Labor & Employment Archives - Page 62 of 154

It’s Not Just A Game – Addressing Employment Law Issues in Esports

The vast video gaming ecosystem is comprised of a wide range of stakeholders, including game publishers, professional and amateur teams, leagues, tournament and event organizers, broadcasters and other media distributors, sponsors and advertisers. And, last but not least (as this is a labor and employment law blog), there are the skilled players who are central to the growth of competitive video gaming known as esports.

While professional leagues, competitions, and teams of players form around various game titles such as Overwatch, League of Legends, Call of Duty, and Fortnite, legal risks often rise in lockstep with commercial growth and opportunity. Those legal risks can become heightened for nascent businesses that myopically focus on revenue and growth, while giving little attention to the operational aspects of how that business will grow. Indeed, the internet landscape is littered with warnings to industry stakeholders about various legal issues they should – but may not – be considering as they endeavor to grow their businesses and operations. These issues include, for example, data privacy and the use and protection of intellectual property. Invariably, labor-management relations and other workplace and employment-related issues are found at or near the top of every list.

As team operators hire players to compete in leagues and other competitions, they are submitting themselves – perhaps unwittingly – to a panoply of labor and employment laws and regulations that may govern the team-player relationship. In a prior post, we addressed the culture of gaming and the challenges of conforming the behavior of players and other team personnel to workplace laws concerning sexual harassment and other forms of prohibited employment discrimination.

Recently, workplace issues in esports were back in the spotlight when one of the world’s most recognized professional Fortnite players, Turner Tenney (known as “Tfue”), filed a lawsuit against his esports team, FaZe Clan, in a California court. In his lawsuit, Tfue seeks to undo his allegedly oppressive three-year contract with the team and asserts that the team unlawfully deprived him of business opportunities and failed to pay him his share of team sponsorship revenues. Central to the case are the personal branding opportunities that Tfue claims to be unfairly missing and are somewhat unique to professional gamers, who, outside of competitive gaming activities, spend hours connecting with and creating media content for millions of fans and followers through internet streaming platforms like YouTube and Twitch.

While the merits of the Tfue-FaZe Clan case are uncertain and difficult to assess, it does highlight the varied and complex legal issues bound up in the team-player relationship. Those issues are critically driven by whether the team does (or should) engage the player as an independent contractor or as an employee. Improperly classifying a player as an independent contractor can trigger significant legal issues and problems for a team relating to income and employment tax withholding, wage and hour laws, workers’ compensation and other benefits, media and intellectual property rights, unionization and unfair labor practices, and control of player business and sponsorship activities and other conduct.

The worker classification question is only the beginning. Additional concerns relating to the engagement of players by teams include the impact of child labor laws as to players who are under the age of 18 (and there are many such players in professional gaming), as well as cross-border considerations, including immigration laws and the procurement of visas for foreign players competing in the United States and for American players competing abroad.

Irrespective of its merits, the Tfue-FaZe Clan case should serve as a wake-up call for esports and the larger video gaming industry. It is a reminder that commercial and revenue growth is best built on the creation – not at the expense – of a proper operational and legal business foundation. Carefully constructing or reassessing player contractual relationships should be part of that proper foundation. To do that requires input from sophisticated legal counsel and business advisors, preferably before the potential storm clouds form and unleash their fury. As President John F. Kennedy once wisely said, “The time to repair the roof is when the sun is shining.”

This post was written by Jonathan L. Israel of Foley & Lardner LLP.

Read more on Labor and employment issues on our employment type of law page.

State Attorney Generals Brace for Battle with Department of Labor Over Newly Proposed Federal Overtime Salary Exemption Threshold

After the March 7, 2019 unveiling by the U.S. Department of Labor (“DOL”) of its long- awaited proposed rule, which would make more workers eligible for statutory overtime pay, the attorneys general (“AGs”) of 14 states and the District of Columbia announced on May 21, 2019 that they oppose DOL’s proposed rulemaking. Included among the states opposing DOL’s proposal are New Jersey and New York.

The existing annual salary overtime exemption threshold under the Fair Labor Standards Act (“FLSA”) is $23,600 for full-timers (or $455 per week). Employees who are paid below that salary must be paid overtime if they work more than 40 hours per week. The FLSA salary threshold test has not changed since 2004.

DOL’s newly proposed rule, characterized as an Executive Order 13771 “deregulatory action,” would, among other things, increase the qualifying salary threshold for overtime exemption to $35,308 annually for full-time workers (or $679 per week). In doing so, the rule, if promulgated, would effectively convert an estimated one million workers to hourly wage status and qualify them for time-and-one-half overtime pay for hours they work in excess of 40 in a given workweek.

The newly proposed rule also would clarify the type of compensation (such as payments made for vacations, holidays, illness, or failures to provide sufficient work) which would be excluded from the definition of an employee’s “regular rate” for purposes of calculating whether overtime pay is due, and increase the total annual compensation threshold for “highly compensated employees” (for whom overtime wages generally need not be paid) from $100,000 to $147,414 annually.

The proposed new rule stands in sharp contrast to the final rule promulgated by DOL during the Obama Administration in 2016, which would have raised the annual salary exemption threshold to $47,476 for full-timers (or $913 per week) and require automatic adjustments to the salary threshold standard every three (3) years. However, on November 22, 2016, a federal district court in Texas held that that rule was inconsistent with Congressional intent and issued a nationwide injunction staying its implementation. On October 30, 2017, DOL appealed the district court’s summary judgment decision to the Fifth Circuit Court of Appeals. On November 6, 2017, the appellate court granted the Government’s motion to hold the appeal in abeyance while DOL reexamined the salary threshold test.

The AGs argue that the proposed rule does not go far enough, championing instead the Obama-era 2016 Final Rule, which would have made roughly four million workers newly eligible for overtime pay. In the May 21, 2019 letter signed by each of the AGs, they contend, among other arguments, that the newly proposed rule would be arbitrary and capricious, and therefore unlawful under the federal Administrative Procedure Act, because it would unreasonably institute a markedly lower salary threshold level and improperly eliminate mandated periodic reviews of the salary threshold standard. Meanwhile, Congressional Democrats have announced plans to introduce legislation that would revive the Obama-era salary exemption threshold.

On March 29, 2019, DOL published its newly proposed rule, triggering a 60-day public comment period that expired May 28, 2019. Presumably, DOL will be reviewing the comments it received and publishing its final rule, though the final rule’s promulgation date is uncertain. Given the anticipated political and judicial battles over what the new threshold should be, it is not clear what overtime salary exemption threshold ultimately will emerge.

Takeaways for Employers

Employers should closely monitor administrative, judicial and legislative developments relating to the proposed increase in the salary exemption overtime threshold.
An increase in the threshold is likely, though the amount of the increase and the effective date of same remain uncertain.
Once the threshold is increased, certain employees previously exempt from overtime will be eligible for hourly overtime pay depending on what dollar amount is established as the new salary threshold standard, and employers will be required to maintain time worked records for those newly converted hourly employees.
In anticipation of the change in the threshold amount, employers should begin the process of identifying job classifications that potentially may be impacted by a change in the salary exemption standard.

This post was written by Clifford D. Dawkins, Jr. and David I. Rosen of Sills Cummins & Gross P.C.

Read more news on the DOL Overtime Regulations on the National Law Review’s Employment Law Page.

Colorado Revamps Existing Wage Discrimination Law

On May 22, 2019, Colorado’s Governor Polis signed the Equal Pay for Equal Work Act (the “Act”), which brings significant changes to the existing Wage Equality Regardless of Sex Act. C.R.S. § 8-5-101 et seq. Effective January 1, 2021, the Act will prohibit employers from paying an employee of one sex less than an employee of a different sex for substantially the same work.

Employers will also be required to announce or post all opportunities for promotion to all current employees on the same calendar day, and include the hourly or salary compensation, prior to making a promotion decision. Additionally, employers will be required to keep records of job descriptions and wage rate history for each employee for the duration of employment plus two years after the end of employment.

Note that wage differentials between employees of different sexes who perform substantially similar work are allowed where the employer can demonstrate that the difference in wages is based upon one or more factors, including:

A seniority system;
A merit system;
A system that measures earnings by quantity or quality of production;
The geographic location where the work is performed;
Education, training, or experience to the extent that they are reasonably related to the work in question; or
Travel, if the travel is a regular and necessary condition of the work performed.

Also, the Act will prohibit an employer from:

Seeking the wage rate history of a prospective employee or relying on a prior wage rate of a prospective employee to determine a wage rate;
Discriminating or retaliating against a prospective employee for failing to disclose the employee’s wage rate history;
Discharging or retaliating against an employee for asserting the rights established by the Act;
Prohibiting employees from disclosing their wage rates; and
Requiring an employee to sign a waiver that prohibits an employee from disclosing their wage rate information.

Importantly, the Act will remove the authority of the Colorado Department of Labor and Employment to enforce wage discrimination complaints based on sex and permit aggrieved employees to file a civil action in district court, where a prevailing employee may recover liquidated damages and attorneys’ fees.

Employers may wish to consider auditing their existing pay structures to make sure employees are receiving equal pay for equal work in compliance with the Act and would do well to post all opportunities for promotion to all current employees at the same time. Employers with questions regarding the Act, or pay audits generally, should consult with competent counsel.

This post was written by Gillian McKean Bidgood and Mary E. Kapsak of Polsinelli PC.

Read more state employment news on our labor and employment type of law page.

Colorado Enacts Equal Pay for Equal Work Law, Effective 2021

Colorado Governor Jared Polis signed the Equal Pay for Equal Work Act (Senate Bill 85) into law on May 22. The intent of the new law is to help close the gender pay gap in Colorado and ensure that employees with similar job duties are paid the same wage rate regardless of sex, or sex plus another protected status. Unless a referendum petition is filed, the law goes into effect on January 1, 2021, providing employers with 19 months to come into compliance. Key points of the legislation follow.

Prohibited Conduct and Scope

The Act prohibits employers from:

paying differing wages based on an employee’s sex or on the basis of sex in combination with another protected status (disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry) unless one of the statutory exceptions apply;
seeking the wage rate history of a prospective employee or relying on a prior wage rate to determine a wage rate for the position in question;
discriminating or retaliating against a prospective employee for failing to disclose their wage rate history;
discharging or retaliating against an employee for asserting the rights established by the Act, invoking the Act’s protections on behalf of anyone, or in assisting in the enforcement of the Act;
discharging, disciplining, discriminating against, coercing, intimidating, threatening, or interfering with an employee or other person because they inquired about, disclosed, compared, or otherwise discussed the employee’s wage rate; and
prohibiting an employee from disclosing wage rate information.

The Act defines “employer” broadly to include “the state or any political subdivision, commission, department, institution, or school district thereof, and every other person employing a person in the state.” “Employee” is defined as “a person employed by an employer.”

Exceptions to the Act

The Act allows exceptions to the prohibition against a wage differential based on sex if the employer demonstrates the difference in wages is reasonably based upon one or more factors, including:

a seniority system;
a merit system;
a system that measures earnings by quantity or quality of production;
the geographic location where the work is performed;
education, training, or experience to the extent that they are reasonably related to the work in question; or
travel, if the travel is a regular and necessary condition of the work performed.

In relying on these factors, the employer must not rely on prior wage rate history to justify a disparity in current wage rates.

New Employer Obligations

The Act also imposes new affirmative obligations on employers. Once the Act is in effect, employers must:

announce to all employees employment advancement opportunities and job openings, and the pay range for the openings; and
maintain records of job descriptions and wage rate history for reach employee for the duration of their employment, plus two years.

Private Right of Action and Enforcement

Employees have a private right of action in district court to pursue remedies specified in the law. They need not first file administrative wage discrimination complaints with the Colorado Department of Labor and Employment before bringing suit.

The Act sets a two-year statute of limitations; a violation of the statute occurs each time a person is paid a discriminatory wage rate.

An employee may recover both economic damages (measured as the difference between the amount the employer paid and what the employee would have received had there been no violation) plus additional liquidated damages, equal to the amount of the economic damages. The liquidated damages provision is intended to compensate an employee for the delay in receiving amounts due. Employees may also recover attorneys’ fees and costs, and obtain legal and equitable relief, which may include reinstatement, promotion, and a pay increase.

The Director of the state Department of Labor and Employment is also authorized to enforce actions against an employer involving transparency in pay and employment opportunities, including fines of between $500 and $10,000 per violation. An employer’s failure to comply with the Act for one promotional opportunity or job opening is considered one violation.

Good Faith Defense and Wage Audits

An employer may avoid liquidated damages for a violation if it can establish that it had reasonable grounds for believing it was not in violation of the Act. The Act states that one factor to be considered in determining good faith is whether the employer had completed within the prior two years a “thorough and comprehensive pay audit of its workforce, with the specific goal of identifying and remedying unlawful pay disparities.”

Rebuttable Presumption Regarding the Failure to Keep Records

If an employer fails to keep required wage records and is later sued, the Act permits the court to impose a rebuttable presumption that the records not kept by the employer contained information favorable to the employee’s wage claim and the jury may be instructed that the failure to keep records is evidence that the violation was not in good faith.

Lessons for Employers

With pay equity issues increasingly in the news, we expect this new legislation to spur an uptick in litigation after it goes into effect in 2021. Because these are inherently fact-intensive cases, litigation involving the new Equal Pay for Equal Work Act will be complex and protracted. Colorado employers should audit and review their compensation systems now in order to identify and address potential problems. Consideration should be given to involving outside counsel in these audits in order to cloak them with the attorney-client privilege against public disclosure.

This post was written by Steven W. Suflas and Rachel R. Mentz of Ballard Spahr LLP.

Read more labor and employment news on the National Law Review’s Employment law page.

Five Fast Facts about Washington’s New Noncompetition Law

On May 8, 2019, Washington Governor Jay Inslee signed into law a bill that prohibits employers from entering into noncompetition covenants with employees whose W-2 earnings are less than $100,000, and with independent contractors paid less than $250,000 per year.

In addition to the above, employers should be aware of the following five provisions in the new law:

The law creates a presumption that any covenant longer than 18 months is unreasonable and unenforceable as a matter of law. A party to the covenant may rebut the presumption by showing through clear and convincing evidence that a duration longer than 18 months is necessary to protect the party’s business or goodwill.
A covenant will be unenforceable unless the employer discloses its terms to a prospective employee in writing.
If a covenant is entered into after employment begins, the employer must provide consideration in addition to employment to support the covenant.
If an employee subject to a noncompetition covenant is terminated in a layoff, the covenant is void unless the employer pays the terminated employee base salary for the remainder of the covenant’s terms, less compensation earned through subsequent employment.
If a court determines a noncompetition covenant violates the new law, the party seeking enforcement must pay the aggrieved person the greater of the actual damages or $5,000, plus reasonable attorneys’ fees and costs.

The new law will take effect January 1, 2020.

This post was written by Cary Burke of Polsinelli PC.

Read more on Washington’s noncompete agreement law the National Law Review’s Labor and Employment page.

Employee Wins Federal Appeal Involving Commonly-used Defenses in Employment Discrimination Cases

The U.S. Court of Appeals for the Fourth Circuit issued a decision (Haynes v. Waste Connections, Inc.) this week that reversed in the employee’s favor. The opinion tackles many commonly-used defenses by employers in employment discrimination and retaliation cases. In particular, the Fourth Circuit analyzed whether:

the employee had identified a valid comparator (aka a similarly situated employee);
established that he was performing his job satisfactorily when the employer fired him; and
produced any evidence of pretext, which looks to whether the employee can show that the employer’s stated reason for the adverse employment action (termination, demotion, etc.) was meant to disguise a discriminatory intent.

Ultimately, the court found in favor of the employee and sent the case back down to the trial court.

Background

Jimmy Haynes, who is African-American, claimed that his former employer, Waste Connections, Inc. (WCI), discriminated and retaliated against him when it fired him. Haynes alleged that WCI violated Title VII of the 1964 Civil Rights Act and 42 U.S.C. §1981 (Section 1981) as a result. Notably, while Title VII and Section 1981 have many similarities in terms of prohibiting race discrimination in employment, a number of significant differences exist that can impact how a court reviews these claims, as discussed here.

The key facts had to do with Haynes reporting to work one evening and then leaving the job site. According to Haynes, he left work due to a stomach virus and told his supervisor about this. WCI, on the other hand, claimed that Haynes walked off the job because he was frustrated that his normal truck was not ready. Two days later, WCI fired Haynes for job abandonment. WCI did not mention any other reason for terminating Haynes’ employment at the time. During the course of his lawsuit though, WCI claimed that Haynes had also committed other violations during June and August 2015.

After Haynes filed his lawsuit in court and the parties exchanged information during the discovery process, WCI filed a motion for summary judgment arguing that no disputed material facts existed and thus a jury trial was unnecessary. The trial court granted summary judgment to the WCI and dismissed Haynes’ lawsuit. Haynes then appealed this decision and the appellate court reversed the trial court’s decision.

The Fourth Circuit’s findings

Valid comparator/similarly situated employee

The Fourth Circuit first analyzed whether Haynes had established a proper comparator who was not African-American and was treated better than him. Noting that comparing similar employees will never involve exactly the same offenses occurring over the same time period with the same set of facts, the court explained that showing someone is a valid comparator involves:

evidence that the employee and the comparator dealt with the same supervisor;
were subject to the same standards; and
engaged in the same conduct without such differentiating circumstances that would distinguish their conduct or the employer’s treatment of them

Haynes v. Waste Connections, Inc., Case No. 17-2431 at p. 8, (4th Cir. April 23, 2019). The appellate court found that a white employee, who had the same supervisor as Haynes, had several workplace violations. These violations included twice using a cellphone while driving, driving while distracted, and responding to a traffic situation late. Id. It also appeared that this white employee had yelled at the supervisor before quitting his job. Yet the white employee was allowed to return to work and Haynes, who had not yelled at his supervisor and had fewer infractions, was fired.

Because both employees had the same supervisor, were subject to the same standards, and engaged in similar conduct, the court found the white employee to be a valid comparator. In making this decision, the appellate court rejected WCI’s argument that the white employee’s infractions did not cause any damages whereas Haynes’ violations did. It also turned away WCI’s claim that the white employee had notified the employer that he was resigning while Haynes simply walked off the job.

Was Haynes performing his job satisfactorily

WCI also argued that Haynes had not demonstrated that he was performing his job satisfactorily at the time WCI fired him. The Fourth Circuit pointed out that Haynes was not required “to show that he was a perfect or model employee;” rather, he need only show that he was qualified for the position and meeting WCI’s legitimate expectations. To support his contention that he was satisfactorily performing his job, Haynes produced evidence that:

his supervisor told him the month before Haynes was terminated that “everything looks good” and “nothing to worry about” in terms of his upcoming job performance evaluation; and
Haynes received bonuses during the relevant time period

The court thus ruled that Haynes had presented enough evidence to demonstrate satisfactory job performance.

Evidence of pretext

To show pretext, “a plaintiff may show that an employer’s proffered non-discriminatory reasons for the termination are inconsistent over time, false, or based on mistakes of fact.” Haynes, Case No. 17-2431 at 12. If the employee does so, then summary judgment should be denied and the case should proceed to trial.

The most important factor to the Fourth Circuit was that WCI came up with a new reason why it claims it terminated Haynes’ employment: his poor attitude. The only reason given at the time of Haynes’ termination, however, was job abandonment. Further, the company policy on job abandonment defines it as three days with no call or no show, yet Haynes had called and texted within one day. Ultimately, the Fourth Circuit found too many inconsistencies with WCI’s purported reasons for firing Haynes and thus ordered that a jury should decide whose version is correct.

Key takeaways

Some important factors can be gleaned from the Fourth Circuit’s decision here:

For the comparator/similarly situated analysis, you’re more likely to meet this test if you and the other employee(s) you’re comparing yourself to:
- share the same supervisor;
- perform very similar job tasks and responsibilities (both the number and weight) as the other person;
- if the case involves discipline, then the number and severity of the infractions should be relatively similar;
- have similar job performance evaluations and disciplinary history; and
- your experience level (including supervisory experience) the same as the other person
To demonstrate that you were performing your job satisfactorily, evidence that you received bonuses, awards, and/or average (or higher) job performance ratings will be important;
Regarding pretext, the more inconsistencies you can show the employer’s reasons for firing you, the better off you will be.

This post was written by Eric Bachman of Zuckerman Law.

Supreme Court Agrees to Hear Cases Determining Extent of Title VII Protection for LGBT Workers

The Supreme Court of the United States announced three cases will be argued next term that could determine whether Title VII protects LGBT employees from workplace discrimination.

Title VII prohibits discrimination because of “race, color, religion, sex, or national origin,” but it does not explicitly mention sexual orientation or gender identity. Federal courts have disagreed on whether discrimination based on sexual orientation or gender identity falls within Title VII’s prohibition against sex-based discrimination. Differing opinions on this topic exist within the federal government as well: the Equal Employment Opportunity Commission (“EEOC”) has taken the position that Title VII prohibits discrimination based on sexual orientation and gender identity, while the Department of Justice has argued it does not. The Supreme Court’s decisions may ultimately decide these conflicts.

Two cases represent a split in federal appellate courts regarding the extent, if any, to which Title VII prohibits sexual orientation discrimination as a subset of sex discrimination. In Altitude Express v. Zarda, a skydiving company fired Donald Zarda, a skydiving instructor, after Zarda informed a female client he was gay to assuage her concern about close physical contact during skydives. The trial court dismissed Zarda’s sexual orientation discrimination claim. In an opinion written by Chief Judge Robert A. Katzmann on behalf of a full panel of the U.S. Court of Appeals for the Second Circuit, the Court reversed the trial court’s dismissal and held that sexual orientation discrimination is properly understood as a subset of discrimination on the basis of sex. In other words, in the Second Circuit, sexual orientation discrimination is prohibited under Title VII. The Second Circuit aligned its thinking with the Seventh Circuit’s April 2017 opinion in Hively v. Ivy Tech Community College of Indiana, which held that “discrimination on the basis of sexual orientation is a form of sex discrimination.”

The U.S. Court of Appeals for the Eleventh Circuit reached the opposite conclusion in Gerald Bostock v. Clayton County Georgia. Gerald Bostock alleged he was terminated from his county job after the county learned of his involvement in a gay recreational softball league and his promotion of involvement in the league to co-workers. The trial court dismissed and the Eleventh Circuit affirmed, relying on its own precedent that broadly held that Title VII does not prohibit sexual orientation discrimination. In other words, in the Eleventh Circuit, Title VII does not prohibit sexual orientation discrimination.

The Supreme Court consolidated the cases into a single case to determine whether the prohibition in Title VII against employment discrimination “because of . . . sex” encompasses discrimination based on an individual’s sexual orientation.

The third case, R.G. & G.R. Harris Funeral Homes v. EEOC, focuses on whether Title VII applies to transgender employees. In 2007, a funeral home hired Aimee Stephens, whose employment records identified her as a man. Later, Stephens told the funeral home’s owner she identified as a woman and wanted to wear women’s clothing to work. The owner fired Stephens, believing allowing Stephens to wear women’s clothing violated the funeral home’s dress code and “God’s commands.” The EEOC filed suit on Stephens’ behalf. The trial court dismissed a portion of the lawsuit because “transgender . . . status is not currently a protected class under Title VII,” but permitted other portions to proceed based on the claim Stephens was discriminated against because the funeral home objected to her appearance and behavior as departing from sex stereotypes. The Sixth Circuit agreed that Stephens had viable claims. The Supreme Court will review “[w]hether Title VII prohibits discrimination against transgender people based on (1) their status as transgender or (2) sex stereotyping” under prior Supreme Court precedent.

All three cases will affect the employment rights of LGBT workers. Dinsmore & Shohl lawyers will closely monitor the Court’s analysis of these cases. Dinsmore’s Labor and Employment Practice Group stands ready to assist employers in navigating this developing area of law. Dinsmore’s experience in this arena includes accomplished labor and employment lawyers, former law clerks to federal judges who have drafted orders on these very issues, former federal government attorneys, litigators and published scholars.

This post was written by Jan E. Hensel and Justin M. Burns of Dinsmore & Shohl LLP.

Read more on the US Supreme Court decision on the National Law Review’s Labor and Employment page.

Cincinnati City Council Passes Ordinance Prohibiting Salary History Inquiries

In a thinly veiled attempt to steal the spotlight from Cleveland, the new destination city for the National Football League, on March 13, 2019, the Cincinnati City Council passed Ordinance No. 83-2019, titled Prohibited Salary History Inquiry and Use, barring employers from inquiring about or relying on job applicants’ salary histories. It is scheduled to become effective in March 2020, and it applies to private employers with 15 or more employees in the city of Cincinnati.

The ordinance makes it “an unlawful discriminatory practice for an employer or its agent to:

1. Inquire about the salary history of an applicant for employment; or
2. Screen job applicants based on their current or prior wages, benefits, other compensation, or salary histories, including requiring that an applicant’s prior wages, benefits, other compensation or salary history satisfy minimum or maximum criteria; or
3. Rely on the salary history of an applicant in deciding whether to offer employment to an applicant, or in determining the salary, benefits, or other compensation for such applicant during the hiring process, including the negotiation of an employment contract; or
4. Refuse to hire or otherwise disfavor, injure, or retaliate against an applicant for not disclosing his or her salary history to an employer.”

The ordinance does not limit employers from asking applicants “about their expectations with respect to salary, benefits, and other compensation, including but not limited to unvested equity or deferred compensation that an applicant would forfeit or have cancelled by virtue of the applicant’s resignation from their current employer.” Ordinance No. 83-2019 requires that, following a conditional offer of employment, upon request, the employer must provide the conditional offeree the pay scale for the position. The ordinance provides a private right of action to enforce the law. Remedies for violating the ordinance include “compensatory damages, reasonable attorney’s fees, the cost of the action, and such legal and equitable relief as the court deems just and proper.”

Ordinance No. 83-2019 is designed to “ensure that . . . job applicants in Cincinnati are offered employment positions and subsequently compensated based on their job responsibilities and level of experience, rather than on prior salary histories.” In reality, it reaches well beyond Cincinnati, as state and local salary history bans are proliferating. Many municipalities, cities, and states across the country have passed laws limiting salary inquiries, and legislation is pending in numerous other jurisdictions around the country.

This post was written by John Gerak of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

Read more on Equal Pay issues on the National Law Review’s Labor and Employment page.

U.S. Senators Seek Formal Investigation Of Non-Compete Use And Impact

Earlier this month, a group of six United States Senators made a joint request for the Government Accountability Office (GAO) to investigate the impact of non-compete agreements on workers and the U.S. economy as a whole. This action suggests that the federal non-compete reform effort is not going away.

Recent Legislative Efforts

On February 18, 2019, we reviewed a new bill by Florida Senator Marco Rubio to prohibit non-competes for low-wage employees. That bill followed an effort in 2018 by Democrats in both houses of Congress to ban non-competes altogether. Although Senator Rubio’s bill represents a more limited attack on non-competes, we noted that it “suggests a level of bipartisan support that was not previously apparent.”

The Joint Letter

The recent joint letter to the GAO, issued on March 7, 2019, is signed by two Senators who were not involved in the prior legislative efforts: Democratic Senator Tim Kaine (VA); and Republican Senator Todd Young (IN). This represents additional evidence of bipartisanship on non-compete reform.

The joint letter does not formally oppose the use of non-competes. Nevertheless, from the Senators’ explanation for their request, it is clear that they believe the use of non-competes has become excessive, and that significant harm is being done to workers and the greater economy as a result.

In the letter, the Senators cite three ways in which non-competes allegedly are being abused:

The allegedly excessive imposition of non-competes on low-wage workers;
The alleged inability of workers to “engage in genuine negotiation over these agreements”; and
The belief that “most working under a non-compete were not even asked to sign one until after receiving a job offer.”

Further, the Senators allege that “[a]cademic experts and commentators from across the political spectrum have raised serious concerns about the use and abuse of these clauses[.]”

Based on the above-referenced concerns, the letter instructs the GAO to investigate the following questions:

What is known about the prevalence of non-compete agreements in particular fields, including low-wage occupations?
What is known about the effects of non-compete agreements on the workforce and the economy, including employment, wages and benefits, innovation, and entrepreneurship?
What steps have selected states taken to limit the use of these agreements, and what is known about the effect these actions have had on employees and employers?

Of note, these questions appear to address broader concerns about the use and impact of non-compete agreements than the discreet issues raised by the alleged “abuses” set forth above. The letter does not provide a deadline for the GAO to issue its report. However, the GAO’s explanation of how it handles investigation requests sets forth a six-step process, from Congress making the request to the issuance of the report. Further, while the GAO protocol does not offer a time-frame for every step, it does state that it “typically” takes “about 3 months” to simply design the scope of the investigation. Consequently, it would be reasonable to anticipate waiting months at least for the GAO to issue the report.

Where Does This Leave Us?

As noted above, the joint letter indicates that there is growing bipartisan support for restricting the use of non-competes on a nation-wide level. At the same time, by expressing the need for additional information about the use and impact of non-compete agreements on U.S. workers, the Senators may not move forward with further proposed non-compete legislation until they receive that information and take the time to fully digest its implications.

This post was written by Clifford R. Atlas, Erik J. Winton and Colin A. Thakkar of Jackson Lewis.

For more labor and employment news, check out the National Law Review’s Employment type of law page.

Can You Prohibit Employees From Using Cell Phones At Work?

With the prevalence of cell phones in today’s society, many companies struggle with how to manage employee time spent on personal mobile devices. But there are legal limits on what employers can do on this front. The National Labor Relations Board (NLRB) has taken the position that employees have a presumptive right, in most instances, under the National Labor Relations Act (NLRA) to use personal phones during breaks and other non-working times.

A recent advice memo issued by the agency has reaffirmed its stance – even since the NLRB generally has taken a more lax view of employer personnel policies over the last year. At issue, in this case, was a company policy that limited employees’ use of personal cell phones in the workplace. The relevant analysis in the NLRB memo states:

“This [company’s] rule states that, because cell phones can present a ‘distraction in the workplace,’ resulting in ‘lost time and productivity,’ personal cell phones may be used for ‘work-related or critical, quality of life activities only.’ It defines ‘quality of life activities’ as including ‘communicating with service or health professionals who cannot be reached during a break or after business hours.’ The rule further states that ‘[o]ther cellular functions, such as text messaging and digital photography, are not to be used during working hours.’ This rule is unlawful because employees have a [NLRA] Section 7 right to communicate with each other through non-Employer monitored channels during lunch or break periods. Because the rule prohibits use of personal phones at all times, except for work-related or critical quality of life activities, it prohibits their use on those non-working times. The phrase regarding text messaging and digital photography is more limited, but still refers to ‘working hours,’ which the Board, in other contexts, has held includes non-work time during breaks. Although the employer has a legitimate interest in preventing distractions, lost time, and lost productivity, that interest is only relevant when employees are on work time. It, therefore, does not outweigh the employees’ Section 7 interest in communicating privately via their cell phones, during non-work time, about their terms and conditions of employment.” (emphasis added)

In other words, while an employer may be able to limit employee use of personal mobile devices during working time in order to minimize distractions, having a policy in place that is worded in a way that limits that activity during non-working time may run afoul of the NLRA.

This is another reminder for employers to ensure their policies are drafted in a way that conforms to applicable NLRB standards. A poorly drafted rule – even with the best intentions – can result in legal headaches for a company.

This post was written by David J. Pryzbylski of Barnes & Thornburg LLP.

Read more employer HR policies on the labor and employment type of law page.

Category: Labor & Employment

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