Category Archives: employers

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.

Corporate Crack-Down: SEC Votes to Revive Clawback Rule Stripping Executives Of Their Paychecks

Contributed by Sara M. Rose, November 3, 2021.

15390108 – two men and a magnet

The executive compensation clawback rule mandated by Congress in Section 954 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), is back.  In the event of corporate misconduct, it will enable the SEC to recoup executive compensation (i.e., bonuses or other incentive-based pay), regardless of whether the executive was directly involved in or accused of any wrongdoing.

Section 954 of the Dodd-Frank Act

The U.S. Securities and Exchange Commission (SEC) proposed an initial draft of Section 954 in 2015. Under Section 954, the SEC was to issue rules requiring companies listed on national securities exchanges to create and enforce clawback policies relating to executive compensation. The draft fell dormant shortly after issuance and was not revisited for six years.

The Revised Rule

On October 14, 2021, the SEC re-opened public comment on the clawback rule and indicated that it seeks to finalize the rule within the next year.

As currently drafted, the clawback rule will apply to all publicly listed companies—including those whose only listed securities are debt securities or preferred stock. Furthermore,  it will require companies to implement and enforce clawback policies to be triggered upon restatement of company financials due to any “material noncompliance” with securities laws. More specifically, if triggered, the company will be forced to “claw back” executive compensation previously paid in excess of the executives’ compensation under the revised financial statements. This would potentially apply to compensation paid to past and present executives in the three (3) fiscal years leading up to the restatement, regardless of whether the misstatement was due to fraud, errors, or any other factors. Executives subject to these new policies would include a broad sweep of personnel, such as the company’s president, principal financial officer, principal accounting officer/controller, any vice president in charge of a principal business unit, division, or function; and any other officer or person who performs policymaking decisions and received incentive-based compensation. 

There are two situations in which companies may exercise discretion to forego clawing back compensation from executives.  Under both situations, recovery of the compensation must be impracticable, either due to (1) the cost of recovery being more than is owed, or (2) the applicable home country laws. Making a determination of impracticability will need to be documented and conducted by a compensation committee.

Impact on Companies

If finalized, companies will be forced to act as judge, jury and executioner. In other words, companies will be responsible for determining when to clawback executive compensation and for actually enforcing its clawback policy. This is burdensome because it exposes companies to claims by the executive, as well as the SEC.

Additionally, if a company fails to comply with or enforce its clawback policy, the company will be subject to de-listing by the national securities exchanges. While the SEC would likely have some input, the national security exchange where the company is listed would be responsible for determining whether the company has made a good faith effort to comply with its policy. 

What’s Next?

It is anticipated that the SEC will seek to expand its use of the clawback rule by demanding clawbacks of executive compensation in (1) its current actions, and (2) by requiring provisions for clawbacks in private settlements involving financial restatements. In particular, this is based on the understanding that efforts to finalize this rule are part of a broader push by the SEC and the current administration to end corporate malfeasance by enhancing the tools available for penalizing executives and using tools that it has viewed as being “underutilized.” The SEC has shifted its stance on the issue in hopes of strengthening the transparency and quality of corporate financial statements, as well as the accountability of corporate executives to investors. 

Although it is possible that the rule may not be implemented as it is still under review, there is ample time for this administration to push it through the approval process.  Companies should start reviewing whether they will be subject to the clawback rule. If so, companies should evaluate their current policies and determine whether any changes would need to be made to be compliant.  In doing so, companies should work with experienced labor and employment law counsel to avoid any potential pitfalls and/or issues with such policies.

We will continue to monitor and post on the revived clawback rule throughout the comment period and approval date.

Here We Go Again: DOL Announces Final Rule Regarding Tipped Employees With Dual Jobs

Contributed by Heather Bailey and Peter Hansen, November 1, 2021

On October 29, 2021, the U.S. Department of Labor published its final rule regarding tipped employees with dual jobs (i.e., employees who perform both tipped and non-tipped work), rejecting the Trump-era approach to determining when tipped employees may be paid subminimum wages. The final rule reinstates the dreaded “80/20” rule that employers with tipped employees are likely familiar with, and adds a new “substantial amount of time” component to the determination. If you are an employer covered by the Fair Labor Standards Act, listen up!

The 80/20 Rule

Under the reinstated 80/20 rule, employees who spend at least 20% of their workweek on non-tipped job duties that directly support their tip-producing work must be paid the full minimum wage for time spent on non-tipped duties rather than the federal subminimum wage of $2.13.  [Some states require employers to pay a higher tipped minimum wage than the $2.13 allowed under federal law, including Illinois ($6.60), Missouri ($5.15), Ohio ($4.40), and Wisconsin ($2.33).  Moreover, certain locales also require a higher rate such as Chicago at $8.40 (4-20 workers) and $9.00 (21 or more workers). Employers must follow the law of whichever rate is the highest.] The final rule provides some notable insight into compliance, including:

  • Defining “tip-producing work” broadly to include “any work performed by a tipped employee that provides service to customers for which the tipped employee receives tips,” and providing specific examples for servers, bartenders, nail technicians, bussers, parking attendants, and bellhops.
  • Examples of non-tipped work that directly supports tip-producing work, including a number of tasks that employers may not previously have considered to be “directly supporting,” such as down time while the employee is waiting for customers to arrive.
  • Examples of non-tipped work that does not directly support tip-producing work, including preparing food (including salads), ordering supplies, and cleaning areas outside the worker’s normal work area (e.g., a bartender cleaning the dining room or bathroom).

Notably, any time paid at the minimum wage rate does not count towards the 20% calculation, meaning it would not impact whether the employer could claim a tip credit.  Here is an example in the final rule:

A server is employed for 40 hours a week and performs 5 hours of work that is not part of the tipped occupation, such as cleaning the kitchen, for which the server is paid a direct cash wage at the full minimum wage. The server also performs 18 minutes of non-tipped directly supporting work twice a day, for a total of three hours a week. The employer may take a tip credit for all of the time the employee spends performing directly supporting work, because this time does not exceed 20 percent of the workweek. Because this employee has been paid the full minimum wage for a total of five hours a week, the employee could perform up to seven hours of directly supporting work (35 hours × 20 percent = 7 hours) without exceeding the 20 percent tolerance.

The “Substantial Amount of Time” Rule

The new “substantial amount of time” rule applies when a tipped employee performs non-tipped duties for more than 30 continuous minutes (regardless of whether the time exceeded 20% of their workweek).  When this occurs, the employee must be paid the full minimum wage for the time that exceeds 30 minutes. Accordingly, a tipped employee who spends 45 continuous minutes on non-tipped work may still be paid at the tipped employee minimum wage for the first 30 minute period, but must be paid the full minimum wage for the remaining 15 minutes. Similarly, the employer may claim a tip credit for the first 30 minutes, but not the remaining 15.

What’s Next?

The new rule will become effective December 28, 2021, so employers in the restaurant, hospitality, and service industries should begin preparations to comply with the dual job regulations and their challenges now, especially since tipped employees appear to be an area the Department of Labor is particularly focused on.  While the previous administration tried to clear up these muddy waters, we are back here again in an industry devastated by the pandemic.  Thus, determining compliance needs to happen immediately.  For example, an employer needs to decide how they are going to track the non-tip producing work, especially the work done pre and post shift.  As always, questions regarding these issues should be directed to experienced labor and employment counsel.

The Fight for Restroom Rights – Illinois Courts Follow National Trend in Prohibiting Sex Discrimination of Transgender Employees and Requiring Equal Access to Bathrooms

Contributed by Michael Wong, August 19, 2021

16306823 – 3d illustration of scales of justice and gavel on orange background

On August 13, 2021, the Illinois Second District Appellate Court upheld the Illinois Human Rights Commission’s determination that Hobby Lobby violated the Illinois Human Rights Act (IHRA) by refusing to allow a transgender employee to use the restroom that matched her gender identity and awarded $220,000 in emotional distress damages against Hobby Lobby.

In this case, Hobby Lobby’s policy was to limit employees and customers to using the restroom that matched their designated sex at birth. The plaintiff was born a male, but during her employment with Hobby Lobby transitioned to a female. She underwent medical treatment to transition and began using a female name and coming to work in feminine dress and makeup.  She also obtained a court order legally changing her name to her female name and obtained an Illinois drivers’ license and social security card which identified her by her female name and as being a female.

Hobby Lobby changed her personnel records and benefits information to reflect that the plaintiff was a female, rather than a male.  However, Hobby Lobby continued to refuse to allow her to use the women’s restroom.  When the plaintiff used the women’s restroom, Hobby Lobby disciplined her by issuing her a written warning and ordering other employees to report her if she tried using the women’s restroom. 

While the case was being litigated, Hobby Lobby did install a unisex restroom, and allowed employees and customers to use either the bathroom corresponding to their sex or the unisex bathroom. However, Hobby Lobby continued to prohibit the plaintiff from using the women’s restroom that matched her gender identity.

The court found that the IHRA’s definition of “sex” as “status of being male or female,” is not limited to an individual’s sex at birth or genitalia.  Rather, the use of the term “status” indicates a “state of being that may be subject to change.” The court further held that by defining “sex” broadly as a status, without any reference to anatomy, birth certificates, or genetics, the Act allows for the consideration of gender identity as one of the factors that may be used to determine sex.  Based on that reasoning, the court upheld the determination that Hobby Lobby’s actions had discriminated against the plaintiff based on her “sex,” as well as gender identity.

In making this finding the court rejected a number of arguments made by Hobby Lobby including that its bathroom ban was necessary to protect other women from the plaintiff.  While Hobby Lobby made assertions regarding a complaint by a women against the plaintiff for verbal disparagement and unwanted touching, such as side hugging and touches on the arm, back and leg, and alleged complaints by two female employees that they would feel uncomfortable with the plaintiff using the women’s restroom, the court held that Hobby Lobby failed to provide any evidence to support those assertions, such as discipline or written statements, or any evidence that the plaintiff’s use of the women’s restroom would pose a safety risk to other women. Indeed, the court held that if Hobby Lobby were employing someone who genuinely posed a safety threat to others, its employees and customers would certainly demand a more effective safeguard than preventing that person from using the restroom. The court further recognized that courts have firmly rejected the argument that the fears or discomfort of others may serve as adequate justification for a discrimination policy (i.e. the presence of a transgender person in a bathroom poses no greater inherent risk to privacy or safety than that posed by anyone else who uses the restroom).

While the court’s decision could be appealed and argued along the line of Hobby Lobby’s religious beliefs, the 2020 United States Supreme Court decision that transgender employees are protected from workplace discrimination and 2021 United States Supreme Court decision to decline to hear a case in which lower courts had upheld an employee’s right to use the restroom matching their gender identity would likely support the Appellate Court’s decision.

It is noteworthy that in upholding the Illinois Human Rights Commission’s award of $220,000 for emotional distress damages, the court also remanded the matter back to the Commission for a determination of any additional damages and attorneys’ fees that may be due – thus potentially increasing the plaintiff’s damage award.

This ruling makes clear to Illinois employers that the IHRA requires employees be allowed to use the restroom that matches their current gender identity.  Additionally, it makes clear that providing a unisex restroom does not excuse an employer from still allowing an employee to use other restrooms matching their current gender identity.

It also serves as a reminder to review and consider the following actions:

  • Revising anti-discrimination policies to make clear it prohibits discrimination based on sex, gender identity (including transgender and transitioning), and sexual orientation;
  • Ensuring dress code and restroom policies are not discriminatory;
  • Implementing procedures to address when an employee discloses they are transitioning or have a different gender identity, including changing an employee’s gender on personnel records and benefit information, maintaining confidentiality of personal medical information, recognition of different pronouns, and working with the employee on what, if any, communication is made to other employees regarding the employee’s transition or gender identity;
  • Ensuring that diversity and inclusion training addresses sex, gender identity (including transgender and transitioning), and sexual orientation.

To avoid potential missteps and pitfalls, it is advised that employers consult with experienced legal counsel in addressing these issues. 

What Can Employers Do About Employees Who Refuse to Refer to Transgendered Employees By Their Preferred Names or Pronouns?

Contributed by Peter Hansen, August 6, 2021

law concept with gavel and scale in background. composition in court library

The short answer is, private sector employers can very likely terminate the employee.  If the employee is at-will, they can be fired for any non-discriminatory reason (or no reason at all); and, intentionally using the wrong name or pronoun to refer to a coworker is certainly a non-discriminatory reason.  Even if the employee has “for cause” protection through an employment contract, there’s a pretty good chance that intentionally misgendering their coworker is sufficient cause to terminate, especially if they’ve been previously warned about similar behavior.

The issue is a bit more complicated if an employee claims their religious beliefs prevent them from referring to their coworkers by their preferred names or pronouns.  Employers are generally required to accommodate employees’ sincerely held religious beliefs, but what if accommodating those beliefs – i.e., allowing them to call transgendered employees by something other than their preferred name or pronoun – requires them to discriminate against others?  The answer is pretty straightforward:  employers do not need to grant an accommodation that violates state or federal law, and as the EEOC recently noted, discrimination on the basis of gender identity violates federal law.  Put another way, where the requested “accommodation” amounts to allowing one employee to discriminate against their transgendered coworkers, the accommodation amounts to an undue hardship that employers need not (and should not) provide. Public sector employers, particularly universities, should also speak with their counsel about employees’ potential First Amendment and Free Exercise Clause protections.

The Southern District of Indiana recently reached the same conclusion as the EEOC in Kluge v. Brownsburg Community School Corporation, regarding a teacher who alleged his employer failed to accommodate his religious beliefs and retaliated against him because he refused to refer to his students by their preferred pronouns on the basis of his religious beliefs.  The court dismissed the lawsuit, noting in part that the employee’s requested accommodation would result in an “’increased risk of liability’ which in turn constituted an undue hardship” that employers need not bear.

So, employers should engage in the interactive process and at least attempt to come up with a reasonable accommodation to offer the employee.  One possible accommodation employers could consider is a “last names” accommodation whereby the employee refers to all coworkers by their last names only … though the Kluge employer offered the same accommodation and had to withdraw it after receiving complaints.  If you can think of another accommodation, I’m all ears.  Seriously, email me.  But I digress.  The takeaway is this:  regardless of an employee’s religious beliefs, employers absolutely should not allow any employee to refer to others by anything other than their preferred name and pronoun.

Reminder: Time Spent Waiting in Line to Enter or Exit Work May Be Compensable

Contributed by Peter Hansen, August 2, 2021

Many 3d people in a row but one stands out

Employers who require employees to undergo mandatory security checks, health screenings, or similar pre- or post-shift activities take note:  a growing number of courts have determined time spent waiting to undergo and actually undergoing the check or screening may be compensable under state law. 

The most recent example is the Supreme Court of Pennsylvania, which concluded that the time Amazon employees spent on their employer’s premises “waiting to undergo, and undergoing, mandatory security screening” was compensable time under state law.  That “state law” part is significant – as we noted last year, courts have routinely determined that similar time spent waiting is not necessarily compensable under the federal FLSA, but the FLSA often differs from state law in terms of activities performed before and after a shift.

Pennsylvania is the latest court to reach this conclusion – California, New Jersey, and New Mexico courts recently held that time spent waiting for and undergoing mandatory searches of employees’ bags, packages, purses, backpacks, briefcases, and so on is compensable.  We can expect more states to weigh in on this issue soon – the Eastern District of Wisconsin is currently addressing a class action lawsuit alleging that employees should be compensated for time spent undergoing COVID-19 screening.

This trend should be particularly concerning to Illinois and Wisconsin employers, given that neither state relies on federal law for guidance on compensability of pre- or post-shift activities.  However, all employers who require employees to undergo security checks or COVID-19 screening either before or after their shifts, regardless of location, should consult with trusted counsel to discuss compensation obligations.

I Don’t Want to Wear a Mask…Part 5: CDC Reversal…and School Supplies Include Masks?!?!

Contributed by Michael Wong, July 28, 2021

Vector attention sign, please wear face mask, in flat style

Just when we were starting to let loose and enjoy the summer without masks, as a result of rising number of COVID-19 cases and the Delta variant, the CDC revised their guidance for fully vaccinated individuals on July 27, 2021 with the following changes:

  • Fully vaccinated individuals are recommended to wear masks when indoors in areas of substantial or high transmission.
  • Fully vaccinated individuals who have a known exposure to someone with suspected or confirmed COVID-19 should be tested 3-5 days after exposure, and wear a mask in public indoor settings for 14 days or until they receive a negative test result.
  • Universal indoor masking for all teachers, staff, students, and visitors to schools, regardless of vaccination status.

Since OSHA adopted the CDC’s prior changes regarding fully vaccinated individuals not being required to wear masks, it is expected that OSHA will also adopt the CDC’s new guidance. 

What are Areas of Substantial or High Transmission? – It’s not a reference to a certain type of workplace (e.g. hospital), but rather the geographic county that you are in. The CDC’s COVID-19 Data Tracker shows the level of transmission and COVID-19 cases within counties and based on the CDC’s evaluation of community characteristics will identify a risk level. The CDC’s COVID-19 Data Tracker is updated on a daily basis at 8 p.m. EST with the map representing a 7 day period. Based on the current map over 63% of counties in the US are considered areas of substantial or high transmission.

What does that mean for your business? – While it is sometimes hard to turn back the clock, with the threat of OSHA violations and exposure to legal claims, employers should check whether their business falls within an area of substantial or high transmission. If the business does fall within an area of substantial or high transmission, then based on CDC guidance (and likely OSHA’s adoption), businesses will have to re-evaluate their mask policies and consider going back to requiring all individuals coming into their business wear a mask, regardless of whether they have been fully vaccinated or not.

Additionally, pursuant to the CDC guidance regardless of whether or not a business is in an area of substantial or high transmission, fully vaccinated employees who have a known exposure to someone with suspected or confirmed COVID-19 should be tested 3-5 days after exposure and wear a mask in indoor settings for 14 days or until they receive a negative test.

What risks do I face if my business ignores this guidance? – If OSHA adopts the CDC’s new guidance (which it is expected to do), and your business is located in an area of substantial or high transmission, you will be expected to require all employees and visitors, regardless of vaccination status, to wear a mask indoors. If you do not make changes and still allow employees, customers and visitors to go maskless indoors you will face potential fines from OSHA. Additionally, if there is an outbreak in your facility or one of your employees, customers or visitors claims that they contracted COVID-19 at your business, you could face civil claims (including workers’ compensation claims) which would be more difficult to defend based upon you not complying with the CDC and/or OSHAS’s current standard.

Impact on K-12 Schools – School Administrators that have been working long hours to figure out whether or not students and staff have to be masked, just got the answer to that question for this fall. The CDC’s guidance states children in K-12 should return to full-time in-person learning, but that all teachers, staff, students and visitors to K-12 schools, regardless of vaccination status, should wear masks indoors.

State and Local – The trickle down effect of the CDC’s new guidance will not just impact OSHA’s requirements, but those at the state and local levels. As such in the coming days businesses will need to keep up to date with local guidance. For the immediate future, businesses should anticipate being faced with state and local guidance that provide fully vaccinated individuals do not need to wear masks, while the CDC guidance states the opposite. In looking at those conflicts, businesses should recognize that the state and local guidance will likely be updated to comply with the CDC’s guidelines, much like it has in the past.

How to Address? – Businesses are now faced with the impossible task of addressing guidelines that can potentially change on a weekly basis. There is no simple answer.  For businesses that are in a county that is currently considered an area of substantial or high transmission, the best practice will be to err on the side of safety and require employees, customers and visitors to wear masks when indoors. This minimizes the potential risk and exposure to legal claims, while also protecting the business’s workforce from the surge in COVID-19 cases and the Delta variant. In this day and age where maintaining a workforce and recruiting employees is already difficult, keeping one’s workforce intact and working is of utmost importance.

Businesses will also be faced with potential issues in communicating and/or enforcing the new guidelines. When the CDC and OSHA issued the “mask free” announcement it was relatively easy for businesses to take down signs and allow customers, visitors and employees to not wear a mask if they were fully vaccinated. With the CDC backtracking, businesses will be faced with the same issues and problems from when mask mandates were instituted (e.g. viral video of customer and employee confrontations over not wearing masks). Even more problematic is how often will the business want to change its policy and procedures, with the understanding that whether or not the business is located in an area of substantial or high transmission could change on a daily or weekly basis.

Communicating your decision on how to address this issue and whether you will be updating your policy on a regular basis to stay in line with areas of substantial or high transmission, or are simply re-instituting your mask policy, will be key. Likewise training employees on addressing, managing and de-escalating conflicts with customers and other employees will play a major role in addressing these issues, while minimizing potential problems. With these changes, employers must also recognize their obligations to provide reasonable accommodations to employees based on a disability or religious belief. Needless to say, just when we felt we were getting out, we’ve been pulled back into the pandemic life.  

As these issues continue to change and evolve it will be important for businesses to consult with legal counsel experienced and knowledgeable in labor and employment law to help you continue to evolve your business for success during these times.

New Oregon Non-Compete Law Further Restricts Non-Competes

man is signing non compete agreement

Contributed By Jeffrey Glass, May 25, 2021

Over the past several years, the State of Oregon has enacted significant statutory limits on non-compete agreements. Under ORS 653.295, as in effect until recently, a non-compete was “voidable and [could] not be enforced by a court of this state” unless:

  • The employer advised the employee in a written employment offer at least two weeks before the first day of employment that a non-competition agreement is required, or the non-competition agreement is executed upon the employee’s bona fide advancement;
  • The employee is exempt from Oregon minimum wage and overtime law;
  • The employer has a protectable interest, which is generally limited to access to trade secrets or competitively sensitive confidential information;
  • The employee makes more than the median family income for a family of four as determined by the U.S. Census Bureau;
  • The employer provided the employee with a signed copy of the agreement within 30 days after the last day of employment; and
  • The duration of the non-compete does not exceed 18 months.

Importantly, the restrictions described above generally do not apply to covenants to solicit customers or employees of the prior employer.  Additionally—and notwithstanding the foregoing restrictions—Oregon allows “bonus restriction agreements,” a type of restriction, permitted only for managers and other employees with significant client contact and high-level knowledge of the employer’s business operations, which provides that the employee may forfeit limited types of bonus income, such as profit sharing, if the employee violates post-employment covenants that are reasonable in time and geographic scope.

Under the amended statute, enacted through Oregon Senate Bill No. 169 which was signed into law by the Governor of Oregon on May 21, the existing restrictions will become even more aggressive.  The new rules include:

Instead of non-competition agreements being “voidable” by a court, the new law makes them “void and unenforceable” unless statutory conditions are met. 

The new law shortens the maximum period of restriction for non-compete agreements from 18 months to 12 months.  This requirement does not apply to covenants not to solicit employees or customers.

The amendments increase the income threshold for enforcement of non-compete agreements to $100,533, adjusted annually for inflation.  In contrast, the prior version of the statute used the median income of a family of four per the U.S. Census Bureau.  This requirement does not apply to covenants not to solicit employees or customers.

The new law also provides that, notwithstanding the various limitations on non-compete agreements, a non-compete agreement is generally enforceable for up to 12 months if the employer agrees in writing to provide the employee, for the period of restriction, with the greater of at least 50% of the employee’s annual gross base salary and commissions at the time of termination, or 50% of $100,533, adjusted annually for inflation. 

We will continue to monitor legislative developments in Oregon and the many other states where non-compete agreements are the subject of increasing legislative scrutiny. 

UPDATED: I Don’t Want to Wear a Mask…Part 4: OSHA Weighs In!

Contributed By Michael Wong, May 17, 2021

Blue medical face masks isolated on white

***On May 17, 2021, OSHA updated its web page regarding “Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace” to state the following:

“The Centers for Disease Control and Prevention (CDC) has issued new guidance relating to recommended precautions for people who are fully vaccinated, which is applicable to activities outside of healthcare and a few other environments. OSHA is reviewing the recent CDC guidance and will update our materials on this website accordingly. Until those updates are complete, please refer to the CDC guidance for information on measures appropriate to protect fully vaccinated workers.”

The CDC’s May 13, 2021 guidance “Interim Public Health Recommendations for Fully Vaccinated People” states that fully vaccinated people can “Resume activities without wearing masks or physically distancing, EXCEPT where required by federal, state, local, tribal, or territorial laws, rules and regulations, including local business and workplace guidance. Fully vaccinated people should also continue to wear a well-fitted mask in correctional facilities and homeless shelters. Prevention measures are still recommended for unvaccinated people.”

However, the CDC has not made any changes to its workplace guidance regarding the use of masks. In particular, the CDC still advises employers to “encourage employees to wear face coverings in the workplace, if appropriate”, and does not differentiate between those who have been vaccinated and those who have not. 

Finally, even though the CDC and OSHA have issued this guidance, a patchwork of state and local policies or rules are popping up making it clear that an “across the board” mask-free workplace is not without legal risk for employers.

What does this mean for the workplace?

OSHA’s updated reference to the CDC’s guidance has essentially made this issue a little more clear. In doing so though, OSHA and the CDC has opened the door to employers and businesses allowing employees to be in the workplace without a mask, if they are fully vaccinated, but has not provided any guidance or direction on how to do so. The risk of OSHA issuing a fine or penalty on this issue has been reduced as long as the company is taking common sense steps to protect its employees, which could include (i) requiring verification or confirmation by employees that they have been fully vaccinated before allowing them to be mask free in the workplace; and (ii) modifying guidance to allow employees who have been vaccinated to not wear a mask in the workplace, unless interacting with or in a part of the business where there are customers, clients or the public.

In considering revised policies, employers should remember that there is still risk from workers’ compensation claims. While being vaccinated reduces the possibility of getting COVID-19, if an employee is not wearing a mask in the workplace and gets COVID-19, the employer could still face a workers’ compensation claim that the employee got COVID-19 at work. 

With respect to customers or clients coming into the business, the issue is even muddier, as the CDC and OSHA guidelines are unclear on what is expected of businesses and employers at this point. For example, if a business allows customers or clients into the business without a mask, do they have to verify that they have been vaccinated? Moreover, there is no guidance on what questions a business could ask a customer or client to confirm if he or she has been vaccinated. 

As such, this still means that training, education and communicating with employees and customers will be vital within the next few weeks and months. Many employees and customers will hear about the federal “unmasking,” but will not understand that it does not apply to employers or businesses based on state or local requirements or guidelines.

Training for employees should include methods on addressing, managing and de-escalating conflicts with customers and between employees. In particular, re-emphasizing and educating employees on how to communicate the business’ policies and more importantly the reason why the business’ policies may not have changed.

Finally, don’t forget that employer and business obligations regarding reasonable accommodation of disabilities and religious beliefs under the ADA and Title VII are still in place.

Due to the complexity and interplay of federal, state, local, tribal or territorial laws, rules and regulations, including CDC, OSHA and state and local health departments and governments, it is important to use legal counsel experienced and knowledgeable in labor and employment law to help you navigate these waters.

For further information on this matter, keep an eye out for our timely webcast, “Mask Mandate Mayhem! A Briefing for Confused Employers” on Monday, May 24th at Noon CT.  

EEO-1 Report Portal Opening Soon – Deadline is Set

hand with pen over form

Contributed by Beverly Alfon, April 16, 2021

The Equal Employment Opportunity Commission’s (EEOC’s) EEO-1 Component 1 Online Filing System is set to open on Monday, April 26, 2021. Private employers with at least 100 employees, and federal contractors with at least 50 employees and a contract worth $50,000 or more, must file their EEO-1 data for years 2019 (previously postponed due to the COVID-19 pandemic) and 2020, by Monday, July 19, 2021. Employers will be required to first file for 2019, then file for 2020 – after the 2019 report is submitted and certified.

As a reminder, EEO-1 reports require data from a “workforce snapshot period,” which is any single pay period during the last quarter of the year (October through December), as selected by the employer.  Employers may select different workforce snapshot pay periods for 2019 and 2020. 

Employees who telework must also be included in the EEO-1 report for the establishment to which they report. Practical tip: Do not include home addresses for these remote employees as a company location.

The 2019 and 2020 reports will only include “Component 1” data, which is comprised of the same workforce demographic information that has long been required on the EEO-1. As of right now, the controversial “Component 2” pay data information does not need to be reported to the EEOC. Last year, the EEOC did not renew its authority to collect the pay data information and is still evaluating the Component 2 data that it received for FY 2017 and 2018 to determine whether or not the information is useful, and whether or not the data collection form needs to be revised. 

It should also be noted that the U.S. Congress also could act on legislation pending in the form of the Paycheck Fairness Act, which would require the EEOC and the Office of Federal Contract Compliance Programs (OFCCP) to initiate pay data collection.

In the meantime, some states have implemented their own pay data collections. California has completed its first round of collection under the state’s pay data collection law, and Illinois has enacted a law that requires employers in the state to submit pay data starting in 2023 (and obtain an equal pay registration certificate by March 24, 2024). Notably, Illinois employers who are required to file a federal EEO-1 report, will also be required to file similar information with the Secretary of State, making the data publicly available.    

Bottom line: Employers should be prepared to begin submissions of their EEO-1 reports for 2019 and 2020 as soon as possible. Don’t stop there. Evaluate your EEO-1 data and strongly consider pay equity analysis, with the goal of identifying and correcting any potential issues, sooner rather than later.