California Law Alert – Employment Agreements Subject to New Restrictions

Contributed by John R. Hayes, January 20, 2022

State of California

Signed into law on October 7, 2021 by California Governor Gavin Newsom and effective January 1, 2022, the “Silenced No More Act” amends and expands the previous Stand Together Against Non-Disclosures (STAND) Act. 

The STAND Act was passed in 2018 in the wake of the #MeToo movement and focused specifically on claims of sexual harassment and discrimination or retaliation based on sex.  The new law goes beyond the STAND Act’s focus on sex discrimination and harassment, and expands its protections to any characteristic protected under California law. For example, this would include claims based on race, religion, national origin, disability, age, and various other protected characteristics under California law. 

Below are some key requirements of the new law depending on the type of agreement.

Negotiated settlement agreements to resolve an underlying claim filed by an employee in a court, administrative agency, alternative dispute resolution forum, or the employer’s internal complaint process:

  • Cannot contain confidentiality provisions that prevent an employee from disclosing information regarding the claim.
  • At the employee’s request, an agreement may include a provision that shields their identity and facts that could lead to the discovery of their identity, except if a government agency or public official is a party to the settlement agreement.
  • Employers can still prevent the disclosure of amounts paid in settlement.

Employment separation and non-disclosure agreements (other than negotiated settlement agreements):

  • Prohibits confidentiality and non-disparagement provisions in employment separation and nondisclosure agreements that have the purpose or effect of restricting disclosure of information about harassment, discrimination, or other workplace conduct the employee believes is unlawful, for any protected characteristic.
  • Employers must include the following disclaimer in the non-disparagement clause or other contractual provision that restricts an employee’s ability to disclose information related to conditions in the workplace:
    • “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
  • For all employment separation agreements (other than negotiated settlement agreements) the employer must:
    • Notify the employee that the employee has a right to consult an attorney regarding the agreement; and
    • Provide the employee with a reasonable time period of not less than five business days in which to consult an attorney. An employee may sign the agreement prior to the end of the five-day period if the decision to do so is knowing and voluntary and not induced by the employer through fraud, misrepresentation, a threat to withdraw or alter the offer, or by providing different terms if an employee signs prior to the expiration of such time period.

While these requirements are hardly earth-shattering, if a California employer is using a template from another state, or one from several years ago, they may not be in compliance with the new law. 

Consequently, in California, if an employer is entering into a settlement agreement to resolve any claims of discrimination, retaliation or harassment (sex-based or not), then the agreement cannot include non-disclosure language related to the actual claim(s). Also, employers in California should ensure all employment agreements that include non-disclosure obligations contain the necessary disclaimer, and that any separation agreements contain language expressly giving the employee the right to consult an attorney and that they have no less than five business days to do so. 

Updated Deadlines for COVID-19 Vaccine Mandate for Health Care Workers

Contributed by Suzannah Overholt, January 17, 2022

Filling syringe with medicine from vial, closeup

On January 14, CMS issued guidance regarding when the COVID-19 vaccine mandate for health care workers will be enforced in the 24 states affected by the Supreme Court’s ruling issued the previous day. Those states are Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Utah, West Virginia and Wyoming. 

By February 15, 2022, covered facilities must demonstrate that:

  • Policies and procedures are developed and implemented for ensuring all facility staff, regardless of clinical responsibility or patient or resident contact, are vaccinated; and
  • 100% of staff have received at least one dose of the COVID-19 vaccine or have requested or been granted an exemption from vaccination. (If less than 100% of all staff meet this requirement, the facility is non-compliant.)

By March 15, 2022, covered facilities must demonstrate that 100% of staff have received the necessary doses to complete the vaccine series (i.e., one dose of a single-dose vaccine or all doses of a multiple-dose vaccine series), or been granted an exemption from vaccination. (If less than 100% of all staff meet this requirement, the facility is non-compliant.) 

Facilities failing to maintain compliance with the 100% standard on and after April 14, 2022, may be subject to enforcement action. Surveyors will begin monitoring for compliance on February 15, 2022. We discussed additional details of the vaccine mandate in our previous post on the topic.

CMS also issued guidance specific to each type of facility covered by the vaccine mandate.   

Note that on December 28, 2021, CMS issued guidance regarding the effective dates for the other states (excluding Texas), which are January 27, 2022 (first round of vaccine), and February 26, 2022 (full vaccination). 

All facilities covered by the CMS vaccine mandate for health care workers should be working to implement their vaccination and exemption policies and getting their staff vaccinated so they are in compliance with the relevant deadlines. We will continue to provide updates on this important issue.

CMS Health Care Vaccine Mandate Allowed by U.S. Supreme Court

Contributed by Suzannah Overholt, January 13, 2022

Ending months of uncertainty, today the Supreme Court issued its decision allowing CMS to enforce its vaccine mandate for healthcare workers. The Court’s decision stays the injunctions entered by federal courts in Missouri and Louisiana. CMS may now enforce the rule nationwide. Before today’s decision, the CMS rule could only be enforced in 26 states. 

As a refresher on what the CMS rule requires, see our previous summary of the rule. Further guidance should be issued by CMS before compliance is required. We will continue to keep you updated.

In another opinion issued today, the Court decided that OSHA’s “shot or test” rule for large employers may not be enforced. Read more about this decision on our blog.

OSHA’s Emergency COVID-19 Vaccination and Testing Standard Blocked

Contributed by Matthew Horn, January 13, 2022

In a 6-3 decision just released, the Supreme Court blocked OSHA’s Emergency COVID-19 Vaccination and Testing Standard (“ETS”) from taking effect, which required employers with one hundred or more employees to conduct weekly testing of all unvaccinated employees, amongst other things. 

While procedurally, the ruling merely reinstituted the stay of the ETS, the ruling signaled the final outcome for the ETS, finding more broadly that the ETS went beyond OSHA’s authority. The Court stated: “[a]lthough Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly. Requiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the latter category.”

Moving forward, we will continue to keep you advised as to all relevant updates relating to the ETS—and any revised ETS that OSHA attempts to issue in light of the ruling.

Biden’s Insurance Plan Mandate to Cover At-Home COVID-19 Tests, But Not for Employment Purposes

Contributed by Kelly Haab-Tallitsch and Sara Zorich, January 13, 2022

President Biden announced on January 10th that the Biden-Harris Administration is requiring insurance companies and group health plans to cover the cost of over-the-counter (OTC), at-home COVID-19 tests. Beginning January 15, 2022, individuals with private health insurance coverage or covered by a group health plan who purchase an over-the-counter COVID-19 diagnostic test authorized, cleared, or approved by the U.S. Food and Drug Administration (FDA) will be able to have those test costs covered by their plan or insurance. Insurance companies and health plans are required to cover 8 free over-the-counter at-home tests per covered individual per month.

In the Department of Labor(DOL) FAQs issued January 10, 2022, Q1 states, “This FAQ does not modify previous guidance** addressing coverage for purposes not primarily intended for individualized diagnosis or treatment of COVID-19, including the guidance that states that plans and issuers are not required to provide coverage of testing (including an OTC COVID-19 test) that is for employment purposes.” 

Additionally, Q4 provides that plans and issuers can take reasonable steps to ensure an OTC COVID-19 test was purchased for the individual’s own personal use, including requiring an attestation that the test was purchased for personal use and not for employment use.  

** The previous guidance referenced above is the DOL FAQs issued in February 2021 that states plans and issuers are required to cover COVID-19 diagnostic testing of asymptomatic individuals when the purpose of the testing is for individualized diagnosis or treatment of COVID-19, but not for public health surveillance or employment purposes.

The Bottom Line: While we are waiting to find out how insurance companies will handle this, we expect they will take steps to exclude tests for employment now, even if they hadn’t so far. Unfortunately employers shouldn’t rely on this to help with out of pocket testing costs.

DOL and NLRB Agree to Share Information and Counsel Employees on Overlapping Enforcement Matters

Contributed by Sara M. Rose, January 12, 2022

Scales of Justice, Weight Scale, Balance.

On January 6, 2022, the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB) released a signed Memorandum of Understanding (MOU) detailing the agencies’ most recent pact to enforce federal labor and employment laws.

The partnership intends to ensure that workers receive proper wages and are able to take collective action to improve working conditions without fear of retaliation. The MOU outlines several procedures on information-sharing, joint investigations and enforcement activity, and training meant to strengthen the agencies’ partnership and enhance enforcement of the laws that they administer. The collaboration also seeks to allow for better enforcement against unlawful pay practices, misclassification of workers as independent contractors, and retaliation against workers exercising their legal rights.

Under the MOU, a formal referral process for violations of federal labor and employment laws will be established, making it easier for the government to pursue employers who have breached laws enforced by both agencies. In other words, the agencies have agreed to share any information or data that “supports each agency’s enforcement mandates,” including complaint referrals and information in investigative files. The agencies have also agreed to advise employees, directly, when “unlawful conduct [may] fall within the jurisdiction” of the other agency. For example, if the DOL uncovers conduct that it believes may violate the National Labor Relations Act (NLRA), while investigating an employer, it will advise employees of the potential opportunity to file charges with the NLRB.

The agencies also pledge to share information regarding the following topics:

  • Unlawful compensation practices,
  • Retaliation based on the exercise of rights guaranteed by the NLRA or laws enforced by the DOL/Wage and Hour Division (WHD),
  • Discriminatory failure to hire, and
  • The “identification and investigation of complex or fissured employment structures, including single or joint employer, alter ego, and business models designed to evade legal accountability.”

The partnership is the Biden administration’s latest attempt to fortify its enforcement posture against businesses’ practice of misclassifying workers as independent contractors in order to avoid the obligations and coverage of federal, state, and local laws.  Under the pact, the agencies have announced initiatives to train staff to identify cases and issues that may arise under the other’s jurisdiction, joint participation in regional presentations and to develop shared training materials and programs.

The MOU took effect on December 8, 2021 and, absent renewal, will expire in five (5) years. Employers must take care to comply with all federal labor and employment laws, especially given that the DOL and NLRB appear to be particularly focused on tipping employees off on additional opportunities to make legal claims against their employers. Questions regarding these issues should be directed to experienced labor and employment counsel. As always, we will continue to monitor and post on any matters involving this new partnership.

NOW is the Time to Assess H-1B Visas for 2022!

Contributed by Jacqueline Lentini McCullough, January 10, 2022

11411781 – photograph of a USCIS logo and American flag.

With the New Year upon us, it is time to begin the initial H-1B process for any interested companies or organizations with foreign workers. Now is the time to see if anyone will need assistance with an H-1B petition. 

In 2019, USCIS implemented a new electronic registration system for employers seeking to file H-1B cap-subject petitions for foreign national employees. Last year, the registration period for foreign nationals ran from March 9 to March 25, 2021. We anticipate a similar timeframe this year. Once the registration period is over, the US Citizenship and Immigration Service will then run a random selection process on those electronic registrations. Only employers with selected registrations will be eligible to file H-1B cap-subject petitions. Following the selection process, employers will have a 90-day window to file the case(s) selected. If insufficient H-1B cap-subject petitions are received by USCIS from the initial selected registrations, then they may conduct a second or even a third lottery as has been done in the past.

It is therefore important for employers to assess who among their foreign nationals will need a change of status to H-1B, and will need to be registered in the government system as soon as possible.

Register Now! January 20, 2022: Seventh Annual Complimentary Construction Industry Legal Power Seminar

SmithAmundsen invites you to a complimentary virtual seminar on Thursday, January 20 at 8:30 AM CT. The seminar highlights key legal issues and developments impacting the evolving construction industry in 2022. Matthew Horn, Jeff Risch and Brad Goss will cover everything from COVID-19 regulations and supply chain delays, to OSHA and labor and employment law updates.
Topics to be discussed, include:

  • Addressing material shortages, labor shortages and supply chain delays in contracts
  • Updates to OSHA regulations in 2022
  • Recruiting and retaining employees
  • COVID-19 mandates and updates
  • Key labor and employment law updates
  • Real estate development, zoning and leasing issues

Who should attend? Construction Industry CEOs, COOs, CFOs, Accountants, Human Resource Managers, Safety Consultants, Claims Professionals and Risk Managers.

Save the date! Complimentary Webcast January 10, 2022: COVID-19 Testing: What Employers Need to Know

While employers continue to review their COVID-19 protocols under various government vaccine mandates (including OSHA’s ETS) as well as their own policies and practices and customer requirements, testing continues to be a confusing topic for many. From the types of testing that can be relied on to satisfy such obligations to whether an employer must pay for such testing, there is a tremendous amount of uncertainty for employers trying to navigate their processes and policies related to employee testing. Additionally, testing capacity and supply is also a growing concern. 

Please join Jeff Risch and Sara Zorich on January 10 for a one hour webcast at Noon CT for a practical discussion on what is required of employers in adopting a testing program and how to efficiently and effectively comply with the onslaught of new obligations concerning the same in today’s environment.

OSHA’S COVID-19 Vaccine Mandate is Back on!

Contributed by Sara Zorich and Jeff Risch, December 20, 2021

Filling syringe with medicine from vial, closeup

On December 17, 2021, in a 2-1 decision, the 6th Circuit Court of Appeals dissolved the stay of OSHA’s Emergency Temporary Standard (ETS) previously ordered by the 5th Circuit Court of Appeals. Therefore, OSHA’s ETS mandating workplace vaccination and testing on all private employers with 100 or more employees is back on. While the 6th Circuit did not address timing issues, the day after the decision was released, OSHA announced that it will not issue citations for noncompliance with any requirements of the ETS before January 10, 2022 and will not issue citations for noncompliance with the standard’s testing requirements before February 9, 2022 — so long as an employer is exercising reasonable, good faith efforts to come into compliance.

As you may recall, soon after the ETS was published back on November 5, 2021, the 5th Circuit issued a scathing opinion staying the enforcement of the ETS – which had essentially implemented a January 4, 2022 deadline for the “get the shot or test” requirement.  In the week that followed, legal challenges were brought in every other Circuit Court of Appeals across the country. On November 16, 2021, the matter was assigned through a lottery system to the 6th Circuit. With the 6th Circuit’s decision now in place, the matter has now moved to the U.S. Supreme Court for possible review. The Supreme Court does not have to take on the merits of the matter and could simply allow the 6th Circuit’s decision to stand as is.   

So, what should private employers with 100+ employees do now? 

By January 10, 2022, you will need to implement the following:

  1. Finalize and publish your COVID-19 vaccine policy to all employees (this includes clear messaging that anyone who tests positive for COVID -19 or is diagnosed shall immediately provide notice to their employer and shall refrain from entering the workplace until they meet criteria set by the CDC).
  2. Distribute and publish to all employees the following notices:
    1. Workers’ Rights under the COVID-19 Vaccination and Testing ETS
    2. Information for Employees on Penalties for False Statements and Records
  3. Finalize your Vaccination Roster — obtaining proof of and confirming who is fully vaccinated and who is not — in a confidential manner.
  4. Provide Paid Leave for anyone obtaining the vaccine (note: boosters do NOT count) (up to 4 hours per shot).
  5. Permit a “reasonable amount of time” (i.e. up to 2 days) of paid leave for the recovery from any ill-effects of any vaccination dose.
  6. Mandate that face coverings must be worn by anyone who is not fully vaccinated at all times (unless isolated in an office with four walls and a ceiling).

Then, by February 9, 2022, you will need to: A) require all employees to be fully vaccinated (note: boosters are NOT relevant under the current ETS); and/or B) require all unvaccinated employees to submit to weekly testing.  Under the ETS, employees who are exclusively working remotely or predominately working outside are not subject to these requirements. 

Note, employers must review state and local vaccine requirements and laws when preparing their vaccine policy.  Many state and local laws have been enacted since the original ETS was issued and these laws/regulations might be more stringent, contain different deadlines than the OSHA mandate or may place restrictions on employers who issue a mandatory vaccination policy.

SmithAmundsen’s Labor & Employment, Healthcare and OSHA practices will continue to monitor these developments.