California ruled in one of them, Rollins v. Dignity Health, agreeing with Plaintiff that the Dignity Health retirement plan was not a church plan. The suit claimed Dignity Health is “not a church or a convention or … Read More »
Employment Law Seminar
The Chicago FBA invites you to attend its Employment Law Seminar on Thursday, January 23, 2014. This program will feature eight judges from the federal and Illinois judiciary, including the Seventh Circuit Court of Appeals, the Northern District of
Illinois and the Circuit Court of Cook County, as well as representatives from the Equal Employment Opportunity Commission, University of Chicago Law School and private practitioners.
Do not miss this opportunity to hear firsthand from these experts about the ever-changing landscape of federal and state laws and regulations. Panel discussions will cover recent developments in employment discrimination law, procedural developments in individual and class litigation, settlement and mediation, and EEOC investigations and litigation, among other topics of utmost
importance to employment law attorneys, employers and employees.
To view the agenda and pricing information, click here.
Thursday, January 23, 2014
1 to 5 p.m.
Cocktails … Read More »
Editor’s Note: The following post by Los Angeles Of Counsel Joe Faucher appears in the latest issue of the California HR Newsletter.To view the entire newsletter click here. To sign-up to receive the California HR Newsletter click here.
The Scoop on Revenue Sharing
By: Joseph C. Faucher
The Issue: What do plan fiduciaries need to know about revenue sharing?
The Solution: Fiduciaries need to understand that revenue sharing is a common practice in the investment industry. They must be aware if revenue sharing payments are being made and the amount of those payments, determine how those payments are used, and evaluate whether the overall compensation of the party that receives them is reasonable.
Analysis: “Revenue sharing” occurs when an investment company, like a mutual fund company, issues compensation to another service provider – a recordkeeper or a third party administrator. The payments are typically made in … Read More »
Editor’s Note: The following post by San Francisco Partner Cheryl Orr appears in the latest issue of the California HR Newsletter. To view the entire newsletter click here. To sign-up to receive the California HR Newsletter click here.
Practical Tips for “Bring Your Own Devices” (BYOD) Policies and Practices
By: Cheryl D. Orr
The Issue: What do employers need to do to minimize risks (privacy, security, safety and wage and hour) caused by use of personal smart phones and tablets in the workplace?
The Solution: Employers can minimize their risks by:
Drafting clear and consistent policies that cover all technologies and servers used;
Having employees sign requests granting them access to the company’s systems and acknowledging when they can be wiped;
Confirming in writing that all information accessed through the company’s systems is confidential and company property and can be wiped if lost or stolen;
Ensuring compliance with the company’s codes of legal and ethical business conduct; and
Addressing when … Read More »
Please join us for the Inside the Beltway Audiocast on Thursday, December 5, 2013.
On Thursday, December 5 at noon eastern our colleagues Fred Reish, partner in the firm’s Los Angeles office, and Bradford Campbell, Counsel in the firm’s Washington, DC office, will give a free audiocast discussing developments in Washington that directly impact the retirement income industry. Topics to be discussed during the audiocast include:
End of the year review of what happened, and what it means
Budget negotiations and impact on plans
DOL proposal for 408(b)(2) guide
DOL Target date fund disclosure final regulation
Update on the fiduciary advice proposal
Update on projections of retirement income
The latest developments in retirement plan litigation
Other recent developments
Date: Thursday, December 5, 2013
Time: Noon to 1:00 PM (ET)
How: Click the above “RSVP Online” button to register for Inside the Beltway
Lynne Anderson, partner in the firm’s Florham Park office, was quoted in a story that appeared in the Miami Herald regarding the recent incidents of bullying on the Miami Dolphins football team and the potential for the victim of the bullying, Jonathan Martin, to bring legal action against the team and its coaching staff.
Lynne addressed the possiblity of Martin bringing a suit against the team based on Martin belonging to a protected class. “If Martin can prove he was harassed because of his race – and Incognito’s vile voice messages might be the proof he needs…” But, being a member of a protected class is only the first step for bringing a claim against the team as Lynne added, “he also has to show that it [the bullying] was unwelcome behavior”.
Lynne also addressed the chance that even if the team was not aware of the bullying that … Read More »
Cheryl Orr, partner in the San Francisco office, will be speaking on two panels at Drinker Biddle’s upcoming 2013 ERISA Insurance Symposium. This complimentary symposium, which will be held in the firm’s Chicago office on November 12 & 13, 2013, is intended for in-house counsel and those with ERISA compliance responsibility. It will feature panel discussions and breakout groups with a practical focus on developments and challenges for the recordkeeping divisions and affiliated broker-dealers of insurance companies operating in the qualified retirement plan market. Topics to be discussed include:
Regulatory developments at the DOL and IRS
Retirement income guarantees
ERISA litigation and DOL investigations of service providers
Cheryl’s first panel, Technology Issues for Insurance Companies, will discuss data security issues, cyber risks, FINRA privacy concerns and the impact of the ADA on websites. Her second panel, Odds and Ends: Breakout Discussion of Issues and Problems, will … Read More »
San Francisco Partner Cheryl Orr was quoted in a recent story in the Chicago Tribune on Illinois medical marijuana law and the legal implications for Illinois employers whose policies are at odds with the law. Some of the issues Illinois employers will need to confront include reconciling their drug-free work place policies with patients’ rights, what they can ask job applicants, how to deal with an impaired employee and whether or not an employer can punish an employee for engaging in what is now deemed to be a legal activity.
Cheryl submitted that the Illinois statute may offer civil employment protections for workers. One provision of the Illinois law appears to narrowly tie the ability to discipline a medical marijuana patient for failing a drug test to those employers who are specifically connected to federal work or funding. This framework, Cheryl wrote, “creates a plausible argument … Read More »
By: Mark D. Nelson
As hospitals continue to see an onslaught of flu patients, they also face challenges to flu vaccination policies designed to reduce the spread of flu to patients and fellow employees. Hospitals are understandably concerned with protecting patients, visitors and employees from contracting the flu and the potentially serious consequences to the health of elderly and infant patients. However, protecting patients against flu can create legal liability when employees are disciplined, discharged or suffer other adverse action because they do not get a flu shot.
Employment Considerations for Flu Vaccination Policies—The National Labor Relations Act
What limitations exist on a hospital’s ability to create and implement a flu/other vaccination policy? Under the National Labor Relations Act, a flu vaccination policy is a mandatory subject of bargaining. This means that unionized hospitals cannot unilaterally implement such a policy without first giving … Read More »
By: Meredith R. Murphy
As another flu season approaches and the lines are forming for annual flu shots, many employers are questioning the legality of requiring their employees to receive a flu vaccine shot when they recognize business and safety needs for ensuring their work environments and workforce are better protected from the flu virus. This need is especially acute for non-hospital employers who care for individuals with compromised immune systems, such as rehabilitation centers or schools. While a different set of considerations come into play when a hospital is assessing how to implement a flu vaccine policy (see our post on this topic by Mark Nelson here), non-hospital employers have business needs and health concerns that may make implementation of a flu vaccine policy desirable or necessary.
So, what should an employer consider before implementing such a policy?
DO evaluate the business need … Read More »
Editor’s Note: The following post by Los Angeles Partner Mark Terman appeared in the latest issue of the California HR Newsletter. To view the entire newsletter click here. To sign-up to receive the California HR Newsletter see the instructions below.
Unpaid Internships – Opportunity or Liability?
By: Mark E. Terman
The Issue: How can employers reduce risks of the sharp increase of class action litigation by unpaid interns and adverse publicity for companies and key executives over failure to pay wages?
The Solution: Employers should evaluate and correct their unpaid internship practices or, alternatively, treat interns as minimum-wage employees who, if properly classified as part-time or a short-term temporary employee, may not be eligible for certain employee benefits.
Analysis: Unpaid internships have long been used by students and newcomers to build a resume, launch a career or simply land a paying job. Employers can capitalize on this to … Read More »
Editor’s Note: The following post by Los Angeles Counsel Summer Conley appeared in the latest issue of the California HR Newsletter. To view the entire newsletter click here. To sign-up to receive the California HR Newsletter see the instructions below.
May Certain Employee Classes be Excluded?
By: Summer Conley
The Issue: May employers exclude certain classes of employees (e.g., interns, part-time employees, temporary employees) from
participation in a qualified retirement plan?
The Solution: Yes, subject to certain caveats. Employers should consider how they define excluded employees, as well as
coverage and nondiscrimination requirements.
Analysis: While employers may generally exclude a specified class of employee from participation, it is important to clearly
understand how the class is defined and beware of nondiscrimination rules. For example, “interns” and “independent contractors” may actually be employees, but it may still be possible to exclude them. In the latter category, plans often exclude temporary employees. If … Read More »
By: Meredith R. Murphy
Following the lead of its neighbor across the Hudson River [see our earlier coverage of New York’s paid sick leave law here], New Jersey’s second most populated city, Jersey City, has passed an ordinance to require employers with ten or more employees to offer as many as five paid sick days a year. The bill is sweeping in its application, impacting all businesses employing workers who work at least 80 hours a calendar year in Jersey City. However, employee headcount is critical to determining employers’ obligations under the law:
10 Or More Employees In Jersey City: 5 Paid Sick Days
Fewer Than 10 Employees In Jersey City: 5 Unpaid Sick Days
Counting Employees: Full-time, part-time and temporary workers all count toward the total number of employees for purposes of this new law. Further, if an employer’s workforce … Read More »
Members of Drinker Biddle’s newly formed “California HR” team, a cross-practice group featuring lawyers from our Employee Benefits & Executive Compensation and Labor & Employment practices, presented a webinar on the impact of the U.S. Supreme Court’s Defense of Marriage Act ruling and what it means for employers, especially in connection wtih Proposition 8.
The webinar focused specifically on the concerns of human resources professionals and in-house counsel of companies headquartered or doing business in California, including how DOMA will impact their policies and how it will affect benefit plans and retirement plans.
Other areas of discussion include:
Possible changes California employers need to make to welfare benefit and retirement plans.
How beneficiaries are now determined.
What documentation employers can require in confirming a domestic partnership or same sex marriage?
The intersection between DOMA and FMLA.
Marital status discrimination issues and other issues of concern to California … Read More »
The uncertainty of the implications of the Affordable Care Act (health care reform), the current debate over the debt ceiling, federal sequestration and the ever-changing regulatory and legislative environment continue to serve as key sources of confusion and concern for businesses and organizations across the U.S.
On Wednesday, October 9, 2013, from 10 – 11 am eastern, join members of Drinker Biddle’s Lobbying & Advocacy Team and Employee Benefits & Executive Compensation Practice Group for a complimentary webinar that will review the current state of federal fiscal and health policy and outline what you and your company or organization need to know about what’s ahead. The webinar also will provide the tools you need to successfully navigate these unpredictable business, economic and political climates.
Heather B. Abrigo, Counsel, Drinker Biddle
Jodie Curtis, Senior Government Relations Director, Drinker Biddle
Nick Araco, Director of Growth Strategies, Drinker … Read More »
Understanding and Preparing for the Changes Coming in 2014
The Patient Protection and Affordable Care Act (ACA) represents the most dramatic change in U.S. health care policy since the introduction of Medicare in 1965. The ACA contains many requirements that can significantly impact your company’s bottom line.
Join Drinker Biddle and The CEO Trust for a panel discussion on some of the key provisions of the ACA and what your business can and should be doing to address them. Topics will cover:
Required changes in employee health plan options
Formulating an insurance strategy tailored to meet the needs of your business
The latest from Capitol Hill and last minute efforts to meet the January 2014 insurance exchange deadline
Date: Tuesday, October 15, 2013
Time: 8 – 8:30 a.m.
Location: Drinker Biddle & Reath
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996
Chuck Steege, President, SFG Wealth Planning Services, Inc.
Matt Amodeo, Partner, Drinker Biddle
Julie Allen, Government … Read More »
By: Laurie A. Holmes and Aaron M. Moyer
Familiar with this? It’s time to update your affirmative action plans. For the women and minorities plan, you gather your applicant data, prepare spreadsheets and update your written materials to reflect new goals and changes in your recruiting sources. For the veterans and individuals with disabilities plan, you update a bit and you’re done. Starting early next year, however, the rules will change making updates more onerous for employers. On August 27, 2013, the Office of Federal Contract Compliance Programs announced final rules for federal contractors regarding hiring and employment of disabled individuals and protected veterans and imposing new data retention and affirmative action obligations on contractors. The rules are expected to be published in the Federal Register shortly and will become effective 180 days later.
The key changes include:
Benchmarks. Contractors must establish benchmarks, using … Read More »
By: Mark D. Nelson
Effective January 1, 2015, almost 2 million home health and personal care workers will be entitled to be paid at least the federal minimum wage and receive overtime pay, under a final rule announced by the U.S. Department of Labor on September 17. According to new Secretary of Labor Thomas Perez, the final rule will give home care workers “parity” with direct care workers who work at institutional settings and will “ensure that direct care workers are available to elderly people who want to remain in their homes.”
The new rule will apply to all home care workers, including live-in workers, who are employed by a third party such as a home health agency. The rule will also require the family of an elderly or ill person when the worker performs medical duties or primarily performs domestic duties … Read More »
New Jersey Legislative Update: Pay Equity Protection, Social Media and Employer Responses to Unemployment Insurance Requests for Information
By: Marion B. Cooper
August was a busy month for New Jersey lawmakers with Governor Christie signing two bills, one regarding pay equity and one concerning personal social media accounts that he had conditionally vetoed earlier, and a bill regarding the impact of an employer’s failure to respond to a request for information for purposes of unemployment insurance benefits. As described below, each bill will impact an employer’s compliance obligations and should be appropriately integrated into management practices.
Assembly Bill No. 2648 (A-2648), signed by the Governor on August 29, 2013, is a pay equity protection measure amending the New Jersey Law Against Discrimination (NJLAD) to bar employers from retaliating against employees who share information about the job title, occupational category or rate of compensation and other employment matters, or the gender, race or other protected characteristic of current or former co-workers … Read More »
Los Angeles Partner Kate Gold and associate Elena Min recently authored for The Daily Journal an article on changes to Section 218.5 of California’s Labor Code. The change, enacted through Senate Bill 462, curbs an employer’s ability to recover prevailing party attorney fees and costs in a lawsuit seeking unpaid wages, fringe benefits, or health and welfare or pension fund contributions.
Scheduled to go into effect January 1, 2014, the amendment limits recovery of attorney fees and costs by a prevailing employer “only if the court finds that the employee brought the court action in bad faith.”
Kate and Elena said the amendment “strips employers of one possible weapon in their arsenal for deterring nonmeritorious wage and hour claims.”
“Attorneys for plaintiffs and defendants will likely disagree with the consequences of the amendment as well as its premise – that the two-way fee … Read More »
New Jersey Federal Court Finds that the Stored Communications Act Protects Employee’s Non-Public Facebook Wall Posts – But Also Provides Guidance on Whether An Employer Can Take Action Based on The Unsolicited Receipt of An Offensive Post
By: Lynne Anne Anderson
Facebook continues to be the new “water-cooler” as co-workers regularly “friend” each other and allow access to their “wall” posts. New Jersey’s Federal District Court recently addressed the issue of whether a Hospital’s decision to suspend a nurse based on a post on her Facebook wall – which it received unsolicited from a co-worker who was a Facebook friend of the nurse – violated the Federal Stored Communications Act (“SCA”), 18 U.S.C. § 2701-11. The Court also addressed the nurse’s related invasion of privacy claim. Ehling v. Monmouth-Ocean Hospital Service Corp., 2013 U.S. Dist. LEXIS 117689 (8/20/13). [Opinion]
The nurse was a Hospital employee who maintained a personal Facebook account. She chose privacy settings that limited access to her “wall” to her Facebook ‘friends,” including one of her co-workers. Following the 2009 shooting at the Holocaust museum, the nurse … Read More »
Audiocast – Impact of DOMA and Proposition 8 on California Employers – September 9, 2013 at Noon Pacific
The recent Defense of Marriage Act “DOMA” ruling has caused some concerns for human resources professionals and in-house counsel of companies headquartered or doing business in California. Those concerns include: (i) how will DOMA impact their policies, (ii) how will it affect benefit plans and retirement plans, and (iii) what does the ruling mean for employers, in connection to Proposition 8?
Please join four of our California-based Drinker Biddle lawyers from our new cross-over group, “California HR,” as they present a one hour audiocast to discuss these issues and the impact of DOMA and Proposition 8 on California employers.
Kate Gold, Partner
Summer Conley, Counsel
Cheryl Orr, Partner
Heather Abrigo, Counsel
This complimentary presentation will address:
Possible changes California employers need to make to welfare benefit and retirement plans.
How beneficiaries are now determined.
What documentation employers can require in confirming a domestic partnership or same sex marriage?
The intersection between DOMA and … Read More »
By: William R. Horwitz
Earlier this month, the United States Court of Appeals for the Second Circuit, in Dejesus v. HF Management Services, 2013 U.S.App.LEXIS 16105 (2d Cir. August 5, 2013), held that plaintiffs cannot rely solely on vague allegations in asserting claims for unpaid overtime. In this case, the plaintiff alleged that her former employer had failed to pay her overtime, but her Complaint lacked details such as the amount of overtime she had allegedly worked. Instead, it simply parroted the language of the Fair Labor Standards Act (“FLSA”). Affirming dismissal of the Complaint, the Second Circuit agreed with the district court that the allegations failed to state a claim. This decision makes it more difficult for plaintiffs who lack a basis for an unpaid overtime claim to file a lawsuit in the hope … Read More »
By: Marion B. Cooper
United States Secretary of Labor, Thomas Perez, recently issued an internal memorandum to department staff outlining the Department of Labor’s plan to issue guidance documents which will, among other things, make protected leave available to same-sex couples under Family and Medical Leave Act (“FMLA”). This action comes as the Department prepares to implement the Supreme Court’s recent decision in U.S. v. Windsor, which struck down the provisions of the Defense of Marriage Act (“DOMA”) that denied federal benefits to legally married same-sex spouses. Calling it a “historic step toward equality for all American families,” Secretary Perez noted that the Department of Labor will coordinate with other federal agencies to make these changes “as swiftly and smoothly as possible.”
Secretary Perez stated that guidance documents would be updated to remove references to DOMA and to “affirm the availability of … Read More »