Employers, It’s Time to Replace Your Mandatory EEOC Poster

On October 20, 2022, the U.S. Equal Employment Opportunity Commission (EEOC) released an updated version of its mandatory workplace poster that informs employees of their rights and protections.

Employers must post this new version of the poster in their office spaces as soon as practicable.

The latest “Know Your Rights” flyer, which replaces the previous “EEO is Law” poster, must be displayed in all workplaces covered by the agency’s jurisdiction. This includes private sector businesses with 15 or more employees, as well as state and local government agencies, educational institutions, unions, and staffing agencies.

What’s Changed?

The new poster includes several updates from the older version. Some of the main changes are:

  • Clarification that sex discrimination includes discrimination based on pregnancy and related conditions, sexual orientation, or gender identity;
  • Identifies harassment as a prohibited form of discrimination;
  • Provides information about equal pay discrimination for federal contractors; and
  • Uses more straightforward language and formatting.

The poster also includes a QR code for employees with a smartphone or other compatible devices to quickly access the EEOC’s website on how to file a charge of employment discrimination.

What’s Remained the Same?

While the poster has been updated, some of the information included remains the same. The bulletin still outlines the types of discrimination that are prohibited by federal law, such as:

  • Race, color, sex (including pregnancy and related conditions, sexual orientation, or gender identity), national origin, religion,
  • Age (40 and older),
  • Equal pay,
  • Disability,
  • Genetic information (including family medical history or genetic tests or services), and includes
  • Retaliation for filing a charge, reasonably opposing discrimination, or participating in a discrimination lawsuit, investigation, or proceeding.

Actions Employers Should Take

Employers who fail to post the new Know Your Rights poster could face noncompliance penalties from the EEOC. Therefore, businesses must take the time to update their posters as soon as possible.

On October 25, 2022, the EEOC distributed an FAQ stating that employers should remove the old poster and display the new one “within a reasonable amount of time” but did not provide a specific deadline.

The agency recommends that employers post the new flyer in a conspicuous place where employees will see it, such as in a break room or near the time clock.  Covered employers should also consider posting an online notice on their website for remote or hybrid workers.

You can download a copy of the poster here.

© 2022 Ward and Smith, P.A.. All Rights Reserved.

Love and Basketball … and Romantic Workplace Relationships? Key Takeaways for Employers from the Boston Celtics’ Recent Suspension of its Head Coach

The Boston Celtics recently suspended its head coach Ime Udoka for the entire 2022-2023 season and although the team did not disclose whether the suspension will be paid or unpaid, it noted that he will be subject to a “significant financial penalty” as a result of multiple unspecified violations of the organization’s policies stemming from Udoka’s conduct towards a female member of the organization.

Originally believed to have been a consensual relationship, it was subsequently reported that the female staff member accused Udoka of making unwanted advances, including inappropriate comments towards the staff member.  In response, the Celtics organization acted quickly and launched an internal investigation, which found “a volume of violations” of various policies.  Please note, it is unknown as to whether the Celtics had a consensual relationship policy in place for employees.

The Celtics scandal comes at a time when workplace harassment claims (as reported by the EEOC) are on the rise, yet consensual office romantic relationships remain fairly common.  While most employees do not want their employers placing limits on whom they may seek as a romantic partner, from an employer’s viewpoint, the risks of such romances are clear, as they can easily cause real issues in the workplace: interoffice gossip, lack of productivity, reduced moral, allegations of favoritism, or worse, claims of sexual harassment.

Fortunately, employers have several options available to minimize risk. Employers can rely on various types of anti-fraternization policies (also known as workplace romance or consensual relationship policies) and/or love contracts.  Separate, but related, employers should also implement robust anti-harassment policies and training for all employees (including management).

Relationship Policies

Some employers choose to implement a policy banning all romantic relationships between employees regardless of position or authority.  These policies discourage personal and romantic workplace relationships and threaten discipline against employees who violate the policy. Other employers opt for a more flexible policy, which only prohibits romantic relationships where one individual has the ability to affect the terms and conditions of the other’s employment, including but not limited to, compensation, assignments, and promotions. This latter policy is more common as it is often less intrusive and aimed at preventing favoritism or claims of sexual harassment or retaliation.

Regardless of the policy used, most employers also include a disclosure requirement, which then allows the employer to determine the best course of action forward (e.g. eliminating the reporting relationship)..

Further still, some employers, in addition to their relationship policy, have used “love contracts” that couples sign to confirm their consensual relationship status, affirm their awareness of the company’s sexual-harassment and workplace conduct policies and other expectations related to conducting themselves in the workplace, indicate that they understand the consequences if they fall short of the company’s expectations.

Employer Actions After A Relationship Disclosure

Such policies and related documents allow employees to come forward as early as possible so employers can proactively address a situation.  For example, it allows employers to remove any supervisory oversight or doubt that such a relationship is consensual, while also setting expectations with both employees about their conduct in the workplace during the relationship, and if and after the relationship ends.  As part of this expectation setting discussion, even in the absence of a reporting relationship, employers should make sure to provide a copy of its anti-harassment policy to the dating employees and have them reaffirm they will comply with its terms and conditions.  Employers should also confirm with each employee that they will immediately disclose when the relationship ends or is otherwise no longer consensual.

Anti-Harassment Policies & Training

Ultimately, and regardless of what policy an employer adopts, all employers should have a clear anti-harassment policy that, among other things, defines and clearly prohibits sexual harassment and requires all employees to report sexual harassment, including any unwanted advances or comments.

Such policies should include a complaint procedure that is readily accessible to employees and provides multiple avenues for raising complaints.  It should confirm that the company will promptly and thoroughly investigate all complaints and will not retaliate against any individual who reports or participates in an investigation of harassment (including sexual harassment).

It is crucial that employers think about responding in a fashion similar to the Celtics’ in promptly investigating and addressing alleged misconduct.  For example, the Celtics quickly engaged independent outside counsel to conduct a thorough investigation, which positioned the Celtics well to determine its appropriate next steps.  Critically, the Celtics did not appear to allow the employee’s status within the organization to interfere or impact its decision to enforce its policies and impose serious penalties.  By following the Celtics’ lead, employers can, among other things, create an environment where employees feel safe to complain and further eliminate the possibility of misconduct in the workplace, while also enhancing any legal defense in the event a lawsuit follows.

Having written policies is key, but it is equally important that employees, particularly supervisors or managers, are thoroughly trained on how to recognize potentially problematic situations, including when employees are dating, and how to respond to and further report potential policy violations.  Some jurisdictions even make training a statutory requirement.

Key Takeaways for Employers

The reality is that romantic relationships in the workplace occur and those employers that are proactive in anticipating such relationships and responding to them when they occur will be best positioned to limit potential liability.  Employers should consider taking the following actions:

  • Adopting a consensual relationship policy that is best suited for the company;
  • Ensure the use of a robust anti-harassment policy;
  • Periodically conduct anti-harassment training; and
  • Be prepared to monitor and respond upon learning of a relationship between your employees.
©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Supreme Court Questions Whether Highly Compensated Oil Rig Worker Is Overtime Exempt

On October 12, 2022, the Supreme Court of the United States heard oral arguments in a case regarding whether an oil rig worker who performed supervisory duties and was paid more than $200,000 per year on a day rate basis is exempt from the overtime requirements of the Fair Labor Standards Act (FLSA).

The case is especially significant for employers that pay exempt employees on a day rate. It could have a major impact on the oil and gas industry in the way that it recruits, staffs, and compensates employees who work on offshore oil rigs and at remote oil and gas work sites. In addition, depending on how the Supreme Court rules, its decision could have much broader implications.

During the arguments in Helix Energy Solutions Group, Inc. v. Hewitt, the justices questioned whether, despite the employee’s high earnings, he was eligible for overtime compensation because he was paid by the day and not on a weekly salary basis. There is no express statutory requirement that an employee be paid on a “salary basis” to be exempt from overtime requirements, but such a requirement has long been included in the regulations issued by the U.S. Department of Labor (DOL) applicable to the FLSA’s white-collar exemptions. Notably, Justice Brett Kavanaugh suggested during the arguments that the regulations may be in conflict with the text of FLSA, although Helix did not raise this issue in its petition for certiorari.

Background

The case involves an oil rig “toolpusher,” an oilfield term for a rig or worksite supervisor, who managed twelve to fourteen other employees, was paid a daily rate of $963, and earned more than $200,000 annually. Between December 2014 and August 2017, when Michael Hewitt was discharged for performance reasons, he worked twenty-eight-day “hitches” on an offshore oil rig where he would work twelve-hour shifts each day, sometimes working eighty-four hours in a week. After his discharge, Hewitt filed suit alleging that he was improperly classified as exempt and therefore was entitled to overtime pay. The district court ruled in favor of Helix.

In September 2021, a divided (12-6) en banc panel of the U.S. Court of Appeals for the Fifth Circuit held that Hewitt was not exempt from the FLSA because his payment on a day-rate basis did “not constitute payment on a salary basis” for purposes of the highly compensated employee (HCE) exemption that is found in the FLSA regulations.

The Fifth Circuit further concluded that the employer’s day-rate pay plan did not qualify as the equivalent of payment on a salary basis under another FLSA regulation because the guaranteed pay for any workweek did not have “a reasonable relationship” to the total income earned. In other words, the court found that the employee was not exempt because the $963 he earned per day was not reasonably related to the $3,846 the employee earned on average each week.

Oral Arguments

Oral arguments at the Supreme Court focused on the interplay between the DOL’s HCE regulation, 29 C.F.R. § 541.601, and another DOL regulation, 29 C.F.R. § 541.604(b), which states that an employer will not violate the salary basis requirement under certain limited circumstances even if the employee’s earnings are computed on an hourly, daily, or shift basis.

At the time of Hewitt’s employment, the HCE exemption required an employee to be paid at least $455 per week on a “salary or fee basis” and to earn at least $100,000 in total annual compensation. Those threshold amounts have since been increased to $684 per week and $107,432 per year.

The other regulation, 29 C.F.R. § 541.604(b), states that an employee whose earnings are “computed on an hourly, a daily or a shift basis” may still be classified as exempt if the “employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a reasonable relationship exists between the guaranteed amount and the amount actually earned. The reasonable relationship test will be met if the weekly guarantee is roughly equivalent to the employee’s usual earnings at the assigned hourly, daily, or shift rate for the employee’s normal scheduled workweek.”

Hewitt earned double the minimum total compensation level for the HCE exemption. Since the minimum salary level for the exemption was only $455 per week, and Hewitt was guaranteed that he would be paid at least $963 per week for each week he worked at least one day, Helix argued that he was exempt from the FLSA’s overtime requirements because the HCE exemption was completely self-contained and to be applied without regard to other regulations, including the “salary basis” test and the minimum guarantee regulation. Hewitt argued that the HCE exemption required compliance with either the “salary basis” test or the minimum guarantee regulation since he was admittedly paid on a day rate basis.

However, Justice Ketanji Brown Jackson suggested that it was not that simple. Justice Jackson said the question of salary basis is more about the “predictability and regularity of the payment” for each workweek. “What he has to know is how much is coming in at a regular clip so that he can get a babysitter, so that he can hire a nanny, so that he can pay his mortgage,” Justice Jackson stated. Justice Jackson echoed the language of the salary basis test requiring that an exempt employee be paid a predetermined amount for any week in which she performed any work.

Similarly, Justice Sonia Sotomayor asked Helix, “so what you’re asking us to do is take an hourly wage earner and take them out of 604, which is the only provision that deals with someone who’s not paid on a salary basis.” Justice Sotomayor additionally raised the FLSA’s goal of “preventing overwork and the dangers of overwork.”

In contrast, Justice Clarence Thomas suggested that Hewitt’s high annual compensation relative to the average worker is a strong indication that he was paid on a salary basis and should be exempt. “The difficulty is just, for the average person looking at it, when someone makes over $200,000 a year, they normally think of that as an indication that it’s a salary,” Justice Thomas stated.

Justice Kavanaugh asked if the issue of whether the DOL regulations conflict with the FLSA is being litigated in the courts. He said, “it seems a pretty easy argument to say, oh, by the way, or maybe, oh, let’s start with the fact that the regs [sic] are inconsistent with the statute and the regs [sic] are, therefore, just invalid across the board to the extent they refer to salary.” He further stated, “if the statutory argument is not here, I’m sure someone’s going to raise it because it’s strong.”

Key Takeaways

It is difficult to predict how the Supreme Court will rule in this case. A decision that requires strict adherence to the regulation’s reasonable relationship test, even when the minimum daily pay far exceeds the minimum weekly salary threshold, would have a significant negative impact on the manner in which certain industries compensate their workers. It also could lead to even more litigation by highly compensated employees, many of whom make more money without receiving overtime pay than what many people who currently are paid overtime compensation make.

Depending upon its breadth, a decision that the regulations are in conflict with the statutory text of the FLSA could provide a roadmap for additional challenges to other parts of the regulations. This could have a wide-ranging impact, as the DOL currently is in the process of preparing a proposal to revise its FLSA regulations. Then again, if a future litigant takes up Justice Kavanaugh’s invitation to challenge whether the salary regulations are overbroad compared to the language of the FLSA, the current effort to revise the regulations regarding exemptions for executive, administrative, and professional employees may be moot.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Five New Employment Laws that Every California Employer Should Know

A new year brings new employment laws for California employers.  California employers will want to begin revising employee policies and handbooks now, so that they are prepared to comply with these new laws when the majority of them go into effect on January 1, 2023.  Here are five new employment laws that every California employer should know:

AB 1041 (Expanded Definition of “Family Member” for Medical and Sick Leave)

Through AB 1041, the California legislature amended Government Code section 12945.2 and Labor Code section 245.5 to expand the definition of “designated person” for purposes of employee medical leave.  Section 12945.2 provides qualifying employees with up to 12 workweeks in any 12-month period for unpaid family care and medical leave.  Section 245.5 relates to California paid sick leave.  Both sections permit an employee to take protected leave to care for a “family member,” which is currently defined as a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner.  With the passage of AB 1041, the Legislature added a “designated person” to this list of “family members” for whom an employee may take protected leave.  A “designated person” is defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.”  In light of this broad definition, employers should be prepared to provide employees with leave to care for a wider range of persons.  An employee may identify his or her designated person at the time of requesting protected leave.  However, an employer may limit an employee to one designated person per 12-month period.

AB 1949 (Bereavement Leave)

AB 1949 adds section 12945.7 to the Government Code, in order to provide employees with protected leave for bereavement.  Under this new law, eligible employees may request up to five days of bereavement leave upon the death of a qualifying family member.  Family member is defined as a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent in law.  Although the employee must complete bereavement leave within three months of the family member’s death, the employer may not require that the five days be used consecutively.  Statutory bereavement leave is unpaid, but the employer must allow the employee to use any accrued and unused paid vacation, personal leave, sick leave, or other paid time off for this purpose.  Section 12945.7 prohibits discrimination, interference or retaliation against an employee for taking bereavement leave; also, the employer must maintain confidentiality when an employee takes bereavement leave. Finally, section 12945.7 does not apply to certain union employees, with an existing agreement regarding bereavement leave.

SB 1162 (Posting Pay Ranges and EEO Reporting Requirements)

SB 1162 modifies Government Code section 12999 and Labor Code section 432.3 to require employers to provide candidates with salary ranges on job postings, report employee compensation and demographic information to the California Civil Rights Department (formerly the DFEH) on an annual basis, and retain relevant records.  For job postings (including those posted by third parties), employers with 15 or more employees will be required to include a pay range, which is defined as the salary or hourly wage range that the employer reasonably expects to pay for the position.  In addition to the current requirement that, upon request, the employer must provide a candidate a pay range, the employer must now also provide existing employees with a pay range, when requested.  Failure to comply with the pay range disclosure or record retention requirements can result in penalties of up to $10,000 per violation.

The new reporting requirement concerns annual employer pay data reports.  Employers must now report the median and mean hourly rate by each combination of race, ethnicity, and sex, within each job category, with the first report due on May 10, 2023, based on 2022 pay data.  Employers with 100 or more employees hired through labor contractors must now produce data on pay, hours worked, race/ethnicity, and gender information in a separate report.  Employers who fail to timely file these required reports face civil penalties of up to $200 per employee.

Finally, employers must retain records of job titles and wage rate histories for each employee for the duration of the employee’s employment and three years after termination.  Failure to comply with these retention requirements can result in penalties of up to $10,000 per violation.

AB 2188 (Off the Job Cannabis Use Protection)

Effective January 1, 2024, AB 2188 adds section 12954 to the Government Code, which prohibits employers from discriminating against a person because of cannabis use while off the job, with some exceptions.  Employers may take action against a person who fails a pre-employment drug test, or other employer-required drug test, that does “not screen for non-psychoactive cannabis metabolites.”  This is because, according to the California Legislature, cannabis “matabolites do not indicate impairment, only that the individual has consumed cannabis in the last few weeks.”  The employer may administer a performance-based impairment test, and terminate any employee who is found to be impaired in the workplace.  This new law does not apply to employees in the building or construction industry, or in positions requiring a federal background investigation or clearance, and does not preempt state or federal laws that require employees to be tested for controlled substances.

AB 152 (COVID-19 Supplemental Paid Sick Leave Extension)

AB 152 modified Labor Code section 248.6 and 248.7 in order to extend COVID-19 Supplemental Paid Sick Leave (SPSL), previously blogged about here, which was expected to expire on September 30, 2022.  This new modification allows California employees to use any remaining SPSL through December 31, 2022.  It does not provide employees with new or additional SPSL.  In a departure from the original version of the law, when an employer requires an employee to take a COVID-19 test five days or later after a positive test result, the employer is now permitted to require the employee to submit to a second diagnostic test within no less than 24 hours.  If the employee refuses, the employer may decline to provide additional SPSL.  The employer obligation to cover the cost of any employee COVID-19 tests remains in effect.

© 2022 Proskauer Rose LLP.

‘Work From the Ballpark’—Is the Latest Remote Work Promotion a Foul Ball?

Some professional baseball teams are beginning to promote “Work From the Ballpark” days, encouraging fans to bring their laptops to a weekday afternoon game and work remotely from their seats. Under such promotions, fans can purchase tickets for a special section of the ballpark with access to WiFi, tables, and food so that they could stay logged on at work while enjoying the sights and sounds of the game. Employers are likely accustomed to dealing with employees who play hooky to attend an afternoon baseball game. But with the rise of remote work—and promotions such as these—should employers be concerned with employees logging into work from the ballpark?

While such a promotion might be cheeky marketing to increase attendance for midweek games, it highlights an ongoing concern for employers with remote employees—that instead of diligently working in home offices, employees are working, or attempting to appear to be working, while distracted or in a potentially problematic environment. Indeed, working from a sports stadium could put confidential work communications and information at risk with laptop screens in easy view of onlookers and lead to network security issues with public WiFi.

Employers may want to dust off their remote work policies and evaluate whether they provide clarity around appropriate locations to perform work.

What Can Employers Do About Nontraditional Remote Work Environments?

  1. Clear Remote Work Policies

Employers may want to review their policies to ensure there are clear provisions or guidelines governing what locations are appropriate for working remotely. As an additional element of security and visibility, employers may further want to require that employees performing certain kinds of sensitive work obtain consent to work from a secure location other than home when necessary.

  1. Employee Work Locations

In certain workplaces, employers may want to consider how they monitor employees and their productivity. Many technology tools enable employers to track employees’ online activities or the physical locations of company devices. Of course, employers may want to evaluate employee relations considerations tied to any monitoring program as well as the increasing and myriad state and local laws addressing employer monitoring programs.

  1. Network and Information Security Software

Employers mandating that employees perform any work on employer-provided hardware (e.g., employer-provided laptops) may want to ensure those devices have network and information security and location monitoring software installed and that the technology is up-to-date and sufficient for employees to perform their jobs. Employers that do allow employees to use their own devices (BYOD) may want to require the installation of similar remote work software on those devices. Employers may also want to consider providing employees with internet hotspots for times when employers know employees will be working in public locations to avoid having employees working from shared or open networks. At the same time, employers may want to beware of the risk that such hardware will be lost or stolen.

  1. Security Measures

In addition to hardware requirements, employers may want to consider implementing policies that require employees to take basic security measures on their own while working from a public location. Employers may consider requiring employees to take work phone calls in secure places, require the use of privacy screens over laptop monitors, warn against leaving laptops and other hardware unattended, and mandate other actions to address basic privacy and proprietary information concerns.

  1. Compensation for Time

If an employer does become aware that an employee has performed work at the ballpark or in another location where distractions may have been present, the employer may question whether it must pay the employee for the time the employee logged that day. There are a myriad of federal and state wage-and-hour laws that employers can consult (as well as a review of the employer’s policies) that will answer this question. Usually, however, if employees report that they performed work, the employer may decide to compensate them for their time and evaluate whether there is a separate counseling or disciplinary issue that relates to policy or rule violations to consider.

Key Takeaways

Employees working from home or remotely, at least part of the time, appears to be the future for many workplaces across the United States as technology has made it easier for employees to stay connected with work and complete work tasks. The “Work From the Ballpark” promotion may serve as a reminder for employers that they may want to consider ways to ensure employees are working from appropriate locations to maintain productivity and information security with a remote workforce.

For more Employment Law news, click here to visit the National Law Review.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Supreme Court Set to Decide Whether NLRA Preempts State Law Claims for Property Damage Caused During Strikes

The U.S. Supreme Court’s upcoming term will include review of whether the National Labor Relations Act (the “Act”) preempts state court lawsuits for property damage caused during strikes, which could have significant implications for employers and unions.

Factual Background

The case – Glacier Northwest Inc. v. International Brotherhood of Teamsters Local Union No. 174 – began over five years ago when the Union in Washington State representing the Employer’s truck drivers went on strike.  The Union timed their strike to coincide with the scheduled delivery of ready-mix concrete, and at least 16 drivers left trucks that were full of mixed concrete, forcing the Employer to rush to empty the trucks before it hardened and caused damage.  The Employer was able to do so, but incurred considerable additional expenses and, because it dumped the concrete in order to avoid truck damage, lost its product.

Employer Brings State Law Suit for Property Damage

After the incident, the Employer sued the Union under Washington State law for intentional destruction of property.  The Union argued that the suit was preempted by the Supreme Court’s decision in San Diego Building Trades Council v. Garmon, 359 U.S. 236 (1959) (“Garmon”).  In Garmon, the Supreme Court held that, although the Act does not expressly preempt state law, it impliedly preempts claims based on conduct that is “arguably or actually protected by or prohibited by the Act.”  The Supreme Court held in Garmon that conduct is “arguably protected” when it is not “plainly contrary” to the Act or has not been rejected by the courts or the National Labor Relations Board (the “Board”).

State Court Holdings

The Washington State trial court dismissed the Employer’s suit for property damage because strikes are protected by the Act.  The Washington Court of Appeals reversed, holding that intentional destruction of property during a strike was not activity protected by the Act, and thus, not preempted under Garmon.

Finally, the Washington Supreme Court reversed again, holding that the Act impliedly preempts the state law tort claim because the intentional destruction of property that occurred incidental to a work stoppage was at least arguably protected, and the Board would be better-suited to make an ultimate determination on this legal issue.

Question Before the Supreme Court

The Supreme Court will now determine whether the National Labor Relations Act bars state law tort claims against a union for intentionally destroying an employer’s property in the course of a labor dispute.

Under Garmon, the Act does not preempt suits regarding unlawful conduct that is plainly contrary to the NLRA, and the Employer argues that the strike at issue here was plainly unprotected because of the intentional destruction of property.  In other words, the conduct is not even arguably protected by the Act such that the Act would preempt – it was, rather, plainly unprotected conduct, and thus, the proper subject of a lawsuit.  The Employer also cited the “local feeling” exception to Garmon, which creates an exception to preemption where the States may have a greater interest in acting, such as in the case of property damage or violence.

The Union argued in opposition to the Employer’s certiorari petition that the Employer merely challenged the Washington Supreme Court’s conclusion that the conduct was arguably protected by the Act, and not its reasoning.  Moreover, whether or not the conduct was protected should be decided by the Board, which is better-suited to decide the matter.

Takeaway

Employers should gain much greater clarity into whether they can seek relief from such conduct via a damages lawsuit.  If the Court finds that such conduct is not preempted and may be litigated in state court, such a ruling could go far in protecting employers’ interests in contentious labor disputes and potentially shift the balance of power towards employers during these disputes.

© 2022 Proskauer Rose LLP.

NYC Issues Proposed Rules for Its Automated Employment Decision Tools Law

On Friday, September 23, 2022, the New York City Department of Consumer and Worker Protection (“DCWP”) releasedNotice of Public Hearing and Opportunity to Comment on Proposed Rules related to its Automated Employment Decision Tool law (the “AEDT Law”), which goes into effect on January 1, 2023. As we previously wrote, the City passed the AEDT Law to regulate employers’ use of automated employment decision tools, with the aim of curbing bias in hiring and promotions; as written, however, it contains many ambiguities, which has left covered employers with open questions about compliance.

The proposed rules are intended to clarify the requirements for the use of automated employment decision tools within New York City, the definitions of key terms in the AEDT law, the notices to employees and applicants regarding the use of the tool, the bias audit for the tool, and the required published results of the bias audit.

The DCWP’s public hearing on the proposed rules and deadline for comments are October 24, 2022. Although the proposed rules may be modified prior to adoption, the following summarizes the key provisions.

“Substantially assist or replace discretionary decision making”

The AEDT Law applies to an automated decision tool that is used “to substantially assist or replace discretionary decision making.” It does not, however, specify the type of activities that constitute such conduct or what particular AI-powered employment tools are covered by the law.

The proposed rules attempt to provide guidance on this issue by defining “substantially assist or replace discretionary decision-making” as one of the following actions:

  1. relying solely on a simplified output (score, tag, classification, ranking, etc.), without considering other factors; or
  2. using a simplified output as one of a set of criteria where the output is weighted more than any other criterion in the set; or
  3. using a simplified output to overrule or modify conclusions derived from other factors including human decision-making.

“Bias Audit”

Pursuant to the AEDT Law, before using an automated employment decision tool, a covered employer or employment agency must subject the tool to a “bias audit” no more than one year prior to the use of the of the tool.  The law explains that “bias audit” means an “impartial evaluation by an independent auditor,” but does not otherwise specify who or what constitutes an “independent auditor” or what the “bias audit” must contain. The proposed rules address these gaps.

First, the proposed rules define “independent auditor” as “a person or group that is not involved in using or developing an [automated employment decision tool] that is responsible for conducting a bias audit of such [tool].” This definition does not specify that the auditor must be a separate legal entity from the creator or vendor of the tool and therefore suggests that it may be acceptable for the auditor to be employed by the organization using the tool, provided the auditor does not use and has not been involved in developing the tool.

Second, the proposed rules state that the required contents of a “bias audit” will depend on how the employer or employment agency uses the tool.

If the tool selects individuals to move forward in the hiring process or classifies individuals into groups, the “bias audit,” at a minimum, would need to:

  1. calculate the selection rate for each category;
  2. calculate the impact ratio for each category; and
  3. where the tool classifies candidates into groups, the bias audit must calculate the selection rate and impact ratio for each classification.

If the automated employment decision tool merely scores candidates, the “bias audit” at a minimum, would need to:

  1. calculate the average score for individuals in each category; and
  2. calculate the impact ratio for each category.

The preamble to the proposed rules makes clear that DCWP intends these calculations to be consistent with the Uniform Guidelines on Employee Selection Procedures (“UGESP”), 29 C.F.R. § 1607.4, and borrows concepts from the framework established by the UGESP in the definitions of “impact ratio” and “selection rate.”

Under the AEDT Law, upon completion of a bias audit, and prior to using the automated employment decision tool, covered employers and employment agencies must make the date and summary of the results of the bias audit publicly available on the careers or job section of their website in a clear and conspicuous manner. The proposed rules clarify that publication may be made via an active hyperlink to a website containing the required information, as long as the link is clearly identified as linking to the results of the bias audit. The required information must remain posted for at least six months after the covered employer or employment agency uses the tool for an employment decision.

Required Notices

The AEDT Law also specifies that employers and employment agencies must notify candidates for employment and employees who reside in New York City as follows:

  1. at least ten business days prior to using an automated decision tool, that such a tool will be used to assess or evaluate the candidate or employee, and allow the individual to request an alternative selection process or accommodation;
  2. at least ten business days prior to use, the job qualifications and characteristics that the tool will use in the assessment or evaluation; and
  3. if not disclosed on the employer or employment agency’s website, information about the type of data collected for the tool, the source of such data, and the employer or employment agency’s data retention policy shall be available upon written request by the individual and be provided within thirty days of the written request.

Covered employers and employment agencies have expressed concern about the practical and administrative difficulties of providing the above notices in the fast-paced environment of today’s recruiting and hiring.

In apparent response to these concerns, the proposed rules clarify that the employer or employment agency may provide the notices required by paragraphs (1) and (2) by:

  1. (a) in the case of candidates, including notice on the careers or jobs section of its website at least ten business days prior to the use of the tool, and (b) in the case of employees, including notice in a written policy or procedure that is provided to employees at least ten business days prior to use;
  2. including notice in a job posting at least ten days prior to using the tool; or
  3. (a) in the case of candidates, providing notice via U.S. mail or email at least ten business days prior to use of the tool; and (b) in the case of employees, providing written notice in person, via U.S. mail, or email at least ten business days prior to use.

In short, under the proposed rule, an employer or employment agency could comply with the AEDT Law by providing the required notice when first posting the job.

With respect to the notice requirement in paragraph (3), the proposed rules state that an employer or employment agency must provide notice to covered individuals by including notice on the careers or jobs section of its website, or by providing written notice in person, via U.S. mail, or by email within 30 days of receipt of a written request for such information. If notice is not posted on the website, the employer or agency must post instructions for how to make a written request for such information on its careers or job section of the website.

Finally, although the AEDT Law requires an employer or employment agency to allow covered individuals to request an alternative selection process, the proposed rules state that nothing requires an employer or employment agency to provide an alternative selection process.

©2022 Epstein Becker & Green, P.C. All rights reserved.

OSHA Expands Criteria for Severe Violator Enforcement Program

In an announcement that expands the criteria for entry into the Occupational Safety and Health Administration’s (OSHA) Severe Violator Enforcement Program, OSHA has signaled that it is making enforcement a priority and that employers with willful, repeat, and failure-to-abate violations will be subject to significant consequences.

Key Takeaways

  • On September 15, 2022, OSHA announced that it was expanding its criteria for entering employers into its Severe Violator Enforcement Program (“SVEP”). The updated SVEP directive is available here.
  • Previously, entry into the program was limited to cases involving fatalities, three or more hospitalizations, high-emphasis hazards, the potential release of a highly hazardous chemical, and enforcement actions classified as egregious.
  • Now, an employer can be entered into the program in cases involving two or more willful, repeat, or failure-to-abate violations, regardless of the hazard involved. They will continue to be subject to entry in the program in certain cases involving fatalities, three or more hospitalizations, and enforcement actions classified as egregious.
  • In light of this expansion, employers should review their compliance records and current health and safety practices and consider whether further actions are needed to mitigate enforcement risks.

Background

In 2010, OSHA created the Severe Violator Enforcement Program to “concentrate[] resources on inspecting employers who have demonstrated indifference to their OSH Act obligations by willful, repeated, or failure-to-abate violations.” Under the original SVEP, OSHA would designate employers as “severe violators” if they were involved in an enforcement action:

  • Involving a fatality in which OSHA found one or more willful, repeat, or failure-to-abate violations;
  • Involving a catastrophe (three or more hospitalizations) in which OSHA found one or more willful, repeat, or failure-to-abate violations;
  • Involving a high-emphasis hazard in which OSHA found two or more high-gravity willful, repeat, or failure-to-abate violations;
  • Involving the potential release of a highly hazardous chemical in which OSHA found three or more high-gravity willful, repeat, or failure-to-abate violations; or
  • Classified by OSHA as “egregious.”

Employers entered into the SVEP were subject to consequences that included mandatory enhanced follow-up inspections, a nationwide inspection of related workplaces, negative publicity, enhanced settlement provisions, and the potential for federal court enforcement under Section 11(b) of the OSH Act.

Updated Criteria

Under the new criteria, employers will continue to be entered into the SVEP in enforcement actions involving a fatality or catastrophe in which OSHA found one or more willful, repeat, or failure-to-abate-violations and in enforcement actions classified as egregious.

In a departure from the original criteria, cases involving two or more high-gravity willful, repeat, or failure-to-abate violations will also be entered into the SVEP, regardless of whether they are linked to a certain hazard or standard. As a result of this change, OSHA expects that more employers will be entered into the SVEP.

Other Key Changes

In addition to expanding the criteria for entry into the SVEP, OSHA made key changes regarding follow-up inspections and removal from the SVEP.

  • Follow-up OSHA inspections must occur within one year, but not longer than two years after the final order. Previously, there was no required timeframe for conducting follow-up inspections.
  • Eligibility for removal will begin three years after the date an employer completes abatement. Previously, that period began running on the final order date.
  • If an employer implements an enhanced settlement agreement that includes the use of a safety and health management system that follows OSHA’s Recommended Practices for Safety and Health Programs, the employer can be eligible for removal after two years.

Implications

These changes signify that OSHA is prioritizing enforcement and intends to impose significant consequences on employers that repeatedly and/or willfully violate OSHA requirements. Employers should review their compliance records and current health and safety practices and evaluate whether additional action is needed to mitigate the risk for willful, repeat, or failure-to-abate violations and entry into the SVEP.

© 2022 Beveridge & Diamond PC

NLRB’s Proposed New Joint Employer Rule: What to Do Now to Manage the Risk

On September 7, 2022, the National Labor Relations Board (NLRB) issued a Notice of Proposed Rulemaking (NPRM) that would, if adopted, make it much easier for the NLRB to find a company to be a “joint employer” of persons directly employed by its contractors, vendors, suppliers and franchisees. The consequences of a joint employer finding are significant and can lead to: liability for unfair practices committed by the direct employer; a duty to bargain with a union representing the direct employer’s employees; exposure to liability for one’s own conduct that fails to take into account the indirect employer relationship and spread of a union from the direct employer’s employees to the indirect employer.

Joint-employer theory creates far more risk for employers than related doctrines such as single employer or alter ego because, unlike those theories, joint employer status does not require any common ownership or corporate control. Two companies operating entirely at arm’s length can be found joint employers.

The major proposed change relates to the degree of influence that an indirect employer must have to justify a finding of single employer status. Under the current NLRB standard, the indirect employer must actually exercise “immediate and direct” control over key terms of employment, normally limited to wages, benefits, hours and termination.

The proposed rule relaxes that standard in three key ways. First, it eliminates the actually exercise requirement and states that possession of even unused authority can be sufficient.

Second, it does away with the immediate and direct requirement so that influence exercised by the indirect employer through the direct employer can be used to support a finding.

Third, it expands, beyond the list enumerated in the current rule, the types of employment terms control of which will justify a finding of joint employer status. The Obama Board had adopted the currently proposed standard by an NLRB decision, Browning-Ferris Inds. 362 NLRB No. 186 (2015). However, that decision was overturned by the Trump Board’s adoption of the current rule, 85 FR 11184, codified at 29 CFR 103.40, (Feb. 26, 2020). The proposed rule seeks to reinstate Browning-Ferrisas the governing law.

Because Browning-Ferrisand the NPRM endorse pre-1984 NLRB decisions regarding joint employer status, those decisions provide guidance for how the new rule may be enforced. The NLRB and courts frequently relied on what authority was given to the alleged indirect employer in its agreement with the contractor or vendor. Clauses that required or allowed the indirect employer to approve hirings, terminations or wage adjustments to contractor employees usually resulted in finding joint employer status. In addition, cost-plus arrangements, particularly those that were terminable on short notice were often found to support a joint employer finding. Finally, clauses allowing the indirect employer to set work schedules, production rates, or requiring contractor employees to abide by the indirect employer’s work rules and other policies governing conduct also were found supportive of joint employer status.

The proposed rule is still subject to comment and revision, but it is likely to be adopted without significant change. The comment and review period, which closes on November 21, 2022, provides a window in which savvy employers can assess the risks to their organization when the Rule goes into effect. A key step is to examine existing contractual relationships with vendors to identify and modify those terms that may potentially support joint employer status, or, if modification is untenable, to manage the risk through indemnity agreements with the vendor.

© 2022 Miller, Canfield, Paddock and Stone PLC

Could Leagues and Teams be Joint Employers Before the NLRB?

The National Labor Relations Board (NLRB) has released a Notice of Proposed Rulemaking to change the standard for determining if two employers may be joint employers under the National Labor Relations Act (NLRA). The proposed rule, expected to become effective sometime in 2023, could make it more likely that professional and collegiate leagues would be found to be joint employers of any unionized professional players or collegiate student-athletes who play for teams that are members of those leagues.

As a joint employer of unionized players of member teams, a league could be jointly responsible for unfair labor practices committed by the teams or the team’s supervisors or managers (i.e., coaches and administrators), be required to participate in collective bargaining negotiations with the teams concerning the wages and other terms and conditions of employment of the players, and picketing directed at the league would be considered primary and therefore permissible (rather than secondary and subject to injunction).

Currently, the NLRB will find two or more employers to be joint employers if there is evidence that one employer has actually exercised direct and regular control over essential employment terms of another employer’s employees. An employer that merely reserves the right to exercise control or that has exercised control only indirectly will not be found to be a joint employer. The NLRB has proposed that the Browning Ferris standard be restored. Under the proposed rule, two or more employers will be found to be joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” Importantly – and the critical import of the proposed rule – the NLRB will consider both evidence that direct control has been exercised and that the right to control has been reserved (or exercised indirectly) over these essential terms and conditions of employment when reviewing two or more employers for status as joint employers.

Professional athletes are employees under Sec. 2(3) of the NLRA, of course. As for collegiate student-athletes, NLRB General Counsel Jennifer Abruzzo issued a memorandum, GC 21-08, announcing the intention to consider scholarship athletes at private colleges and universities to be employees because, as she wrote, they “perform services for their colleges and the NCAA, in return for compensation, and subject to their control.” Stating in summation “that this memo will notify the public, especially Players at Academic Institutions, colleges and universities, athletic conferences, and the NCAA, that [she] will be taking that legal position in future investigations and litigation” under the NLRA, Abruzzo signaled that conferences, leagues, and the NCAA will face joint-employer analysis in an appropriate case.

The “essential terms and conditions of employment” will translate to the sports workplace in the nature of game, practice and meeting times, travel and accommodation standards, equipment and safety standards, conduct rules and disciplinary proceedings, the length of a season, the number of games and playoff terms, and numerous other areas. Professional leagues may already coordinate with their member teams on a number of employment terms for players. For collegiate conferences and leagues, this may be new. Under the current standard, a league could better insulate itself from the decisions made by its members’ coaches and administrators by not exercising direct involvement in those matters. Under the proposed rule, a league or conference that merely has the power (even if reserved and unexercised) to make decisions affecting the “work” conditions for student-athletes could be jointly liable along with the institution for decisions made solely by the institution’s agents.

Consequently, conferences and leagues should consider training managers on their responsibility under the NLRA to private sector employees. They should also consider the role they want to play in collective bargaining should any of the student-athletes at their member institutions unionize.

Jackson Lewis P.C. © 2022