Category: Labor & Employment

DOJ, FTC, DOL, and NLRB Join Forces and Announce Memorandum of Understanding on Labor Issues in Merger Investigations

On August 28, the US Department of Justice (DOJ) Antitrust Division, which enforces the US antitrust laws including the Sherman Act and Clayton Act, and the Federal Trade Commission (FTC), which enforces the Federal Trade Commission Act and other laws and regulations prohibiting unfair methods of competition (together, Antitrust Agencies), along with the US Department of Labor (DOL) and National Labor Relations Board (NLRB) (together, Labor Agencies), announced that they entered into a Memorandum of Understanding on Labor Issues in Merger Investigations (MOU).
The MOU took effect on August 28 and expires in five years, unless it is extended or terminated upon written agreement of each of the agencies.

Purpose of the MOU

The MOU outlines a collaborative initiative between the signatory agencies to assist the Antitrust Agencies with labor issues that may arise during the course of antitrust merger and acquisition (M&A) investigations, commenced under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR). The HSR requires that parties to certain large M&As provide information to the Antitrust Agencies prior to the transaction’s consummation, which allows these agencies to analyze the anticipated transaction(s) and provide greater certainty to the parties regarding potential antitrust concerns.

From a labor perspective, these investigations may aim to evaluate whether the effect of a merger or acquisition could substantially lessen competition for labor. The stated goal of this MOU is to protect employees and promote fair competition in labor markets. Specifically, the MOU outlines methods by which the Labor Agencies may aid or advise the Antitrust Agencies on potential labor issues identified during the course of these evaluations. These methods include the following.

1. Labor Information Sharing

The MOU outlines various ways in which the Antitrust Agencies may work with the Labor Agencies to gather information used to evaluate potential impacts of M&As on labor markets. These include:

  1. Soliciting information from relevant worker stakeholders and organizations.
  2. Seeking the production of information and data with respect to labor markets.
  3. Searching publicly available sources of information made available by the Labor Agencies.
  4. Seeking production of non-public information and data related to labor markets from the Labor Agencies.

2. Providing Training and Technical Assistance

Labor Agencies agree to provide technical assistance and training to personnel from the Antitrust Agencies related to subject matter under their jurisdictions. For example, the NLRB will train personnel from Antitrust Agencies on labor-related issues such as the duty to bargain in good faith, successor bargaining obligations, and unfair labor practices. Additionally, the Antitrust Agencies may seek technical assistance on labor and employment law matters in merger reviews, including in the resolution of labor market merger investigations.

3. Collaborative Meetings

The Labor Agencies and Antitrust Agencies will seek to meeting biannually to discuss the implementation and coordination of activities outlined in the MOU.

This MOU expands upon collaborative efforts amongst the agencies and builds upon several MOUs executed in 2022 and 2023. MOUs between the DOJ and DOL, DOJ and NLRB, DOL and FTC, and FTC and NLRB all indicate that the purpose and scope of the agreements are to “strengthen the Agencies’ partnership through greater coordination in information sharing, coordinated investigations and enforcement activity, training, education, and outreach.”

Takeaways

This multi-agency agreement further emphasizes the current administration’s focus on protecting employees from alleged unfair methods of competition. This MOU is further evidence that antitrust regulators are looking at antitrust enforcement from a new perspective. Traditionally, Antitrust Agencies evaluated proposed M&As to identify potential risks of harm to consumers through the reduction of options or increased prices. Now, Antitrust Agencies appear to have turned their focus towards anticompetitive behaviors that may harm employees.

Employers interested or involved in an M&A deal should conduct thorough internal reviews to ensure compliance with both labor-related and fair competition laws. In the event of a review by the DOJ or FTC, employers should partner with experienced labor and employment lawyers to navigate through these investigations.

© 2024 ArentFox Schiff LLP
For more on Merger Investigations, visit the NLR Mergers Acquisitions section

You Are Sponsoring a Foreign National Employee for Permanent Residency, Can You Clawback Some of the Fees?

Companies usually hire a foreign national who requires visa sponsorship because they cannot find a U.S. worker with those skill sets, which is frequently in the STEM fields. However, visa sponsorship comes with significant costs to the employer. Employers may be able to recover a portion of the immigration sponsorship fees by implementing what are called “clawback” provisions into their employment agreements. Clawback provisions are terms in the employment agreements that, in the event of a resignation by the employee before a certain date, require the employee to reimburse the employer for a portion of the costs or fees associated with his or her visa sponsorship.

Not All Visa Fees Can Be Clawed Back

But first, it’s important to understand which sponsorship fees and costs are potentially recoverable and which are prohibited from being “clawed back.”

  • H-1B Petition: Because these visas have a prevailing wage set by the U.S. Department of Labor (DOL) a H-1B employer may not clawback any attorney fees or government filing fees used to obtain the H-1B petition approval by U.S. Citizenship & Immigration Services (USCIS).
  • Other Visas: The same restriction applies to the Australian E-3 visa and the Singapore/Chile H-1B1 visas as well as the H-2A, H-2B, and J-1 visas.
  • PERM Labor Certification Sponsorship for Permanent Residency: PERM Is the most common method for an employer to sponsor a foreign national employee for permanent residency (green card). It is done by conducting recruitment and proving to DOL that no qualified U.S. worker applied for the position. An employer is required to pay for all of the fees and costs associated with the PERM process.
  • I-140 Immigrant Petition: After DOL certifies the PERM application and agrees that no qualified U.S. worker is available, the employer must file an I-140 immigrant petition with USCIS. The attorney fees and costs for the I-140 may be clawed back. The purpose of the I-140 immigrant petition is for the employer to prove to USCIS that the foreign national has the required education, experience and special skills outlined in the PERM filing with DOL. In addition, the I-140 includes financial documents showing that the employer has the ability to pay the offered wage.
  • I-485 Adjustment of Status to Permanent Resident filing: The employer may clawback the fees and costs associated with the I-485 adjustment of status application (green card).

Practice Pointers

  • Still At Will: The clawback provisions should be in writing. It should also indicate that the employment is still at will, if applicable.
  • Final Paycheck: The majority of states, including California, do not allow an employer to deduct anything from a final paycheck without the express consent of the employee. This includes fees and costs pursuant to the clawback provision.
  • Deterrence: Given that an employer cannot clawback from the final paycheck and suing a former employee to collect the amount in controversy is not always practical, a clawback provision can be used as a deterrence for early departure.

Listen to this post 

Copyright © 2024, Sheppard Mullin Richter & Hampton LLP.

(Employee) Therapy Anyone?

The recent WSJ article about employer-provided in-office therapy sessions raises some good points about destigmatizing mental health in the workplace and promoting overall wellness generally. But the article also reminds us about the risks of blurring lines between an employee’s personal and professional life and the potential dangers inherent in the spillover of confidential (personal, medical, and other information) in the workplace. I have written previously about the beneficial role performance evaluations may have as “talk therapy” in an employee’s career based upon the learning that comes with balanced feedback. But it seems to me that true talk therapy – undertaken by a licensed and trained professional in an appropriate diagnostic setting – does not belong in the workplace.

The article features an employer who provides an annual benefit of a dozen free on-site therapy sessions to its employees. While it is commendable to care about the whole employee, providing on-site therapy touches upon a few somewhat sensitive employment topics. The first concerns confidentiality of health information, which includes an employee’s decision to seek (or even not seek) medical treatment. The employer in the article was reported to have taken steps to provide a separate location for the therapy sessions so employees did not encounter each other during on-site therapy visits, as well as other privacy preservation measures. But the simple fact is that confidentiality is hard to guarantee for on-site employment activities. And even though GenX employees (and the generation of workers who follow them) do think differently about mental health and wellness than the generations preceding them, there is a real risk that an employee’s use of this benefit will become the topic of what used to be known as water cooler – now Slack – talk.

The other employment risk on-site therapy poses is the potential use of information that is disclosed during a therapy session. Ethical, licensing and medical rules govern what a therapist must and must not do with information learned about a patient, but what about information the therapist learns about an employer? This is particularly a concern if the information source and content is confirmed by several different employees and might be information that merits action (such as information suggesting that a manager is engaging in harassing or other actionable or illegal conduct). There is a reason employers follow guidelines when reports or complaints are made concerning such conduct. It is unclear how those guidelines should be followed if the contents of a therapy session are supposed to remain confidential, for good legal, therapeutic and ethical reasons.

It seems to me a far better approach for employers wishing to explore this benefit is to provide employees with a set amount of money (perhaps as part of a tax-advantaged benefit plan ) that the employee is encouraged to use at the employee’s discretion as part of well-being program designed to support all aspects of health (mental, physical and even financial fitness). That way therapy can be encouraged and supported, but kept separate in all other respects from the workplace. Therapy for all may be an excellent idea, but conducting it outside the confines of the workplace seems like a better one.

©1994-2024 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
For more news on Employer Provided Therapy, visit the NLR Labor & Employment section.

Dependent Work Permits – Is the U.S. Catching Up with Other Immigration Destinations?

There are many ways in which the U.S. immigration system is lagging behind those of other countries. We still put physical visas in passports – something Australia stopped doing nearly 10 years ago when they converted to a purely electronic visa system. Our immigration system is predominantly paper-based, with limited options for electronic filings, an area where other countries have fully embraced modern solutions. We also lag behind in other areas including processing times, expedite options, digital nomad immigration pathways, and having an immigration system responsive to changing economic needs for workers in specific occupations and sectors.

For a long time, the U.S. also lagged behind other countries when it came to supporting the immigration of dual-career couples, but that has changed over the last 10 years. This evolution was recently reinforced by the decision in Save Jobs USA v. DHS.

Since 2015, H-4 dependent spouses have been eligible for employment authorization documents (EADs) if they meet certain criteria, including being eligible for a green card but for a long wait due to annual and per-country limitations on green card approvals; criteria most H-4 spouses do not meet until they have been in the US for several years. The plaintiff in Save Jobs USA challenged this extension of work authorization as an unlawful use of the executive power of the Department of Homeland Security (DHS). On August 2, 2024, the Court of Appeals for the D.C. Circuit ruled that this was a lawful use of DHS’s power. Absent an appeal to the Supreme Court, this ends the uncertainty over H-4 EADs. This ruling, combined with a USCIS announcement in April 2024 that extended H-4 EADs for up to 540 days for those waiting for their EADs to be renewed, means that nearly 100,000 H-4 spouses can now pursue careers without fearing unexpected gaps in work authorization.

In addition, since 2021, the US has not required EADs for certain E and L spouses. Although this is not widely known (our team often gets asked about it), starting in November 2021, U.S. immigration agencies began issuing documents that allowed these spouses to work based only on their I-94 entry document, without requiring a separate EAD application. This eliminated lengthy delays and gaps in work authorization that inhibited the ability of dual-career couples to continue their dual pursuits following a relocation to the U.S. With these developments, the US is slowly aligning with other similar economies around the world that allow dependent spouses to work automatically.

There is still more progress that can be made. Currently, the Permits Foundation, an advocacy group focused on “enabling dual careers in the global workplace” characterizes 35 countries as allowing spouses or partners to work freely. The U.S. is included on that list, but the foundation notes that spouses are only allowed to work in certain categories and that work authorizations are often subject to long delays. In the U.S., access to work authorization is not available to all types of dependents. H-4 spouses are excluded until their H-1B spouse reaches a certain point in the green card process (something that takes about 4 years for many, amounting to a major career gap for a trailing spouse). Spouses of J-1 visa holders still need to apply separately for an EAD. Spouses of F-1 student visa holders are not allowed to work, even during the one to three years of post-graduation work authorization granted to international graduates of U.S. universities. We also do not grant any immigration status to unmarried partners. Although many other countries including Canada, the UK, the Netherlands, and Australia, provide an immigration path for non-married partners, there is no option for that when an unmarried couple wants to relocate together to the US (resulting in some interesting conversations and sometimes resulting in the complete cancellation of a proposed relocation). Overall, expanding work authorization to married (and even unmarried) partners of the workers already employed in the US in various non-immigrant categories could be a boon to the labor market. Our team is often asked how they can find new sources of skilled an unskilled workers to fill open positions. Expanding this avenue of work authorization would enable this latent talent pool, many of whom are already here in the US, to enter the US workforce.

Bottom line, if you are an accompanying spouse in one of the limited categories of dependents who do not need separate employment authorization (E or L), rejoice. You are probably be able to work in the US without needing anything more than the entry document issued when you arrive. If you are not one of those lucky ones, review your options with immigration counsel, and hope the U.S. continues to catch up with other immigration destinations.

Copyright © 2024, Hunton Andrews Kurth LLP. All Rights Reserved.
For more on Dependent Work Permits, visit the NLR Immigration section

Lyft Owes No Duty To Its Drivers To Do Background Checks On Riders

Al Shikha v. Lyft, Inc., 102 Cal. App. 5th 14 (2024)

While working as a Lyft driver, Abdu Lkader Al Shikra was stabbed by a passenger in a “sudden and unprovoked attack.” Al Shikra sued Lyft for negligence based on its failure to conduct criminal background checks on all passengers. The trial court granted Lyft’s motion for judgment on the pleadings, and the Court of Appeal affirmed dismissal of the complaint after concluding that conducting criminal background checks on all passengers would be “highly burdensome” to Lyft and that the type of harm Al Shikha suffered was not “highly foreseeable.”

© 2024 Proskauer Rose LLP.
For more from California Courts, visit the NLR Litigation Trial Practice section

US District Court Sets Aside the FTC’s Noncompete Ban on a Nationwide Basis

On August 20, the US District Court for the Northern District of Texas held that the Federal Trade Commission’s (FTC) final rule banning noncompetes is unlawful and “set aside” the rule. “The Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.”

The district court’s decision has a nationwide effect. The FTC is very likely to appeal to the Fifth Circuit. Meanwhile, employers need not concern themselves for now with the rule’s notice obligations, and the FTC’s purported nationwide bar on noncompetes is ineffective. Employers do, however, need to remain mindful of the broader trend of increasing hostility to employee noncompetes.

The Court’s Decision

On April 23, the FTC voted 3-2 to publish a final rule with sweeping effects, purporting to bar prospectively and invalidate retroactively most employee noncompete agreements. The court’s decision addressed cross-motions for summary judgment on the propriety of the FTC’s rule. The court denied the FTC’s motion and granted the plaintiffs’ motion for two reasons.

First, the court held that the FTC lacks substantive rulemaking authority with respect to unfair methods of competition under Section 6(g) of the FTC Act. In reaching its holding, the court considered the statute’s plain language, Section 6(g)’s structure and location within the FTC Act, the absence of any penalty provisions for violations of rules promulgated under Section 6(g), and the history of the FTC Act and subsequent amendments. Because the FTC lacked substantive rulemaking authority with respect to unfair methods of competition, and hence authority to issue the final noncompete rule, the court did not consider additional arguments regarding the scope of the FTC’s statutory rulemaking authority. Notably, the court did not consider whether the final rule could overcome the major questions doctrine.

Second, the court held that the FTC’s final noncompete rule was arbitrary and capricious under the Administrative Procedure Act (APA) because it was “unreasonably overbroad without a reasonable explanation” and failed to establish “‘a rational connection between the facts found and the choice made.’” The court heavily discounted studies that the FTC had relied upon that purported to measure the impact of statewide noncompete bans because no state had ever enacted a ban as broad as the FTC’s ban: “[t]he FTC’s evidence compares different states’ approaches to enforcing non-competes based on specific factual situations — completely inapposite to the Rule’s imposition of a categorical ban.” “In sum, the Rule is based on inconsistent and flawed empirical evidence, fails to consider the positive benefits of non-compete agreements, and disregards the substantial body of evidence supporting these agreements.” The court further held that the FTC failed to sufficiently address alternatives to issuing the rule.

In terms of a remedy, the court “set aside” the FTC’s final noncompete rule. The “set aside” language is drawn verbatim from the APA. The court noted that the FTC’s argument that any relief should be limited to the named plaintiffs in the case was unsupported by the APA. Instead, the court noted that its decision has a nationwide effect, is not limited to the parties in the case, and affects all persons in all judicial districts equally.

Further Litigation

In addition to a likely FTC appeal to the Fifth Circuit, two other cases are pending that likewise challenge the FTC’s final noncompete rule. First, in ATS Tree Services v. FTC, pending in the Eastern District of Pennsylvania, the district court previously denied the plaintiff’s motion for a preliminary injunction. Second, in Properties of the Villages, Inc. v. FTC, pending in the Middle District of Florida, the court enjoined the FTC from enforcing the rule against the named plaintiffs. A final judgment in one of these cases that differs from the result in the Northern District of Texas could eventually reach the courts of appeals and potentially lead to a circuit split to be resolved by the US Supreme Court.

Takeaways for Employers

For now, the FTC’s noncompete rule has been set aside on a nationwide basis, and employers need not comply with the rule’s notice obligations. Noncompetes remain enforceable to the same extent they were before the FTC promulgated its final rule. Depending on how further litigation evolves, the rule could be revived, a temporary split in authority could arise leading to confusion where the rule is enforceable in certain jurisdictions but not in others, or the rule will remain set aside.

An important part of the court’s decision is its rejection of the FTC’s factual findings, which were made in support of the rule, as poorly reasoned and poorly supported. As we discussed in our prior client alerts, we anticipate that employees may cite the FTC’s findings to support challenges to enforceability under state law. The court’s analysis of the FTC’s factual findings may substantially undermine the persuasive authority of the FTC’s findings.

Employers should anticipate that noncompete enforcements in the coming years will remain uncertain as courts, legislatures, and government agencies continue to erode the legal and policy justifications for employee noncompetes. This counsels in favor of a “belt and suspenders” approach for employers to protect their legitimate business interests rather than relying solely on noncompetes.

© 2024 ArentFox Schiff LLP
For more on the FTC Noncompete Ban, visit the NLR Labor Employment section

Deep in the Heart of Texas: Court Blocks FTC Non-Compete Rule

On August 20, 2024, the United States District Court for the Northern District of Texas invalidated the FTC’s rule banning most non-compete agreements.  Ryan LLC et al v. Federal Trade Commission, WL 3297524 (08/20/2024). In its highly anticipated opinion, the Court determined the FTC exceeded its authority in promulgating the rule and that the rule is arbitrary and capricious.  This decision was not limited to the parties before the Court and blocks the rule from becoming effective nationwide on September 4, 2024.  As a result, existing non-compete agreements may still be valid and enforceable when permitted under applicable law.

Ryan, LLC (“Ryan”) filed its lawsuit on April 23, 2024, arguing the FTC did not have rulemaking authority under the Federal Trade Commission Act, that the rule is the product of an unconstitutional exercise of power, and that the FTC’s acts and findings were arbitrary and capricious.  Several plaintiffs, including the U.S. Chamber of Commerce, intervened in the lawsuit to challenge the rule.

In July, the Court enjoined the FTC from implementing or enforcing the rule.  That ruling, however, was limited in scope and only applied to Ryan and the intervening plaintiffs.  Shortly thereafter, all parties filed motions for summary judgment.  Plaintiffs asked the Court to invalidate the FTC’s rule, and the FTC sought dismissal under the theory it has express rulemaking authority under the FTC Act.

The Court first examined the FTC’s statutory rulemaking authority and determined the rulemaking provisions under the FTC Act do not expressly grant the FTC authority to promulgate substantive rules.  The Court reasoned that although the Act provides some rulemaking authority, that authority is limited to “housekeeping” types of rules.  The Court concluded “the text and the structure of the FTC Act reveal the FTC lacks substantive rulemaking authority with respect to unfair methods of competition…”  As a result, the Court held the FTC exceeded its statutory authority in promulgating the rule.

Next, the Court considered whether the rule and the promulgation procedure was arbitrary and capricious.  The Court was unconvinced by the studies and other evidence relied on by the FTC in promulgating the rule and found that the FTC failed to demonstrate a rational basis for imposing the rule.  The Court also noted that the FTC was required to consider less disruptive alternatives to its near complete ban on non-compete agreements.  Although the FTC argued it had “compelling justifications” to ignore potential exceptions and alternatives, the Court concluded the rule was unreasonable and the FTC failed to adequately explain alternatives to the proposed rule.  Ultimately, the Court opined the rule was based on flawed evidence, that it failed to consider the positive benefits of non-compete clauses and improperly disregarded substantial evidence supporting non-compete clauses.

As a result of this ruling, the FTC’s rule will not become effective on September 4, 2024, short of any additional orders or rulings from a higher court reversing or staying the decision.  For the time being, the existing laws governing non-compete agreements will remain in place.  In Michigan, employers may enforce non-compete agreements that are reasonable in duration, geographical area and type of employment or line of business. In Illinois, they are regulated by the Illinois Freedom to Work Act, which imposes a stricter regulatory scheme. This should come as a relief for employers who can generally avoid—at least for now—analyzing complex issues regarding the impact that the FTC’s rule would have had on executive compensation arrangements tied to compliance with non-compete agreements, especially in the tax-exempt organization context.

© 2024 Miller, Canfield, Paddock and Stone PLC

by: D. Kyle Bierlein, Brian T. Gallagher, Barry P. Kaltenbach, Brian Schwartz of Miller Canfield

For more news on the Federal Court Ruling Against the FTC’s Non-compete Rule, visit the NLR Labor & Employment section.

Down to the Wire for Employers and FTC Noncompete Ban

Compliance Deadline Approaches

Employers are running out of time to comply with the FTC’s purported regulatory ban on non-competition agreements. The ban – announced on April 23, 2024 – is scheduled to take effect on September 4. 2024.

By that date, the regulation requires that employers notify all employees subject to noncompetes that the agreements will no longer be enforced. The only exceptions are existing agreements with “senior executives” who made at least $151,164 in the preceding year; these agreements are grandfathered. See our earlier alerts from April 23, May 14, and July 8 for further discussion on developments relating to the ban.

So Far, No Nationwide Injunction Against FTC’s Ban

As previously reported, a federal court in Dallas issued a preliminary injunction against the regulation on July 3, 2024. The injunction, however, only affects the parties to the lawsuit and the district in which the lawsuit was brought. When she issued that preliminary injunction, Judge Ada Brown committed to rendering a final decision on the plaintiffs’ request for a permanent injunction by August 30,2024.

However, she specifically declined to give her preliminary injunction nationwide effect. In its motion in support of a permanent injunction, the U.S. Chamber of Commerce and other parties are arguing that the court is required to vacate the rule, with nationwide effect, because it was adopted in violation of the Administrative Procedure Act. We cannot predict whether she will do so.

Meanwhile, since the July ruling in Texas, two other federal courts have issued rulings on requests to enjoin the ban, one in Philadelphia in favor of the FTC by denying an injunction, and the other in central Florida in favor of the employer by granting one. As with the Texas case, the Florida injunction is not nationwide. Moreover, that judge has not yet issued an opinion, so we do not yet know his rationale for the injunction.

Now What?

Where does this leave employers? In the absence of a ruling invalidating the FTC ban nationwide, there is nothing to prevent the FTC from enforcing its ban beginning September 4 anywhere outside of Dallas and mid-Florida. As far as we know, only the Northern District of Texas is able to order such a ban when it issues its final decision on or before August 30.

Even though, based on her initial ruling, it is quite likely Judge Brown will enjoin the regulation permanently, it is unclear whether she will take the additional step of giving her injunction nationwide effect.

To comply with the regulation, employers should prepare to act by September 4. We recommend creating a list of all current and former “workers” (defined as any service providers regardless of classification) subject to noncompete agreements and a written communication that meets the regulation’s notice requirements.

Unless a new order appears enjoining enforcement of the ban nationwide before September 4, employers will need to send out that communication in order to be in compliance. The requirements for sending the notice include identifying the “person who entered into the noncompete clause with the worker by name” (we don’t know if this means the individual or the entity) and hand delivering or mailing the notice to the worker’s last known mailing address, or to the last known email address or mobile phone number (by text). The full text of the rule, including a model communication from the FTC, can be found at pages 3850-06 of the May 7, 2024, Federal Register.

©2024 Pierce Atwood LLP. All rights reserved.
For more on the Noncompete Ban, visit the NLR Antitrust Trade Regulation section.

OSHA Proposes New, Far-Reaching Workplace Heat Safety Rule

In July 2024, the Department of Labor’s Occupational Safety and Health Administration (OSHA) announced a proposed rule (the “Proposed Rule” or “Rule”) aimed at regulating and mitigating heat-related hazards in the workplace. If enacted, the long-anticipated Rule will have far-reaching impacts on businesses with employees who work in warm climates or who are otherwise exposed to heat-related hazards.

According to OSHA, out of all hazardous weather conditions, heat is the leading cause of death in the U.S. The Proposed Rule seeks to protect employees from hazards associated with high heat in the workplace and would apply to both indoor and outdoor work settings. Among other requirements, the Proposed Rule would mandate that employers evaluate heat-related workplace hazards and implement a Heat Illness and Injury Prevention Plan (HIIPP) to address heat hazards through methods which include rest breaks, shade requirements, the provision of drinking water, acclimatization procedures, heat monitoring, and other tactics to protect workers. The proposed HIIPP requirement takes cues from state-level occupational safety and health agencies — like Cal/OSHA (California) and Oregon OSHA — which have already implemented heat safety and HIIPP requirements.

One provision of the Proposed Rule that has garnered significant attention is the paid rest break provision. As currently drafted, the Proposed Rule would require employers to provide one paid15-minute rest break every two hours on days where the heat index reaches 90° F or higher. The paid rest break provision implicates questions about the concurrent application of the Fair Labor Standards Act. For example, does this 15-minute break period count toward an employee’s “hours worked” for the purposes of calculating overtime?

Moreover, in light of the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo — in which the court overturned the longstanding principle of deference to agency interpretations previously set out under the 1984 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. case — significant questions remain about whether far-reaching mandates (like the paid rest break provision) are within OSHA’s authority. Given this new administrative landscape, if the Proposed Rule is enacted, we can expect challenges stemming from Loper Bright.

The Proposed Rule has not yet been published in the Federal Register. However, when such publication occurs, the Rule will be open to commentary from the public before becoming final. When OSHA announced the Proposed Rule, it simultaneously “encourage[d] the public to participate by submitting comments when the proposed standard is officially published in the Federal Register[,]” in order to “develop a final rule that adequately protects workers, is feasible for employers, and is based on the best available evidence.”

For more information regarding how to provide comments on this Proposed Rule, visit https://www.osha.gov/laws-regs/rulemakingprocess#v-nav-tab2.

© 2024 Foley & Lardner LLP
For more on OSHA, visit the NLR Labor Employment section

Hurricanes and Earthquakes and Wildfires, Oh My!—Key Disaster Preparedness Considerations for Employers

A rash of recent natural disasters, from hurricanes to earthquakes to wildfires, serves as a timely reminder to employers of the potential for natural disasters to disrupt their operations and cause imminent hazards in the workplace.

Quick Hits

  • Natural disasters may be unpredictable and devastating, but employers can take steps to mitigate the impact of natural disasters on their businesses and workforces.
  • Employers may want to brush off and review their disaster-response plans and consider other legal implications for responding to natural disasters.

Tropical Storm Debby has reportedly caused at least six deaths since making landfall in Florida as a Category 1 hurricane on August 5, 2024. The storm is now progressing up the East Coast, dropping heavy rains and spawning tornadoes.

Meanwhile, on August 6, a 5.2-magnitude earthquake struck Southern California, sparking fears of another devastating major earthquake. Both come as wildfires continue to ravage the Pacific Northwest and Canada, with experts warning of the risk of more in the coming weeks due to a combination of seasonal lightning and dry forests.

Mid-August to mid-October is typically peak hurricane season, but hurricanes, earthquakes, floods, and wildfires can occur at almost any time and with little warning. Such natural disasters cause physical damage, disrupt business operations, and affect employees’ well-being.

Given these risks, employers may need to take proactive steps to ensure the safety of their workforce and the continuity of their operations. Here are some considerations for employers that need to prepare for and manage the impacts of these natural disasters on their workplaces.

A Comprehensive Disaster Plan

Many employers have already crafted well-thought-out emergency or disaster-response plans tailored to their organizations and workplaces. Employers may want to review and regularly update these plans, which may include:

  • Emergency Communication: A plan may establish and outline clear communication channels, ideally through multiple avenues, with employees before, during, and after an event. To be effective, an emergency communication plan relies on a current and complete roster of employees, including home addresses, cell phone numbers, and personal email addresses. Now might be a good time for employers to ensure that rosters include all personnel added since the list was created and that they account for all changes in employee data.
  • Evacuation Procedures: A plan may set safe evacuation routes and meeting points. The plan might also include a designated date to reenact these procedures on a recurring basis.
  • Employee Support: A plan may establish a check-in system to account for the status and whereabouts of all employees during and after a disaster.
  • Data Protection: Employers may want to ensure that important company information and data are protected, backed up, and accessible from remote locations. This aspect of the plan will likely require collaboration with a company’s IT group and may involve purchasing additional equipment or software.

Flexibility in Work Arrangements

Natural disasters may cause physical damage to workplaces, create hazards for travel or commutes, and cause other disruptions that make it difficult for some employees to be physically present in the workplace or to work their regular hours. Given these challenges, employers may want to consider implementing:

  • flexible work arrangements, including temporary remote work policies;
  • adjustments to work schedules to accommodate transportation or safety issues;
  • leave availability for certain employees who may be forced to deal with family or medical issues caused by a natural disaster; or
  • a temporary suspension of operations if possible and if safety cannot be guaranteed.

Legal and Insurance Considerations

Understanding the legal and financial aspects of managing natural disasters is critical for any employer in a disaster scenario. Employers may want to review insurance policies to understand disaster coverage and be prepared to promptly report damage from a natural disaster. Further, employers in certain regulated industries may need to contact regulatory agencies regarding the status of their operations.

Applicable Federal Laws and Regulations

Natural disasters and disruptions to employee schedules may implicate a host of federal laws and regulations, including the Worker Adjustment and Retraining Notification (WARN) Act, the Fair Labor Standards Act (FLSA), the Occupational Safety and Health (OSH) Act, and the National Labor Relations Act (NLRA).

  • WARN Act: Typically, the law requires employers with fifty or more employees to provide advanced notice of plant closings or mass layoffs, but the law has an exception for plant closings or natural disasters that are the direct result of natural disasters. Natural disasters are defined in the WARN Act regulations as “[f]loods, earthquakes, droughts, storms, tidal waves or tsunamis and similar effects of nature are natural disasters.” Employers are still required to provide “as much notice as is practicable, and at that time shall give a brief statement of the basis for reducing the notification period.”
  • FLSA: Employers are required to pay employees for all hours worked, and if time records are lost as a result of the disaster, then they must pay employees based on their regular hours or have employees self-report hours worked. The FLSA does not require employers to continue to pay nonexempt workers if they are not required to work, or are unable to work, following a disaster, but the law does require that exempt, salaried workers be paid for any workweek in which some work has been performed.
  • OSH Act: The law, enforced by the Occupational Safety and Health Administration (OSHA), requires employers to protect employees against “recognized hazards,” including those caused by natural disasters. Notably, employees have a right to refuse to work if they have a good-faith belief that they might be exposed to imminent danger.
  • NLRA: Labor protections for workers who engage in “concerted protected activity” apply to issues over working conditions impacted by natural disasters. Employers may have further obligations in cases of natural disasters under their collective bargaining agreements.
  • State Law: Some states, like Texas and California, prohibit employers from discharging or taking other adverse action against employees who leave work, or fail to report to work, due to their participation in an emergency evacuation order issued for the public. Specifically, the California law took effect on January 1, 2023, and prohibits employers from taking adverse action against employees  “for refusing to report to, or leaving, a workplace or worksite within the affected area because the employee has a reasonable belief that the workplace or worksite is unsafe” in the event of an emergency condition.

Next Steps

Natural disasters may be unpredictable and devastating, but employers can mitigate the impact on their businesses and workforces through proper planning. As such, employers may want to consider reviewing or developing disaster preparedness plans and policies to ensure they are ready to handle complications caused by any natural disaster.

© 2024, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more news on Disaster Preparedness in the Workplace, visit the NLR Labor Employment section.