Tag: Employment Law

No Relief in Sight for NJ Employers: Six Newly-Enacted State Employment Laws to Tackle

On January 21, 2020, New Jersey Governor Phil Murphy signed five employee-friendly bills into law, including statutorily mandated requirements that increase penalties on employers that misclassify workers and obligate employers to pay severance to workers impacted by mass layoffs. Also, on December 19, 2019, the Governor signed the “Create a Respectful and Open Workplace for Natural Hair Act” (“CROWN Act”), which clarifies that discrimination based on hair textures and styles violates the New Jersey Law Against Discrimination (“LAD”).

In line with states like California and New York, the enactment of these new laws places New Jersey among a handful of states that provide markedly heightened protections for employees. The amalgamation of these new laws dramatically expands employee rights in the workplace.

Increased Employer Fines for Misclassification

Effective immediately, A.B. 5839 authorizes the state’s Department of Labor and Workforce Development to assess fines against employers for misclassifying workers. Under the new law, New Jersey employers or staffing agencies that misclassify workers may be issued up to a $250 fine per employee for the first violation and up to $1,000 per employee for subsequent violations. The amount of the penalty to be assessed will depend on such factors as the history of prior violations, the severity of the violation, the size of the employer’s business and the good faith of the employer. In addition, an employer found to have misclassified a worker may have to pay a fine to the misclassified worker of up to 5% of their gross earnings over the previous year.

New Employer Posting Requirement

Effective March 1, 2020, A.B. 5843 requires employers to post a conspicuous notice regarding employee misclassification. The New Jersey Department of Labor and Workforce Development will issue a form of notice, which will include a prohibition on misclassification, description of what constitutes worker misclassification, employee rights and remedies, and the process for reporting employer misclassifications.

In addition, the newly enacted statute prohibits employer retaliation against workers who make complaints about potential unlawful employee misclassifications. Employer retaliation carries a fine of $100 to $1,000 for each offense, and employees found to be terminated in retaliation for such protected conduct are entitled to reinstatement in addition to back pay and legal fees.

Managers Potentially on the Hook

Effective immediately, A.B. 5840 amends New Jersey’s recently passed Wage Theft Act and provides that employers and labor contractors will be jointly and severally liable for state wage and hour law violations and tax law violations, including with respect to worker misclassifications. The law broadly provides that any person acting on “behalf of an employer,” including an owner, director, officer or manager of the employer, may be held liable as the employer.

Business Shutdowns for Violations

Effective immediately, A.B. 5838 permits state regulators to issue “stop-work orders” upon seven days’ advance notice to sites where employers are found to have violated state wage, benefits, or tax laws, subjecting employers to a steep penalty of $5,000 per day against an employer for each day that it conducts business operations that are in violation of the stop-work order.

The law gives the state’s Commissioner of Labor and Workforce Development the authority to issue stop-work orders requiring cessation of all business operations at the specific place of business where any wage, benefit, or employment tax law violation is found. Employers subject to a stop-work order will have 72 hours following receipt of the order to exercise their right to make a written appeal to contest the stop-work order. Importantly, while employers may appeal the finding, that process may take weeks, risking potentially large losses for the implicated business.

Severance for Mass Layoffs

Effective July 19, 2020, S.B. 3170 dramatically amends the New Jersey state WARN Act in several significant respects. In the event of a covered mass layoff or termination or transfer of operations, the amendment increases the advance notice required to affected employees from 60 days to 90 days. New Jersey was previously aligned with the federal WARN Act which requires 60 days in advance of certain mass layoffs or plant closings. With respect to the length of notice now required in New Jersey, the new 90- day prior notice period mirrors New York State’s advance notice requirement, though threshold standards defining when notice must be given under these statutes differ. Upon the effective date, New Jersey employers now will need to consider two different statutory schemes to determine to what extent advance notice is required.

The amendment requires covered employers to provide severance pay to employees when there is a mass layoff or termination/transfer or operations impacting at least 50 full-time workers laid off in a 30-day period. Under the statute, severance is calculated at one week’s pay for each full year the worker has been employed and is required even when the requisite notice has been provided. In addition, when an employer fails to meet its advance notice mandate, the new law requires employers to give affected employees an additional four weeks of severance pay. In contrast, severance is currently a penalty for non-compliance with the New Jersey WARN Act.

Further, the required severance must be paid to the affected employee at the same time as the final paycheck. The severance cannot be used as consideration to negotiate a general release of claims from the terminated employee. Employers can, however, obtain a release of claims where additional consideration is offered to the impacted employee for that specific purpose.

The Crown Act

S.B. 3945 amends the LAD to clarify that race discrimination includes discrimination on the basis of “traits historically associated with race, including, but not limited to, hair texture, hair type, and protective hairstyles.” Governor Murphy enacted the CROWN Act exactly one year after an incident involving an African-American high school wrestler who was forced to cut off his locks in order to compete in a match. The wrestling incident prompted the introduction of S.B. 3945 and garnered widespread media attention. We reported on the CROWN Act in detail in our October 2019 alert. Effective immediately, the CROWN Act codifies guidance issued by the New Jersey’s Division on Civil Rights (DCR) stating that the DCR considered “hairstyles closely associated with Black people,” such as “twists, braids, cornrows, Afros, locks, Bantu knots, and fades” to be included in the definition of racial characteristics protected under the LAD.

New Jersey has become the third state to ban discrimination based on natural hair and hairstyles, following New York (effective on July 12, 2019) and California (effective on January 1, 2020). The New York City Commission on Human Rights issued similar guidance in February 2019 that clarifies that the New York City Human Rights Law includes discrimination based on natural hair and hairstyles as a form of race discrimination. Several other states and municipalities have similar legislation pending. Also, Senator Cory Booker introduced federal legislation on December 5, 2019 that would ban discrimination based on hair textures and hairstyles that are commonly associated with a particular race or national origin, and Representative Cedric Richmond introduced companion legislation in the House of Representatives.

Takeaways:

New Jersey continues to take steps to dramatically increase employee rights in the workplace. New Jersey employers should take appropriate measures now to ensure that (i) owners, directors, officers, managers, and others involved in the process of classifying workers are mindful of the new employee classification requirements for businesses and their potential exposure based on individual liability for misclassifications, (ii) their businesses are compliant with new posting requirements regarding New Jersey’s recently passed employee misclassification laws, and (iii) managers and supervisors are trained on the new retaliation protections afforded employees who report alleged violations concerning employee misclassification.

New Jersey employers also should review their grooming policies to determine whether they discourage natural hairstyles and hair textures, and determine whether any policies pertaining to appearance or aesthetics implicate any other proxies to race. With similar laws in other states, like New York, and pending elsewhere, employers across the nation should review their policies regarding grooming, appearance and aesthetics.

Lastly, the amendments to the New Jersey WARN Act will require careful analysis to determine an employer’s obligations and to minimize risks in connection with a mass layoff or transfer/termination of operations. The new severance obligations undoubtedly will impose substantial financial burdens on employers who have made the decision to reduce costs and/or operations.

© Copyright 2020 Sills Cummis & Gross P.C.

For more on employment laws in New Jersey and elsewhere, see the National Law Review Labor & Employment law page.

Federal Court Preliminary Enjoins Enforcement of New California Arbitration Law AB 51

On Friday, January 31, 2020, Chief District Judge Kimberly J. Mueller of the federal District Court for the Eastern District of California issued a Preliminary Injunction (PI) against the State of California, enjoining the State from enforcing Assembly Bill 51 (AB 51) with respect to mandatory arbitration agreements in employment to the extent governed by the Federal Arbitration Act (FAA).1

As discussed in the Vedder Price employment law alert, TRO Halts New Arbitration Law AB 51, the District Court had previously issued a Temporary Restraining Order (TRO) on December 30, 2019 temporarily enjoining enforcement of AB 51 pending a preliminary injunction hearing scheduled for January 10, 2020. The Court subsequently continued the January 10 hearing and extended the TRO until January 31 to allow the parties time to submit supplemental briefing. AB 51, the new California law previously slated to take effect on January 1, 2020, purportedly prohibited employers from requiring applicants or employees in California to agree, as a condition of employment, continued employment, or the receipt of any employment-related benefit, to arbitrate claims involving violations of the California Fair Employment and Housing Act (FEHA) or the California Labor Code. AB 51 did not specifically mention “arbitration” but instead broadly applied to the waiver of “any right, forum, or procedure for a violation of [the FEHA or Labor Code], including the right to file and pursue a civil action.”

In issuing the PI, the District Court specifically: (a) enjoined the State from enforcing sections 432.6(a), (b), and (c) of the California Labor Code where the alleged “waiver of any right, forum, or procedure” is the entry into an arbitration agreement covered by the FAA2; and (b) enjoined the State from enforcing Section 12953 of the California Government Code [FEHA] where the alleged violation of “Section 432.6 of the Labor Code” is entering into an arbitration agreement covered by the FAA.

The PI will remain in place pending a final judgment, which would likely occur following a motion for summary judgment rather than a full trial on the merits since there are no material facts in dispute to be tried. However, pursuant to 28 U.S.C. § 1292(a)(1), an order granting a preliminary injunction is immediately appealable. Accordingly, it is likely that the State of California will file an immediate appeal directly with the 9th Circuit Court of Appeals.

In the interim, based on this PI, employers should feel comfortable in continuing to require employees in California to sign mandatory arbitration agreements as a condition of employment without being subjected to criminal prosecution under AB 51, provided that the arbitration agreement is clearly governed by the FAA. Employers are encouraged to consult with legal counsel to ensure compliance in this regard.

1 See Chamber of Commerce of U.S., et al. v. Xavier Becerra, et al., Case No. 2:19-cv-02456-KJM-DB, Dkt. No. 44 (E.D. Cal. Jan. 31, 2020).

2 Federal Arbitration Act, 9 U.S.C. §§ 1-16

© 2020 Vedder Price

For more on recent employment law litigation in California and elsewhere, see the National Law Review Labor & Employment law section.

Smoking Cannabis Legally in Illinois: What’s an Employer to Do?

On January 1, 2020, Illinois joined the growing number of states that allow the sale and use of marijuana for personal and recreational use. The law has been so popular that most of the cannabis dispensaries in Illinois sold out of their supply within the first week.

So, what now for employers in Illinois? May they tell workers who get stoned on a break that they must leave the workplace? Can they still maintain a drug-free workplace? Can they still do drug testing? The answer to all three questions is yes; however, as explained below, there are important steps that an employer must take should it decide to discipline an employee. While there will be much to work out as Illinois navigates its new cannabis laws, employers may maintain the same standards at work that they had before the law became effective. But they need to know and follow the new law’s requirements.

Parameters of the New Law

On January 1, 2020, the Cannabis Regulation Tax Act (CRTA), 410 Ill. Comp. Stat. Ann. 705/10 et seq., became law, permitting personal and recreational cannabis use for all individuals 21 years of age or older. Under the CRTA, Illinois residents may possess 30 grams of cannabis flower, 500 milligrams of a THC-infused cannabis product and 5 grams of cannabis concentrate for personal use.

The CRTA will not be interpreted to diminish workplace (includes buildings, real property and parking lots under control of the employer and used by the employee to perform job duties) safety. The act identifies and allows employers to adopt certain cannabis policies relating to use, consumption, storage and impairment to further protect employee safety, such as:

  • Employers are allowed to adopt a reasonable zero-tolerance policy for its employees or require a drug-free workplace.
  • Employers are permitted to adopt employment policies relating to drug testing, smoking, consuming, storing and using cannabis while an employee is at the workplace, performing job duties or on call.
  • Employers may prohibit an employee from using cannabis or from being under the influence of cannabis while at the workplace, performing job duties or on call.
  • Employers may undertake disciplinary measures or terminate an employee’s employment for violating a reasonable workplace drug policy.

A Fine Line

One of the trickier aspects for Illinois employers will be making a determination of when an employee is impaired or under the influence of cannabis. The law provides that an employer can express a “good faith belief” that the employee manifests certain articulable symptoms that decrease or diminish the employee’s job performance and responsibilities. The CTRA identifies a number of symptoms an employer may consider in finding an employee is impaired or under the influence, such as “symptoms of the employee’s speech, physical dexterity, agility, coordination, demeanor, irrational or unusual behavior, or negligence or carelessness in operating equipment or machinery; disregard for the safety of employee or others, involvement in any accident that results in serious damage to equipment or other property; disruption of a production of manufacturing process; or carelessness that results in any injury to the employee or others.”

When an employer takes any action against an employee for being under the influence of cannabis, the CTRA requires that an employee be provided a reasonable opportunity to challenge the basis of an employer’s determination. Employers should notify an employee in writing of its determination and invite the employee to state their case as to why the employer’s determination may be incorrect before it takes an adverse action against the employee. All activity in the appeal process should be documented.

Employers’ Rights and Liability

Some good news for employers is that the CTRA does not create or imply a cause of action against an employer for the actions taken relating to an employer’s reasonable workplace drug policy. IL LEGIS 101-593 (2019), 2019 Ill. Legis. Serv. P.A. 101-593 (S.B. 1557) (WEST). Actions taken relating to an employer’s reasonable drug policy include subjecting an employee or applicant to a drug and/or alcohol test, nondiscriminatory random drug testing, disciplining employees, termination of employment or withdrawing an offer for employment because of a failed drug test. The amendments to the CTRA now expressly limit an employer’s liability for disciplining or terminating employment resulting from a failed drug test. Further, the amendments to the CTRA clarify and reinforce an employer’s ability to administer pre-employment and random drug testing policies.

Employers must be careful, however, to not take action against an employee when the use of cannabis is after work hours. The Right to Privacy in the Workplace Act was amended, effective January 1, 2020, 820 Ill. Comp. Stat. Ann. 55/5, to specifically prohibit employers from terminating employment because of an employee’s personal or recreational use of lawful products (including cannabis) outside of the workplace during nonworking, off-call hours. In the event an employee is disciplined or employment is terminated because of cannabis use outside of the workplace during off-duty hours, an employee may bring a discrimination cause of action under the Right to Privacy in the Workplace.

It is anticipated that there will be tension between individuals contesting an employer’s determination that he/she was impaired or under the influence of cannabis at the workplace with the contention that any use was during off-duty hours. For instance, what if an employee used cannabis four hours before starting a shift? The employee may claim protection under the Right to Privacy in the Workplace, whereas the employer may argue the employee was nonetheless under the influence in the workplace. This tension is exacerbated by the fact that there is currently no test to determine how recently an individual has used, consumed or smoked cannabis. Further, there is no test that determines how high or low cannabis levels are in an individual.

Illinois employers will need to understand and follow the CTRA laws and Right to Privacy in the Workplace laws. Employers should prepare specific written policies to address these new issues.

© 2020 Wilson Elser

ARTICLE BY David M. Holmes of Wilson Elser Moskowitz Edelman & Dicker LLP, with assistance from Gabriela C Herrera (Law Clerk-Chicago).
For more on the intersection of recreational cannabis & employment law, see the National Law Review Labor & Employment law section.

Federal Court Issues Eleventh-Hour TRO to Enjoin Enforcement of California’s Controversial New Independent Contractor Law for 70,000 Independent Truckers

On January 1, 2020, California’s new independent contractor statute, known as AB 5, went into effect.  The law codifies the use of an “ABC” test to determine if an individual may be classified as an independent contractor.

The hastily passed and controversial statute has been challenged by a number of groups as being unconstitutional and/or preempted by federal law, including ride-share and delivery companies and freelance writers.

Just hours before AB 5 went into effect, a California federal court in San Diego enjoined enforcement of the statute as to some individuals – approximately 70,000 independent truckers, many of whom have invested substantial sums of money to purchase their own trucks and to work as “owner-operators.”

In the lawsuit, the California Trucking Association (“CTA”) has alleged that the “ABC” test set forth in AB 5 is preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”).

The CTA asserts that the FAAA preempts the “B” prong because it will effectively operate as a de facto prohibition on motor carriers contracting with independent owner-operators, and will therefore directly impact motor carriers’ services, routes, and prices, in contravention of the FAAA’s preemption provision.

The CTA further contends that the test imposes an impermissible burden on interstate commerce, in violation of the Commerce Clause of the U.S. Constitution.  The CTA asserts that the test would deprive motor carriers of the right to engage in the interstate transportation of property free of unreasonable burdens, as motor carriers would be precluded from contracting with a single owner-operator to transport an interstate load that originates or terminates in California.  Instead, motor carriers would be forced to hire an employee driver to perform the leg of the trip that takes place in California.

©2020 Epstein Becker & Green, P.C. All rights reserved.

Global Employment Contracts: The Modern Tower of Babel

Although multi-jurisdictional compliance is a challenge in relation to every aspect of employment law, the structure of employment contracts and the enforcement of global policies require particularly careful consideration.

The need to coordinate individual country compliance across numerous countries whilst still maintaining a common company culture requires extensive knowledge of national laws and considerable flexibility.

Contracts

US-based businesses will be used to working with at-will offer letters, but these are mostly unheard of elsewhere. In most jurisdictions, detailed employment contracts are not only customary, but are required by law. As you would expect, companies must ensure the legal compliance of their contractual documentation for each country in which they do business. This includes engagement letters, employment offers, employment contracts, bonus schemes, stock option plans, etc.

With employment contracts, the most common approach is to prepare a contract compliant with local law in accordance with best practices in the jurisdiction where the individual is to be employed. Contracts should incorporate crucial terms, such as probationary periods, termination grounds, working time provisions, and post-termination non-compete and/or non-solicitation provisions.

  • Countries have varying rules on the maximum duration of a probationary period. For example, France permits an eight-month probationary period, one renewal included, for executives under an indefinite-term contract (contrat à durée indéterminée); whereas a 90-day probationary period is standard in the United States.
  • Subject to applicable statutory restrictions in each country, termination provisions provide a good starting point to enforce the departure of an employee, for example in case of a violation of company policies, such as a code of conduct.
  • In France, where the legal working time is 35 hours per week, there is the option of entering into flat-rate pay agreements for autonomous executives whose roles and responsibilities do not permit alignment with the collective working time/office schedule. In the United Kingdom, there exist more flexible, zero-hours contracts, under which the employer is not obliged to provide any minimum working hours but, equally, the employee has no obligation to accept the work offered.
  • The rules on post-termination provisions, such as confidentiality, non-compete and non-solicitation restrictions, vary significantly. Some jurisdictions follow a reasonableness approach (Australia, the United Arab Emirates, and the United Kingdom); others have outright prohibitions (India, Mexico, and Russia); and others mandate compensation for non-compete clauses (China, France, and Germany).

With so many nuances country-by-country, contract drafters often consider choice of law and jurisdiction clauses. Public policy considerations may, however, override such clauses. For an Italian citizen hired in Italy to work in Italy, it will be difficult to apply Australian law merely because the employer is an Australian corporation. The general rule is that the laws of an employee’s physical worksite will likely apply, regardless of such clauses.

The relevant law for all European Union countries is the Rome I Regulation. Under Rome I, foreign employees in Europe benefit from the mandatory laws of the country with which they have the closest connection, which will usually be the country where they normally work. Accordingly, a German employee working in France should receive a French law-governed employment contract, even if the employee works for a UK employing entity.

For highly mobile employees, however, the place of work is often debatable. For instance, English employment courts have decided that an employee working remotely in Australia has the right to bring an unfair dismissal claim in the United Kingdom if the work is done for a UK employer, regardless of the employee’s physical worksite.

Forum-selection provisions that call for a forum other than the place of employment tend to be unenforceable outside the United States. In London, US expatriates working under contracts with such clauses who sue before an English Employment Tribunal are unlikely to see their claim dismissed when their employer invokes the forum-selection clause.

In choice-of-forum situations, Europeans invoke the provisions of the “Recast Brussels Regulation.” These codify the general rule that employees rarely have to litigate employment disputes outside their host country place of employment, even if a choice-of-foreign-forum clause purports to require otherwise.

Communicating Global Policies

Every organisation has bespoke policies, employee handbooks, and a code of conduct. In addition, every organisation has its own HR practices, such as evaluation processes and training programmes, all dictated by the corporate culture and even corporate vocabulary. It can be challenging to extend those across borders and the legal systems of different countries.

In France, policies related to safety, disciplinary procedures, harassment, whistleblowing, etc., particularly if the policy provides sanctions, must be incorporated within internal rules (règlement intérieur), which must be filed with the employment court and inspectorate. If a company fails to file its policies correctly, it may not be able to discipline employees for violating the rules.

Country by country, companies must consider the interrelationship between the contract and the applicable policies. In some jurisdictions, it is advisable to incorporate relevant handbook policies into the contract. In the United Kingdom, for example, it is compulsory to mention disciplinary and grievances procedures in the contract.

Language Barriers

Where the policies are written is, however, merely the beginning. How they are written is much more complicated. Communicating clearly in multiple languages is now a core HR function for global entities. Many jurisdictions, such as Belgium, France, and Poland, require contracts to be in the local language, even for an employee fluent in the primary language used by the employer. If the contract is not in the local language, its provisions, the policies, and other elements, will be unenforceable, at least for the employer.

A typical example is a global bonus plan, where a failure by the employer to translate the target objectives can allow the employee to claim a bonus without needing to comply with the terms of the plan (i.e., without achieving the stated goals or objectives). This has been confirmed by French case law.

In some countries, such as Turkey, the local language will always prevail, regardless of what is provided for in the contract. In those cases, ensuring translation accuracy can avoid inadvertently granting employees more generous terms under a local translation than the company intended.

Local language translations are also required for other purposes. For instance, in Spain the employment contract needs to be filed with the government, in Spanish. In other countries, such as China, works councils and unions will need to be consulted on the implementation of policies, and submissions for those consultations will need to be in the local language.

As a result, businesses now often consider whether to create employment documents in the local language only, or in two languages. If a document is used that has two columns showing the corporate language and the local language, it is crucial to state which language prevails.

© 2019 McDermott Will & Emery

For more on employment law, see the Labor & Employment law page on the National Law Review.

Giving It Your Best Shot: Maintaining a Compliant Vaccination Program in the Healthcare Sector

Workplace vaccination programs are not new. While many focus on influenza, healthcare employers often impose more robust requirements to protect employees and vulnerable patient populations. The Centers for Disease Control and Prevention (CDC) recommends healthcare workers receive several vaccinations, including: hepatitis B; influenza; measles, mumps, and rubella (MMR); varicella (chickenpox); tetanus, diphtheria, and pertussis (Tdap); and meningococcal. Many states have enacted laws requiring such vaccinations for healthcare workers. (The CDC maintains a list of state requirements.) Indeed, because healthcare workers can be at a heightened risk for both exposure and transmission of disease to patients, families, and coworkers, prominent medical groups such as the Infectious Diseases Society of America (IDSA) recommend mandatory vaccinations consistent with CDC recommendations as part of an effective infection prevention and control program.

Recent outbreaks of vaccine-preventable diseases, such as measles and pertussis, have focused public attention on the need for employee vaccine programs. For example, the CDC reports that between January 1, 2019 and August 8, 2019, there were a total of 1,215 confirmed cases of measles in the United States, the highest number since 1994. This is despite the fact that measles was eliminated in the United States in 2000, due to an effective MMR vaccination program. The World Health Organization (WHO) reports that the rise of measles cases is likely due to a decline in people getting the vaccine. (The CDC has additional information about measles and the safety and efficacy of the MMR vaccine.)

Healthcare institutions are increasingly mandating that employees receive vaccinations, such as Tdap and MMR. But, while mandatory vaccination programs are on the rise, so are challenges from employees. Employee objections to vaccines (strengthened by misinformation about vaccines such as MMR), and thus litigation, have increased in recent years. While employers may not always have to accommodate generalized or unfounded objections to vaccinations, employees do have legally cognizable objections to being vaccinated under certain circumstances. Specifically, the Equal Employment Opportunity Commission (EEOC) takes the position that Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA) require employers to provide exemptions from mandatory vaccination policies or other accommodations to employees with religious objections and disabilities.

Just as wise employers seek to immunize their workforces from harmful pathogens, employers may also seek to immunize their vaccination programs from common legal claims. Employers may want to take into consideration the following issues:

Is the vaccination program mandatory?

Will the vaccination program be voluntary, mandatory, or a hybrid based on employee classification and work setting? Voluntary programs are attractive from the standpoint of avoiding employee objections and ADA/Title VII accommodation issues, but compliance rates may be inadequate or the healthcare setting may favor a mandatory program for some or all healthcare workers. Employers may want to consult the CDC’s recommendations, review applicable state vaccination laws, and assess the risks posed in their facilities in coordination with their infection prevention and control programs.

Is the workforce unionized?

Are nurses or other employees represented by a labor union? Employers with unionized workforces generally must bargain with the unions before imposing mandatory vaccination programs.

Who is covered?

In deciding whether to adopt a mandatory program, what is the scope of the mandate? Is it necessary to require vaccines for all employees (including clerical workers, etc.), or is it more appropriate to reserve the mandatory program for healthcare workers involved in direct patient contact or healthcare workers in vulnerable patient settings, such as the neonatal intensive care unit (NICU), pediatric intensive care unit (PICU), emergency department, or operating room? Some employers may find it more effective to implement a mandatory program with respect to a subset of healthcare workers in patient-contact roles, while offering an incentivized voluntary program to others.

Will the program permit exceptions or accommodations?

What accommodations will be permitted, and what is the process for evaluating such requests? In particular, employers should consider having a process to receive and evaluate employee requests for exemption or accommodation due to disability or sincerely held religious beliefs.

  • Under the ADA, a reasonable accommodation may be required for an employee with a disability, unless it would result in an undue hardship or a direct threat to the safety of the employee or the public. In these cases, employers can work with their infection-control team to determine the risks of exposure and transmission. For example, with employees objecting to a Tdap or MMR vaccine, the risk for a nurse working in the NICU may be very different than that of an office assistant in the back office. The ADA analysis for undue hardship and direct threat are fact specific and complicated.
  • Under Title VII, an accommodation may be required for sincerely held religious beliefs, unless doing so would pose an undue hardship. Employers should be aware that the EEOC and courts interpret “religion” broadly, and the term is not limited to major faiths but may include “religious beliefs that are new, uncommon, not part of a formal church or sect, only subscribed to by a small number of people, or that seem illogical or unreasonable to others.” Under Title VII, an undue hardship may exist where there is more than a de minimis cost or burden. The EEOC has considered several factors when determining whether an undue hardship exists, such as (1) the assessment of the public risk at that time, (2) the availability of other means of infection control, and (3) the number of accommodation requests.
  • Employers must maintain medical information and vaccination records collected from employees as confidential files in accordance with ADA requirements.
  • State vaccination laws—including where certain vaccines are mandatory for certain categories of healthcare workers—may also be relevant in designing and implementing a workplace vaccination policy.

What types of accommodations would be permitted?

Where an employer decides, after a case-by-case analysis, that an accommodation is required, it may consider is viable in the healthcare setting. Some common options include the following:

  • Requiring an employee to wear a mask, gown, or other safety gear. This option may depend on the nature of the risk, as a mask may be a reasonable accommodation for influenza in some settings, but it may not be sufficient in a setting with particularly vulnerable patients or with other pathogens that have multiple means of transmission.
  • Modifying an employee’s duties to remove at-risk activities, such as direct patient contact.
  • Temporary or permanent transfers to other positions or work areas that do not contain the same risks to patient safety.
  • Providing alternative vaccines. For example, some employees might have religious objections based on the contents of a vaccine itself, such as its use of swine products or fetal cell lines. In some cases, it may be possible to provide an alternative vaccine from a different manufacturer that does not contain the objectionable ingredient.

Healthcare employers may have legitimate reasons for requiring employee vaccinations and may want to give thoughtful consideration to federal and state employment law protections, as well as the objective medical risks applicable to specific employee groups, healthcare settings, and patient populations, before imposing sweeping mandatory policies. Such organizations may consider reviewing their vaccination programs to avoid unnecessary exposure to discrimination claims.

© 2019, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more vaccination legal considerations see the National Law Review Biotech, Food, Drug law page.

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.”

 

© 2019 Foley & Lardner LLP
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.

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.

 

© Polsinelli PC, Polsinelli LLP in California.
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.

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.

© 2019 Zuckerman Law
This post was written by Eric Bachman of Zuckerman Law.

Compliance with the New Proposed DOL Salary Threshold May Create Challenges for Many Employers

As we wrote in this space just last week, the U.S. Department of Labor (“DOL”) has proposed a new salary threshold for most “white collar” exemptions.  The new rule would increase the minimum salary to $35,308 per year ($679 per week) – nearly the exact midpoint between the longtime $23,600 salary threshold and the $47,476 threshold that had been proposed by the Obama Administration.  The threshold for “highly compensated” employees would also increase — from $100,000 to $147,414 per year.

Should the proposed rule go into effect – and there is every reason to believe it will – it would be effective on January 1, 2020.  That gives employers plenty of time to consider their options and make necessary changes.

On first glance, dealing with the increase in the minimum salaries for white-collar exemptions would not appear to create much of a challenge for employers—they must decide whether to increase employees’ salaries or convert them to non-exempt status. Many employers that reviewed the issue and its repercussions back in 2016, when it was expected that the Obama Administration’s rules would go into effect, would likely disagree with the assessment that this is a simple task. The decisions not only impact the affected employees, but they also affect the employers’ budgets and compensation structures, potentially creating unwanted salary compressions or forcing employers to adjust the salaries of other employees.

In addition, converting employees to non-exempt status requires an employer to set new hourly rates for the employees. If that is not done carefully, it could result in employees receiving unanticipated increases in compensation—perhaps huge ones— or unexpected decreases in annual compensation.

The Impact on Compensation Structures

For otherwise exempt employees whose compensation already satisfies the new minimum salaries, nothing would need be done to comply with the new DOL rule. But that does not mean that those employees will not be affected by the new rule. Employers that raise the salaries of other employees to comply with the new thresholds could create operational or morale issues for those whose salaries are not being adjusted. It is not difficult to conceive of situations where complying with the rule by only addressing the compensation of those who fall below the threshold would result in a lower-level employee leapfrogging over a higher-level employee in terms of compensation, or where it results in unwanted salary compression.

Salary shifts could also affect any analysis of whether the new compensation structure adversely affects individuals in protected categories. A female senior manager who is now being paid only several hundred dollars per year more than the lower-level male manager might well raise a concern about gender discrimination if her salary is not also adjusted.

The Impact of Increasing Salaries

For otherwise exempt employees who currently do not earn enough to satisfy the new minimum salary thresholds, employers would have two choices: increase the salary to satisfy the new threshold or convert the employee to non-exempt status. Converting employees to non-exempt status can create challenges in attempting to set their hourly rates (addressed separately below).

If, for example, an otherwise exempt employee currently earns a salary of $35,000 per year, the employer may have an easy decision to give the employee a raise of at least $308 to satisfy the new threshold. But many decisions would not be so simple, particularly once they are viewed outside of a vacuum. What about the employee who is earning $30,000 per year? Should that employee be given a raise of more than $5,000 or should she be converted to non-exempt status? It is not difficult to see how one employer would choose to give an employee a $5,000 raise while another would choose to convert that employee to non-exempt status.

What if the amount of an increase seems small, but it would have a large impact because of the number of employees affected? A salary increase of $5,000 for a single employee to meet the new salary threshold may not have a substantial impact upon many employers. But what if the employer would need to give that $5,000 increase to 500 employees across the country to maintain their exempt status? Suddenly, maintaining the exemption would carry a $2,500,000 price tag. And that is not a one-time cost; it is an annual one that would likely increase as those employees received subsequent raises.

The Impact of Reclassifying an Employee as Non-Exempt

If an employer decides to convert an employee to non-exempt status, it faces a new challenge—setting the employee’s hourly rate. Doing that requires much more thought than punching numbers into a calculator.

If the employer “reverse engineers” an hourly rate by just taking the employee’s salary and assuming the employee works 52 weeks a year and 40 hours each week, it will result in the employee earning the same amount as before so long as she does not work any overtime at all during the year. The employee will earn more than she did previously if she works any overtime at all. And if she works a significant amount of overtime, the reclassification to non-exempt status could result in the employee earning significantly more than she earned before as an exempt employee. If she worked 10 hours of overtime a week, she would effectively receive a 37 percent increase in compensation.  And, depending on the hourly rate and the number of overtime hours she actually works, she could end up making more as a non-exempt employee than the $35,308 exemption threshold.

But calculating the employee’s new hourly rate based on an expectation that she will work more overtime than is realistic would result in the employee earning less than she did before. If, for instance, the employer calculated an hourly rate by assuming that the employee would work 10 hours of overtime each week, and if she worked less than that, she would earn less than she did before—perhaps significantly less. That, of course, could lead to a severe morale issue—or to the unwanted departure of a valued employee.

 

©2019 Epstein Becker & Green, P.C. All rights reserved.
This post was written by Michael S. Kun of Epstein Becker & Green, P.C.