Category: Labor & Employment

In the News: Can Employers Require the COVID-19 Vaccine?

From when one will be available in the United States to where you may fall in the priority line, COVID-19 vaccines are dominating the news cycle right now. Unsurprisingly, a common question from employers has emerged: can we require employees to obtain a COVID-19 vaccine before returning to work?

In short, it depends

Because the EEOC has not issued guidance specific to the COVID-19 vaccine (not yet, anyway), its past guidance concerning whether an employer may require employees to get a flu vaccine is helpful. Generally, employers can require employees to receive a vaccine before returning to work, but there are a couple of caveats.

First, employees may be entitled to an exemption from a mandatory vaccination requirement, so it is important for employers to find out why an employee will not get the vaccine if asked to do so. An employee with (1) a covered disability or (2) a sincerely held religious belief, practice, or observance that prevents the employee from taking the vaccine may need to be excused from this requirement as a reasonable accommodation unless it will present undue hardship. For employers considering denying an accommodation based on undue hardship, it would be prudent to consult with your employment lawyer before doing so. Accommodation issues stemming from COVID-19, work from home, and administration of the COVID-19 vaccine are likely to continue to plague employers for the next couple of years (at least), so getting ahead of this issue is key.

Second, and practically speaking, it remains to be seen when vaccinations will start in the United States and, even then, how quickly vaccines will be commonly available for those who fall at the bottom of the priority line. In the meantime, employers should be considering whether a mandatory vaccination requirement is right for their workplace and, if so, when it will go into effect and the consequences for not complying (subject to the reasonable accommodation exemptions). What is right for each employer will depend on the workforce, the nature of the business, and many other factors.

So, what now?

With so many unknowns at this point, the best course of action is to plan ahead but remain flexible and wait to disseminate or implement any sort of policy or requirement. Take this opportunity to weigh the potential legal exposure of a mandatory vaccination requirement and consider whether a mandatory or voluntary (even if strongly encouraged) vaccination policy is appropriate based on the nature and needs of your business. Avoid a knee-jerk reaction; instead, balance workplace health and safety with employee rights and ensure those handling accommodation requests will be prepared. And if you have questions, consult your employment counsel before acting.

© 2020 Jones Walker LLP
For more articles on the COVID-19 vaccine, visit the National Law Review Coronavirus News section.

Eviction Moratoriums—A Light at the End of the Tunnel? It Depends

With increased cases of COVID 19, most industries are holding their breath as to how these cases will continue to affect their businesses.  This is especially true for residential landlords.  Since this past March there has been a mix of federal and state moratoriums restricting landlords from evicting tenants for non-payment of rent.  The most recent moratorium on residential evictions was issued by the Centers for Disease Control and Prevention (CDC).  The CDC’s order entitled “Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19,” which took effect upon publication in the Federal Register on Sept. 4, declares a national moratorium on certain residential evictions in the name of protecting the public health. See 85 Fed.Reg. 55292 (Sept. 4, 2020).

The creation of Order established a protection for a certain category of tenants, so long as they executed a Declaration Form asserting their qualifications as a “covered person.”  Once a tenant provides the declaration, the text of the order states that a landlord shall not “evict” the tenant from residential premises. See 85 Fed.Reg. at 55296.

While the CDC Order was issued to protect tenants, the ambiguities of the CDC moratorium have left the state courts to issue a patchwork of local Administrative Orders interpreting the moratorium and putting new process in place at the Magisterial District Court and Court of Common Pleas levels.  The result?  Unequal access by landlords to challenge the truthfulness of the CDC Declaration.

A review of the 67 judicial districts reveals a handful of counties that address the CDC moratorium and how it affects current landlord-tenant procedures.  Additionally, certain counties provide remedies for landlords to challenge the truthfulness of the Declaration Form.  By certain counties allowing landlords to challenge the truthfulness of the Declaration Form, it allows the moratorium to protect those truly defined as a “covered person.”  A majority of the judicial districts however are silent as to the landlord’s ability to challenge the Declaration Form, thus leaving landlords frustrated in scenarios where the tenant may not truly be a covered person and are allowed to remain in their apartment with little to no consequence.

With the number of COVID-19 cases increasing and the lack of any additional economic stimulus packages available will the CDC Moratorium be further extended? If it is, will the state Courts address the inequitable remedies currently created amongst the local counties?  Only time will tell.

©2020 Strassburger McKenna Gutnick & Gefsky
For more articles on evictions, visit the National Law Review Real Estate section.

Off Payroll Working—April 2021 Changes for the Private Sector

What’s the new law all about?

On 6 April 2021, the delayed off-payroll working/IR35 rules take effect in the private sector, being brought in to address non-compliance with IR35 in the private sector. The new law:

  • applies when an individual provides services personally to a client/end user via a qualifying intermediary (personal service company, partnership or individual);
  • moves responsibility for determining employment status and deducting payroll taxes to the client/end user.

Do the new rules affect me?

The law affects all UK businesses that use intermediaries other than those in the small business exemption, and requires cooperation along the contingent labour supply chain.

Is “doing nothing” an option?

Not without risking a tax bill, HMRC investigation and bad press.

What must end users do to comply?

  • Use reasonable care to make employment status determination statement (SDS)/IR35 assessments for theircontractors, asking if, absent the intermediary, the nature and conditions of the work would cause the worker to be classed, for tax purposes, as an employee;
  • before first payment, provide a copy of the SDS, and rationale, to the contractor and down the supply chain;
  • implement a process for resolving employment status disputes (and appeals); respond to challenges within the 45 day time limit.

As end users, what steps should we be taking now?

The team: Who will take ownership of off payroll working compliance? Multi-disciplinary: HR, tax, procurement, legal.

Audit of contingent workforce and review of labour supply chains: Who are your contractors and how are they engaged (e.g., directly, through personal service company or umbrella)?

Assess the impact of the new regime: Carry out SDSs and analyse what impact the new regime will have. Do engagements need ending, or renegotiating? Do working practices and arrangements need to change?

Implementing compliance process going forward: How will new contractors be identified? How will working practices be monitored and how will SDSs be kept up to date?

© 2020 Vedder Price
For more articles on L&E, visit the National Law Review Labor & Employment section.

OCIE Director Instructs Advisers to Empower Chief Compliance Officers

On November 19, 2020, Peter Driscoll, director of the Office of Compliance Inspection and Examination (“OCIE”) of the Securities and Exchange Commission (“SEC”), gave a speech urging advisory firms to empower their Chief Compliance Officers (“CCOs”).  The speech, made at the SEC’s annual compliance outreach conference, accompanied OCIE’s Risk Alert, issued the same day, identifying notable deficiencies and weaknesses regarding Registered Investment Advisors (“RIAs”) CCOs and compliance departments.  Driscoll’s speech complemented the Risk Alert by outlining the fundamental requirements for CCOs:  “empowered, senior and with authority.”

Under Rule 206(4)-7 promulgated under the Investment Advisers Act of 1940, 17 C.F.R. § 270.38a-1 (the “Compliance Rule”), an RIA must adopt and implement written policies and procedures reasonably designed to prevent violation of the Advisers Act and the rules thereunder.  According to Driscoll, this cannot be done unless the RIA’s CCO is empowered to fully administer the firm’s policies and procedures and holds a position of sufficient seniority and authority to compel others to comply with those policies and procedures.  In its Risk Alert, OCIE identified common compliance deficiencies among RIAs directly stemming from an unempowered CCO, including a lack of sufficient human resources to implement policies and procedures, failure of executive management to support the CCO, and even firing the CCO for reporting suspicious behavior.  In order to address and prevent these deficiencies, Driscoll described a set baseline expectations regulators should look for, and which firms can adopt, in assessing the power and authority of the CCO and compliance function.

  • Compliance Resources: RIAs should continually reassess their budgetary needs based on their business model, size, sophistication, adviser representative population and dispersal, and provide for sufficient resources as necessary for compliance with applicable laws.  This may mean hiring additional compliance staff and upgrading information technology infrastructure, especially if the firm has grown or taken on a new business.  Compliance staff should be trained, at a minimum, to perform annual reviews, accurately complete and file advisor registration forms (Form ADV), and timely respond to OCIE requests for required books and records.

  • Responsibility of CCOs: While CCOs may have multiple responsibilities, they must be, at a minimum, knowledgeable of the Advisers Act and its mandates in order to fulfill their responsibilities as CCO.  CCOs should not only assist firms from avoiding compliance failures, but should also provide guidance on new or amended rules.

  • Authority of CCOs: Senior management should vest CCOs with ample authority and routinely interact with them.   CCOs need to understand their firm’s business and, when necessary, be brought into the business decision-making process.  CCOs should also have access to critical operational information such as trading exception reports and investment advisory agreements with key clients.  CCOs should be consulted on all matters with potential compliance implications, such as disclosures of conflicts to clients, calculation of fees, and client asset protection.

  • Position of CCOs: At a minimum, CCOs should report directly to senior management, and preferably be a part of senior management.  CCOs should not be mid-level officers or placed under the Chief Financial Officer function.

  • Security of CCOs: CCOs should have confidence that they can raise compliance issues with the backing and support of senior management without being scapegoated or terminated.

These expectations should not be read as an exhaustive checklist but as a preliminary framework for evaluating the effectiveness of a firm’s compliance function and its CCO – key elements of a firm’s ability to comply with the mandates of the Compliance Rule.  This framework can be also be used to ensure the firm’s compliance function is appropriately tailored to its size, business model, and compliance culture.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.

Beltway Buzz: 2021 Labor and Employment Forecast

The results of the 2020 national elections are (mostly) in. Former vice president Joseph Biden is now President-elect Joseph Biden. Democrats have managed to hold the U.S. House of Representatives, but they will be working with the slimmest House majority in years. Control of the U.S. Senate is still not known at this time, though Republicans enjoy a 50–48 majority as we await two runoff elections in Georgia scheduled for January 5, 2021. If Democrats win both of those races, they will seize control of the upper chamber, as the vice president (who under the Constitution of the United States also serves as president of the Senate) can provide a tie-breaking vote in the event of a 50–50 deadlock. Any other outcome in Georgia will tilt the Senate balance in favor of Senator Mitch McConnell (R-KY) and the Republicans.

While the results of the congressional elections may put a damper on a robust Democratic legislative reform agenda, the Biden presidency will still bring a dramatic shift to the federal labor and employment policy landscape. The 180-degree turn in regulatory employment policy priorities that will likely result will undoubtedly create uncertainty for employers, which are already dealing with a pandemic and an unstable economy. Set forth below are the major labor and employment policy changes to anticipate for 2021.

I. Executive Actions

The quickest and easiest way for newly sworn-in President Joe Biden to initiate policy changes will be by rescinding certain executive orders issued by then former president Donald Trump and issuing his own executive orders. Revoking myriad Trump executive actions relating to immigration will top the list, including those relating to refugees and asylees, certain COVID-19–related travel restrictions, and the ban on certain nonimmigrant visas (Presidential Proclamation 10052 of June 22, 2020). In turn, Biden is likely to reinstitute the Deferred Action for Childhood Arrivals (DACA) program, as well as the temporary protected status of certain eligible nationals.

In the employment law space, Biden is expected to revoke President Trump’s Executive Order on Combating Race and Sex Stereotyping, which is opposed by civil rights groups and members of the business community. It is very possible Biden may follow this action with a proactive requirement on federal contractors to require diversity and inclusion or implicit bias training and programs. Additionally, Biden may also attempt to resuscitate a version of former president Barack Obama’s Fair Pay and Safe Workplaces executive order.

II. Congress: A More Modest Agenda

Leading up the election, there was much speculation regarding whether the Democrats would abandon the legislative filibuster in the event that they took control of the Senate. Such a move would allow senators to pass legislation with a simple majority vote (51 votes), rather than the 60-vote threshold that is currently required. Eliminating the filibuster would be a monumental and historic change to the way bills are drafted and passed in Congress. In this scenario, a Senate without the filibuster would enable Democrats to expand the number of seats on the Supreme Court of the United States and to pass legislation dealing with the COVID-19 crisis, voting rights, gun control, climate action, LGBTQ rights, and more.

The elections and political aftermath, however, have created a situation in which the filibuster will more than likely survive. At best, the Democrats would have 50 senators in 2021. A tiebreaking vote by a Vice President Kamala Harris would, therefore, appear to give the Democrats the necessary votes to scrap the filibuster, but Senator Joe Manchin (D-WV) has already stated that he will not vote to eliminate the filibuster, and others in the Senate Democratic Caucus have expressed similar concerns. Thus, with the filibuster likely remaining intact, Republicans will be better able to thwart the Democrats’ legislative efforts, even if the Democrats win both Senate races in Georgia. Similarly, if Republicans prevail in one or both of the Georgia races, Senate Democrats will be able to filibuster Republican bills. (The White House and House of Representatives would also obviously work as a check on the Senate.)

A. Potential Employment-Related Legislation

Of course, this is not to say that the chances of employment-related legislation being enacted are nil. If the political winds blow in just the right way, there is a possibility that one or some of the following bills could be enacted into law.

COVID-19/Economic Relief. As cases of COVID-19 continue to surge and state governments consider reinstituting more lockdown restrictions, there will be continued pressure on Congress to pass an economic stimulus package. Republicans and Democrats are in agreement about the need for funding to combat the virus (e.g., money for vaccines, testing, etc.), assist schools and childcare providers, and provide for a certain amount of expanded unemployment insurance. Like everything else in Congress, however, the devil is in the details regarding particular issues. More polarizing are the Republicans’ demand for liability protections from COVID-19–related lawsuits, as well as the Democrats’ demand for language requiring the Occupational Safety and Health Administration (OSHA) to develop a COVID-19–specific emergency temporary standard. It is unclear whether either side is willing to compromise on these issues.

Pregnancy Accommodation. The proposed Pregnant Workers Fairness Act (H.R. 2694) would clarify protections for pregnant workers under federal discrimination laws and would require employers to provide reasonable accommodation—such as more frequent restroom or water breaks—to those employees. The bill passed the House of Representatives in September 2020 by a vote of 329–73 (including 103 Republicans) and enjoys the support of the business community.

Paid Leave. The political debate surrounding federal paid family/sick leave legislation has evolved dramatically over the last several years. While Democrats have long supported such legislation, Republicans have only recently started to come on board with the concept (though they still have concerns about cost, scope, the need for preemption, etc.). Three recent developments have pushed the debate forward: (1) the increasing patchwork of state and local paid leave law requirements, (2) the new paid family leave benefit for federal government employees beginning in 2021, and (3) the paid family and sick leave provisions of the Families First Coronavirus Response Act (FFCRA) that provided a glimpse of a national requirement. Legislation in 2021 will remain a challenge, but the parties are inching—perhaps incrementally—closer.

Multiemployer Pension Fix. It is getting harder and harder for legislators to keep kicking the can down the road with respect to the multiemployer pension crisis. Accordingly, there is some bipartisanship on this matter in that there is recognition by both parties of the problem. Some combination of premium increases and loans is the compromise position. There could be some action on this issue during the lame-duck session of Congress following the elections, but it could also slip to 2021.

Immigration. On July 10, 2019, the House of Representatives passed the Fairness for High-Skilled Immigrants Act of 2019 (H.R. 1044) by an overwhelming vote of 365–65. The bill would eliminate the 7 percent per-country cap for employment-based immigrant visas. Proponents of the bill have so far been unsuccessful in passing the bill in the Senate via unanimous consent.

B. Employment-Related Activity in the U.S. House of Representatives

Though their majority will be slim, House Democrats will likely reintroduce and seek to advance multiple employment-related bills in 2021. In response, Republicans and the business community will try to peel off a number of Democrats to spoil any potential floor votes. Expect action on the following issues:

COVID-19/Economic Relief. If negotiations break down on a bipartisan economic stimulus, Democrats in the House will likely proceed on their own and move on the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which passed the House of Representatives twice in 2020. Among other provisions, the HEROES Act would:

  • extend Pandemic Unemployment Assistance (for those workers who do not traditionally qualify for unemployment insurance (UI), such as independent contractors); Pandemic Extended Unemployment Compensation (providing an additional 13 weeks of benefits); and the Federal Pandemic Unemployment Compensation (FPUC) program, which provides displaced workers with $600 per week on top of their weekly UI benefits;
  • require OSHA to issue an emergency temporary standard for certain at-risk industries; and
  • extend the FFCRA emergency family and sick leave provisions for the remainder of 2021 and apply them to all employers, regardless of size.

Protecting the Right to Organize (Pro) Act. The Protecting the Right to Organize Act passed the House of Representatives in early 2020. It will be the top labor policy priority for congressional Democrats. The bill would:

  • codify Browning-Ferris Industries (joint employer);
  • codify Specialty Healthcare (gerrymandered units);
  • codify Purple Communications (email access);
  • codify the 2014 “ambush” election rules;
  • codify the 2016 “persuader regulation”;
  • prohibit right-to-work laws;
  • provide for “stealth” card check;
  • codify California’s controversial AB 5 on independent contractors into the National Labor Relations Act (NLRA);
  • provide a private cause of action for unfair labor practices (ULPs);
  • restore and codify the Board’s failed “notice posting” requirement;
  • allow for new civil penalties, including liquidated damages;
  • require binding arbitration for first contracts;
  • overturn the Supreme Court of the United States’ decision in Epic Systems, effectively prohibiting employment arbitration agreements;
  • prohibit employers from permanently replacing strikers; and
  • allow for secondary boycotts.

Worker Flexibility and Small Business Protection Act. Introduced in Congress in September 2020, this bill has not yet gone through the legislative vetting that the PRO Act has. But the bill could quickly draw the attention of congressional Democrats, as it dramatically amends federal employment laws, with a particular focus on independent contractors and temporary workers. The bill would:

  • codify California’s “ABC test” for independent contractors as part of most federal labor and employment laws;
  • greatly expand joint-employer tests throughout labor and employment laws, and extend liability to certain owners, officers, and shareholders;
  • create a “standalone violation” for incorrectly classifying a worker as an independent contractor, rather than an employee;
  • set unique wage and hour standards for certain “transportation and network dispatching workers”;
  • require temporary employees to be paid the same as “direct” employees and require that temporary employees be converted to “direct” employees after one year of service;
  • amend the Fair Labor Standards Act (FLSA) to include a “private attorneys general” provision;
  • require an employer with 100 or more employees to file with the U.S. Department of Labor (DOL) a “supply chain responsibility plan” describing its processes for ensuring that its suppliers and vendors do not violate labor and employment laws in the United States and abroad; and
  • require an employer to publicly post on its website and main entryways its labor and employment law compliance record and “rating” over the last three years, including through the use of emojis.

Paycheck Fairness Act. Among other provisions, the Paycheck Fairness Act would amend the Equal Pay Act of 1963 by replacing the “factor other than sex” defense with a “bona fide factor” defense that must be “job-related” and “consistent with business necessity”; would provide for uncapped compensatory and punitive damages; would require the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) to develop mechanisms for the collection of employee compensation data from employers; and would enact prohibitions on the use of, or inquiry into, applicants’ pay history.

Immigration. The last time Democrats controlled the Senate they passed bipartisan comprehensive immigration reform. Biden has vowed to take another crack at this and promises that he will “commit significant political capital to finally deliver legislative immigration reform.” It is also possible that Democrats will focus on targeted relief measures for Dreamers and/or temporary protected status (TPS) recipients.

Raising the Minimum Wage. The House passed the Raise the Wage Act in 2019. The bill would gradually increase the federal minimum wage over a six-year period to $15 per hour. The bill also indexes the minimum wage to inflation and would phase out the separate minimum wage for tipped employees. While a long shot—especially if the COVID-19 pandemic continues and the economy remains on shaky grounds—it is possible that Senate Republicans would be willing to cut a deal if the terms and legislative package were right.

III. U.S. Department of Labor

A. Who Will Be in Charge?

There is a saying in Washington, D.C., that “personnel is policy.” Whomever Biden nominates to run the various labor and employment related agencies will have an enormous influence on federal labor and employment policy. Democrats may have learned a lesson from former president Obama’s appointment of Congresswoman Hilda Solis to helm the DOL during his first term. Solis did not come into the job with much labor and employment experience and did not advance Democrats’ agenda as quickly as they would have liked. Indeed, the DOL’s regulatory machine really did not hit its stride until former president Obama’s second term, when Thomas Perez became secretary of labor. Thus, look for Biden to appoint a secretary of labor who is aggressive, savvy, and experienced.

The process of taking over functions at the DOL has already begun. Biden announced his “agency review teams” to begin evaluating agency operations in anticipation of the shift in executive power in January 2021. The labor review team (overseeing the DOL, the National Labor Relations Board, and the EEOC, among other agencies) includes many familiar faces from the Obama administration. Individuals such as Jenny Yang (former EEOC chair), Seth Harris (former DOL deputy secretary and acting secretary of labor), and Patricia Smith (former DOL solicitor) will likely join others from organized labor, academia, and progressive think tanks in beginning the initial overhaul of the DOL. This group will likely influence the selection of Biden’s DOL nominees and may even be candidates themselves.

Expect the DOL of the Biden administration to be aggressive from the start, in terms of both regulatory actions and enforcement proceedings. Clawing back some of the initiatives of the DOL of the Trump administration will, of course, be a priority. But beyond that, expect this DOL to go on the offensive with an agenda that is even more progressive than that of the Obama administration’s DOL.

B. Occupational Safety and Health Administration

The ongoing COVID-19 pandemic has thrust OSHA into the spotlight, and workplace safety will likely be the priority of the Biden DOL. First and foremost, this likely means quickly putting forward a nominee to be assistant secretary of labor for occupational safety and health. Additionally, expect OSHA to begin developing a COVID-19–specific emergency temporary standard right away. Enforcement is likely to tick up, too, especially with regard to COVID-19–related complaints. Finally, while it was not abandoned entirely by the current OSHA, a Biden OSHA can be expected to return to a much more aggressive “regulation by shaming” campaign through the use of conclusory press releases.

C. Wage and Hour Division

In addition to an aggressive enforcement strategy, the Wage and Hour Division (WHD) of the DOL will undoubtedly pursue a robust regulatory agenda that could potentially be described as “repeal and replace.” The agenda will likely include the following initiatives:

  • Joint Employer. The Trump DOL’s joint-employer regulation under the Fair Labor Standards Act has been enjoined by a federal court. Whatever the legal status of the regulation, a Biden DOL is expected to “repeal and replace” the rule with a broader and more amorphous joint-employer standard.
  • Independent Contractor. Similarly, if the Trump administration finalizes an independent contractor regulation, it will quickly be targeted for reversal. Senate Democrats may try to repeal it by using the Congressional Review Act (though they are unlikely to have the votes and doing so would severely limit Democrats’ ability to promulgate their own version of an independent contractor regulation). If Congress does not act, the incoming administration will rescind the regulation via rulemaking. The Biden DOL may then proceed to issue its own version of an independent contractor standard, but the controversy surrounding AB 5 in California may give them pause.
  • Overtime. A federal court ruling in late 2016 blocked the enactment of the Obama administration’s overtime rule. Although the Trump DOL finalized its own overtime rule in September 2019 that increased the salary basis threshold, the level probably will not satisfy a Biden DOL, which most likely will want it to be at $47,000 or higher and may also look to make changes to the duties test.
  • Opinion Letters. Opinion letters offer a way for stakeholders to seek assistance from the DOL when confronted with difficult questions as to the application of federal wage and hour law. In 2010, the Obama administration ended the opinion letter process in favor of sweeping Administrator’s Interpretations. The opinion letter program was reinstated in the current administration, but may be jettisoned in a Biden DOL.
  • PAID Program. A Biden WHD can be expected to do away with the Payroll Audit Independent Determination (PAID) program that encourages employers to self-report wage and hour violations.

D. Office of Federal Contract Compliance Programs

In 2019, OFCCP hauled in a record-breaking $40 million plus in legal settlements with federal contractors. That figure does not tell the whole story of the OFCCP in the Trump administration, but is indicative of an aggressive enforcement philosophy that carried over from the Obama administration (despite welcome efforts towards compliance assistance and transparency). Expect a Biden OFCCP to push this enforcement posture even further, particularly when it comes to alleged compensation discrimination (though whoever is running OFCCP in 2021 will have to work around a 2020 high profile ruling against OFCCP that calls into question the agency’s statistical analyses).

Additionally, OFCCP will likely pursue the following changes:

  • Roll back policies and processes established pursuant to President Trump’s Executive Order on Combating Race and Sex Stereotyping.
  • Implement affirmative diversity and inclusion obligations pursuant to a potential executive order.
  • Rescind any regulation relating to religious organizations with federal contracts.
  • Restart the 2014 compensation data collection tool proposal. This regulation never got off the ground and was overtaken by the 2016 wage and hour data collection changes to the EEO-1 form. In part because the EEOC will have a Republican majority through at least mid-2022, OFCCP may seek to revive this proposal.

IV. National Labor Relations Board

Republicans will maintain a majority at the NLRB at least into the summer of 2021, though Democratic member Lauren McFerran will assuredly be named chair in early 2021. She could look to slow down the issuance of case decisions, and especially rulemakings, until reinforcements arrive. Of course, if Republicans retain a majority in the Senate, Majority Leader Mitch McConnell will have a say in who gets confirmed to the Board and when.

Once Democrats gain a majority on the Board, it will come as no surprise that they may seek to roll back current Board policies and return to policies that favor unions. Assuming that Congress fails to enact the PRO Act, a Board with Democrats in the majority may attempt to enact the legislation administratively, where possible. Other action items for a Democrat-controlled NLRB include:

  • Joint Employer. In February 2020, the Board issued a final rule that reestablished the direct and immediate control standard that existed for decades prior to the 2015 Browning-Ferris Industries (BFI) A new Board can be expected to undo this rule and issue its own rule that cements BFI via regulation.
  • Election Procedures. A new Board may look to restore all elements of the “ambush” election rules that went into effect in 2015 but which were amended in 2019.
  • Employee Choice Regulations. A new Board will reverse 2020 final rule changes to the Board’s standards on blocking charges, voluntary recognition, and Section 9(a) bargaining relationships in the construction industry.
  • Other Changes. Over time, expect a Board dominated by Democrats to address the following issues via case law or regulation:
    • Fractured bargaining units (Specialty Healthcare)
    • Employee use of email (Purple Communications)
    • Independent contractors
    • Graduate students
    • Contract bar
    • Secondary activity
    • Employee discipline
    • Dues checkoff
    • Arbitration deferral

V. Equal Employment Opportunity Commission

Recent appointments to the EEOC will give the Commission a Republican majority through at least mid-2022. Further, Republican-appointed general counsel, Sharon Fast Gustafson, will remain in office until 2023. But as with his likely selection of an NLRB chair, Biden can be expected to name a Democratic commissioner (likely Charlotte Burrows) as the chair. In this scenario, Burrows will control the agenda, meaning that the EEOC will try to finalize a conciliation regulation prior to January 20, 2021. Further, the odd dynamic of having a chair who is in the minority will undoubtedly influence, and likely delay, the Commission’s position on a pending National Academy of Sciences analysis of EEO-1 pay and hours worked data, as well as the development of a rule on employer-sponsored wellness programs.

Of course, in Democratic hands, the Commission can be expected to explore ways to collect compensation data from employers. Additionally, a Commission with Democrats in the majority could revoke a September 2020 opinion letter clarifying EEOC’s interpretation and enforcement of “pattern or practice” litigation under § 707(a) of Title VII of the Civil Rights Act of 1964. The letter confirms that when pursuing § 707 pattern-or-practice cases, the EEOC must follow the same administrative prerequisites as when pursuing § 706 cases on behalf of individual employees, such as the requirement of an underlying charge of discrimination and engaging in conciliation.

VI. Immigration

Chances are that a Biden presidency will be friendlier to business immigration needs than the current administration, but this does not mean that there won’t be any challenges for employers that supplement their work forces with high-skilled foreign labor. Biden has a populist/protectionist streak and his campaign website states the following:

Biden will work with Congress to first reform temporary visas to establish a wage-based allocation process and establish enforcement mechanisms to ensure they are aligned with the labor market and not used to undermine wages. Then, Biden will support expanding the number of high-skilled visas and eliminating the limits on employment-based visas by country, which create unacceptably long backlogs.

Thus, employers should not expect all scrutiny of the high-skilled nonimmigrant visa programs to disappear with a Biden victory. That being said, expect a Biden administration to:

  • restore DACA and TPS programs;
  • reaffirm the rule allowing employment authorization for certain H-4 spouses of H-1B nonimmigrants;
  • rescind (or not defend) the U.S. Department of Homeland Security’s rule on Strengthening the H-1B Nonimmigrant Visa Classification Program and accompanying DOL wage rule;
  • rescind the Inadmissibility on Public Charge Grounds final rule;
  • evaluate and possibly rescind current travel bans, although the COVID-19 travel bans may take time to rescind as the situation evolves;
  • rescind the proposed “duration of status” rule for nonimmigrant academic students, exchange visitors, and representatives of foreign information media; and
  • rescind the proposed rule on the collection and use of biometric data in the enforcement and administration of immigration laws.
© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more articles on labor law, visit the National Law Review Labor & Employment section.

Maintaining Workplace Civility in an Era of Heightened Divide

Do as adversaries do in law, strive mightily, but eat and drink as friends.

William Shakespeare, The Taming of the Shrew, Act I, sc. 2

In the aftermath of the historic and divisive election, many of us welcome an end to the besiegement of ads, media commentaries, Facebook and Twitter postings, etc. that are not only uncivil, but in many cases just plain nasty.

The political climate of brinkmanship, rudeness, and lack of cooperation (let alone collaboration) appears to be increasingly reflected in the workplace. Collectively these behaviors are called “incivility,” and have become so prevalent that many scholarly studies have been conducted on the topic. Google “incivility in the workplace” or visit the Society for Human Resources Management (SHRM) website and you’ll get the idea.

What is “civil” and “uncivil” behavior in the workplace, and what are the legal and other implications of uncivil behavior?

“Civility” is a collection of positive behaviors that promote courtesy and respect. The word has its origins in the Latin word “civis,” which in Latin means citizen. Keith Bybee, the author of How Civility Works, put it this way in a 2019 NPR interview: “Civility is the baseline of respect that we owe one another in public life.”

To paraphrase the old Irish proverb by substituting “civility” for “diplomacy”, “Civility is telling someone to go to hell in such a way that they will look forward to the trip.”

On the flipside, what is “incivility”? One study describes it as “a low intensity deviant behavior with ambiguous intent to harm” (Anderson and Pearson, 1999). Other studies define it more thoroughly as bad or rude behavior, with diminished use of basic courtesies such as “please” and “thank you,” abrupt and curt language, especially when using technological communication, a lack of respect for leaders and colleagues, with behaviors including belittling, interrupting or ignoring others, spreading rumors or gossip, and sending “nasty grams” to co-workers. (Akella and Johnson, 2018, citing many other studies.)

Many employees appear to be under the impression that they have an absolute First Amendment right to say or send whatever they want to in the workplace. This is simply not true, especially in the private sector. Employers have the right and under some circumstances the duty to expect their employees to act toward one another with basic respect and courtesy. Unfortunately, email and social media have removed many of the “filters” that were previously in place in terms of the lack of ability to make an immediate and often not thought-out response, and that unfortunately has bled over to in-person communications. There are now unlimited opportunities for knee-jerk reactions that are not thought through before hitting the SEND button.

SHRM and other reputable sources report that numerous studies show that incivility in the workplace leads to lower production, higher turnover, lower profitability, poorer customer service and decreased morale.

So how might employers rein in on such behavior in the interest of maintaining a desirable workplace culture and mitigating liability? Some employers have addressed the problem of incivility by instituting Codes of Conduct designed to advise employees what is expected of them in terms of their interactions with one another. Of course, such Codes are not worth the space they take up on a network unless they are accompanied by commitment from leadership to communicate, train and enforce the Codes, and truly reflect the mores and values of the organization. Ideally, supervisors, who after all are responsible for enforcing Codes of Conduct on the “front lines”, should be involved in their creation and in all cases should be thoroughly trained regarding their contents and what to do in the event of a violation.

Codes of Conduct sometimes include other matters such as conflict of interest, gifts and gratuities, and use of Company resource policies, and are generally enforced through the Company’s disciplinary procedures.

From a legal standpoint, incivility is not generally regarded as in and of itself constituting illegal harassment or illegal conduct under discrimination laws, although it could and should be regarded as behavior which could easily escalate to that level if unchecked.

The coming days and weeks will tell us a lot about how people handle the inevitable fallout from the election, and of course a lot of that conversation will occur at the workplace. It’s important, even vital, to workplace harmony and even more important, to the fiber of who we are as a civilized nation to have those conversations in an atmosphere of mutual respect.

© 2020 Davis|Kuelthau, s.c. All Rights Reserved
For more articles on the workplace, visit the National Law Review Labor & Employment

How to Maintain a Positive Company Culture During COVID-19

Culture eats strategy for breakfast, or so we’ve been told by Mr. Drucker and others.

Coincidentally, I wholeheartedly agree.  So, how does leadership maintain, let alone improve, its company culture in the face of the first pandemic of its size in the last one-hundred-plus years?

Of course, it will not be a one-size-fits-all approach, but the following are three suggestions I have seen work recently for several of our clients.

Suggestion 1 – Maintain Visible and Engaged Company Leadership

“I always feel like somebody’s watching me” – Rockwell 1984

Admit it, this song is now stuck in your head (you’re welcome!).  It seems that employees are paying closer attention to company management than ever before.  How you communicate, your style of communication, transparency, consistency, accessibility, and responsiveness (even if only remotely) – it all matters.  What matters most in my humble opinion, however, is that you deliver all information in a timely and authentic way.  Being prompt in sharing good or bad news will be especially appreciated now.  And if you have more than one bad piece of news to share, share it all at once, and now.  Also, be yourself.  By way of example, if you don’t normally try to establish witty repartee, now is not the time to try.  Your employees should already know who you are if you have done your job.  Now is not the time to try and introduce them to someone “new” (even with the best of intentions), but instead is a great time for stability and to remind them why they have hopefully bought into and trusted your leadership style so far.

Suggestion 2 – Provide Opportunities to Interact and Contribute as Individuals

During the pandemic, even those more introverted employees have felt isolated.  A feeling of company connection goes a long way towards building loyalty, teamwork, and happy employees.  And even though we are all interacting with our customers and clients more virtually now, those folks get it when your employees genuinely enjoy each other’s company.  So, what are we to do when we have been advised by the CDC to limit our group gatherings, and stand six feet apart, wearing masks – and many of our workforces are still working one hundred percent remotely from home?

Some of our clients have virtual Zoom lunches or happy hours.  Some have encouraged employees to start book clubs or movie clubs and discuss the materials via Zoom.  But ultimately, it is imperative that the tenured employees who get the company culture in our various geographic locations are empowered to lead by example, and given the freedom to illustrate the company’s culture in the way they believe will be most effective.

Suggestion 3 – Fight Against “Checking the Box”/Staleness

This one is tricky.  Most of our clients spent a fair amount of time earlier this year coming up with ways to effectively address Suggestion 1 and Suggestion 2.  But over time, there is definitely a routine, we get comfortable, and inertia sets in.  Don’t be afraid to shake things up!  While we all have some level of Zoom fatigue now, there is no magic number to try and hit per week or month.  Likewise, if every company management communication looks identical background and content-wise (it’s now 10:15 and time for our HR Director to present x, y, or z) and is so predictable that each communication could have just been batch recorded and sent out, things should be adjusted.

Ultimately, we will get through this, and while mention of the number 2020 may produce a zeitgeist-like gag reflex for most of us for a long time to come, for now, work-wise all we have is your own company’s culture and co-workers.  Protect it and each other.

© 2020 Ward and Smith, P.A.. All Rights Reserved.
For more articles on company culture, visit the National Law Review Labor & Employment section.

Law Firm Marketing Professionals Face High Levels of Stress, Pandemic Pressures, and Lack of Respect: Report

Law firm marketing and business development staff are stressed-out and the COVID-19 pandemic has only ratcheted up the pressure, the 2020 Legal Marketing Mental Wellness Report published by fSquared Marketing, a consultancy that specializes in working with law firms, shows.

In a survey of 400+ law firm marketing and business professionals, 96% agreed there is significant stress in the legal marketing field. 71% reported often feeling overwhelmed at work and 79% said that their work-related stress had increased during the pandemic.

“Legal marketers have seen their workloads increase this year, as they maintain firm communications and respond to the challenges of this crisis,” observes Lynn Foley, CEO of fSquared Marketing. “They are working hard to ensure their firms are providing timely updates, maintaining strong relationships with clients, and adapting to remote working and new communication channels such as webinar presentations and virtual conferences. At the same time, many professionals have had the threat of layoffs hanging over their heads or seen their marketing budgets slashed and projects put on hold.”

“During this time of COVID-19, they furloughed my co-coordinator. The amount of work in the department has not changed so I have taken on all her work as well.” one respondent to the survey said. “…They also reduced my pay. I am happy I still have a job, but I feel like my work product has suffered and my stress level has skyrocketed.”

Legal Marketing is a demanding profession, even in less difficult times. In 2019, fSquared Marketing ran a similar survey that illuminated many of the issues which re-emerged in the 2020 report including overwork, a lack of respect and a lack of understanding of the marketer’s role by lawyers.

“The 2020 report builds on our team’s previous research,” says Foley. “We expanded the survey this year and– in partnership with the Legal Marketing Association (LMA)—we were able to more than double the number of responses collected.”

Stress is Impacting the Health and Wellness of Staff

It’s widely recognized that there is a mental health crisis in the legal industry. A landmark 2016 study by the ABA and the Hazelden Betty Ford Foundation found that 36% of lawyers qualified as problem drinkers and 28% report mild or higher depression symptoms. Through initiatives such as The National Task Force on Lawyer Well-Being and ABA Commission on Lawyer Assistance Programs and increased media attention, the industry is starting to take this issue seriously and take steps to improve itself.

Yet law firm professionals have often been overlooked. As this 2020 report makes clear, marketing and business professionals at law firms are also under considerable levels of stress. Nearly 80% of respondents said that their stress, on a scale of 1-10, was a 7 or higher. And 67% said that stress was negatively impacting their ability to concentrate on the task at hand. 63% of respondents said that stress from work was affecting the quality of their sleep and 48% said that stress from work gave them psychosomatic symptoms such as headaches or stomach pain.

“Overwork is part of the problem,” notes Foley, “but this report also reveals compounding factors, such as a lack of understanding of the marketer’s role and, in too many cases, a lack of respect from lawyers.”

Marketers Dismissed as “Non-Lawyers” But Still Essential

Many respondents pointed to a divide between the lawyers and law firm professionals, often dismissively labelled as “non-lawyers”, as a source of stress. 67% of respondents said that lawyers do not understand their role or the work they perform. 40% agreed with the statement: “There is a lack of respect for me/my role by the lawyers”.

“Most of the stress I experience comes from feeling like the lawyers won’t let/don’t trust me to do my job,” said one respondent.

Another respondent said: “I don’t see how lawyers who don’t even value my contribution to the firm would ever value my mental health.”

At the same time, Marketing professionals are well aware of the value they bring to the table: 93% felt that they “have an important role to play at their firm”.

Legal Marketing Might Be More Stressful Than Marketing in Other Industries

Of those respondents who had previously held marketing positions in other industries, 72% felt that marketing in legal was more stressful.

Marketers who worked in-house at a law firm were more likely to report feeling overwhelmed and disrespected than external marketing consultants with law firm clients.  Not surprisingly, in-house marketers also reported lower levels of job satisfaction than their external counterparts.

Taken together, this indicates that there are factors endemic to law firms that increase workplace stress. Several respondents pointed to a culture of perfection, the rigidly hierarchical nature of most firms, and the billable-hour model as culprits. “This job is custom-built for stress,” noted one respondent.

“We work at the request of lawyers, who don’t think about marketing or business development during the work day. Therefore, they contact us after the work day.  So by definition, our work needs to be completed after hours and on weekends.  Holidays are nonexistent. PTO is nonexistent. All that exists is a gigantic, gaping maw of legal work that needs to be done.  There is no escape.”

Skills Training the Most Requested Type of Law Firm Support

Access to training was the number one resource that legal marketers thought would help them to alleviate stress. 79% of respondents said that access to marketing/business development/technical training would help them to limit their stress.

Training was seen as more useful for managing stress than access to mental health professionals and mindfulness coaching. Access to external marketing resources to provide assistance on a project basis was seen as the second most useful form of law firm support for mental wellness and stress management.

“Marketing is a fast-changing field and it can be challenging to stay on top of new tech, changing client expectations, and methods,” notes Foley. “Law firms that provide their professionals with regular access to high-quality training will help their marketers to manage the pressures of the job while also empowering them to deliver meaningful results for their firm.”

Towards a Better Model

Research in workplace psychology has consistently found that employees perform to their highest potential when they feel respected, challenged but not overwhelmed, and valued for their contributions.

COVID-19 will continue to send shockwaves through the economy at large with implications for the legal market. Law firms that foster resilient, supportive cultures have an advantage in weathering downturns and periods of turmoil and emerging from the other side of the pandemic in a dominant market position.

“I know from firsthand experience how stressful it can be to work in-house at a law firm,” notes Foley. “This is always going to be a demanding profession within a high-pressure industry, but incivility and burnout benefit no one. This report shows how widespread these issues are in our industry. But they aren’t universal, and that is a cause for hope. Many law firms have fostered cultures of work-life balance and mutual respect. It’s possible and demonstrably profitable to ensure that law firm professionals feel understood, included, and valued for their contributions.”

© Copyright 2020 fSquared Marketing
For more articles on the legal industry, visit the National Law Review Law Office Management section.

A Biden Board at the NLRB: What to Expect and When

This past Labor Day, President-elect Joe Biden told a group of union supporters that he would be “the strongest labor president you have ever had.” Just how true those words will be hinges on what party controls the Senate after the dust settles on this election season.

As part of his labor goals, Biden has championed the PRO Act, a substantive and drastically pro-union rewrite of the 85-year-old National Labor Relations Act that was passed by the House in early 2020. The PRO Act would codify the ambush election rule and micro-unit policy, neuter employers’ ability to mount counter-campaigns to union organizing attempts, and weaken right-to-work laws that protect employee free choice. The ambitious legislation would also permit the NLRB to issue heavy monetary penalties on employers for violating the NLRA and would more strictly require bargaining after an initial certification of a new union.

The legislation would be destructive to companies, but it seems unlikely to become law in today’s political landscape. Indeed, a less ambitious pro-labor bill, the Employee Free Choice Act, failed to pass a Democrat-controlled Congress in 2009.

But even if the PRO Act does not come to fruition, one thing is clear: there will be changes. Employers have benefitted greatly from the pro-employer NLRB over the past four years. We have seen a flurry of positive changes including wins on issues like joint employers, micro-units, abolishing the ambush election rule, and making it easier for employers to make unilateral changes in the workplace.

When and how change might occur under President-elect Biden will largely depend on when he is able to gain control of the NLRB.

The NLRB is currently composed of three Republican members and one Democrat, with one vacant seat. Assuming President-elect Biden is able to fill the vacant seat, his first opportunity to flip control of the Board in his favor will come in August 2021, when Trump appointee Bill Emanuel’s seat expires. NLRB General Counsel Peter Robb’s term expires in November 2021. Even then, control depends on the Senate confirming both the new general counsel and Board member positions.

In short, we could expect there to be pro-union changes at the NLRB beginning in the fall or winter of 2021. This timeline is similar to the beginning of the Trump administration, when we saw the biggest flurry of pro-employer rulings come in December 2017 after Republicans gained control of the NLRB. Once Biden gains control, we might see a strategy similar to that employed by the Trump and Obama Boards. A mix of precedent-overturning NLRB decisions and rulemaking could be in store for employers.

© 2020 BARNES & THORNBURG LLP
For more articles on the NLRB, visit the National Law Review Labor & Employment section.

What Happens to an Employee’s Seniority after an Asset Sale?

In the recent decision of Manthadi v Asco Manufacturing, 2020 ONCA 485 (“Manthadi”), the Ontario Court of Appeal has clarified that an employee’s past service with their former employer does not automatically transfer to a successor employer for the purposes of calculating their common law reasonable notice entitlements. Instead, in order to fashion an appropriate notice period, the courts will consider the employee’s prior service broadly as a form of “experience” that was to the benefit of the purchaser/successor employer.

Background

In 1981, Ms. Manthadi was hired as a welder for an Ontario company. Her employment remained secure until the end of 2017, when the company was purchased in an asset sale by ASCO Manufacturing Limited (“ASCO”). After the sale, Ms. Manthadi continued to work similar hours at a similar rate of pay for ASCO until December 13, 2017, when she was laid off and never recalled.

Following the termination of her employment, Ms. Manthadi brought a successful summary judgment motion alleging wrongful dismissal. The motion judge found the common law and ESA to mirror one another with respect to how they treat an employee’s continuous employment. As such, the motion judge found that for the purposes of calculating her common law reasonable notice entitlements, Ms. Manthadi was deemed to be continuously employed by ASCO since 1981. On this basis, the motion judge found that the common law reasonable notice period for Ms. Manthadi was 20 months.

Court of Appeal

On appeal, the Ontario Court of Appeal overruled the summary judgment motion on a few grounds, including the improper use of a summary judgment motion for determining the matter. However, the Court of Appeal also took the opportunity to review and restate the law in terms of an employee’s right to reasonable notice from a purchaser of an ongoing business.

The Court of Appeal began by stating that “a sharp distinction must be drawn between termination of employment by a successor employer under the ESA and under the common law” (at para 48). Whereas notice under the ESA provided that Ms. Manthadi would be continuously employed, the common law was “equally clear that such employees are terminated (by constructive dismissal) when their employer sells the business and there is a change in the identity of the employer” (at para 48).

This distinction between the ESA and common law raises problems for long-term employees. Specifically, the duty to mitigate requires wrongfully dismissed employees to minimize their damages by taking up new work. In the context of a sale of a business, long-term employees are usually offered identical employment with the purchasing company. Failure to accept this employment will likely be considered a failure to mitigate, potentially ending any claim. Accepting the employment, however, means that any claim of wrongful or constructive dismissal will likely be mitigated out of existence.

The Court of Appeal recognized this problem for long-term employees, noting at paragraph 53:

“Thus, long-term employees, who are employed by the purchaser of their employer’s business, have little prospect of obtaining damages for the termination of their employment. Damages aside, people need jobs. Employees terminated by the sale of a business often have no realistic option other than to accept the offer of a new contract of employment with the purchaser if such is offered. If they are subsequently terminated by the purchaser, the new start date of their term of service weighs in favour of a shorter notice period than had the business not been sold.”

The resolution, says the Court of Appeal, involves reliance on the factors pronounced in the time-tested case of Bardal v The Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC). Better known as the Bardal factors, the Court relies on such factors to determine reasonable notice at common law. In considering the Bardal factors, the Court accepted that the “experience” of an employee (and the benefit that such experience had for the purchaser) was a relevant factor that the Court could rely upon in fashioning the appropriate reasonable notice period where there had been a sale of a business and successive employment.

Implications from Manthadi

Prior to this decision, long-term employees seeking common law notice were usually given the benefit of having prior years of service recognized despite any sale of the business. This is no longer to be presumed. Rather, for calculating reasonable notice at common law, prior years of service with a former employer are translated into “experience.” While the Court of Appeal in Manthadi considered this to provide greater flexibility, it will almost certainly raise areas of contention for similar wrongful dismissal disputes going forward.

It remains to be seen whether trading off “years of service” for “experience” will decrease (or in certain cases increase) the notice entitlements for long-term employees being terminated after an asset sale. If notice entitlements do decrease, then purchasers inheriting a workforce may be exposed to less liability in the event of a wrongful dismissal claim.

© 2020 Miller, Canfield, Paddock and Stone PLC
For more articles on employee asset sales, visit the National Law Review Labor & Employment section.