A year ago we all became a remote workforce almost overnight. Now, while many offices are beginning to open, some employees are asking to remain working remotely. Before saying yes, be sure that you know the right questions to ask to avoid the many landmines that could accompany a continued, remote workforce or even future short-term remote work arrangements.
Join us on Wednesday, June 23 at noon CT as Molly Arranz, Meredith Murphy, Tom Pienkos, and Sara Zorich from our Data Security, Tax, IP, and Employment groups discuss several hypothetical remote work scenarios, lessons learned from the past year and how to troubleshoot potential issues including:
On-boarding, Form I-9/E-verify compliance, leave laws and other practical considerations
Effective May 25, 2021, the State of Nevada enacted amendments to the Nevada Unfair Trade Practice Act that address non-compete agreements. Prior to the new amendments, Nevada law provided that a non-competition covenant is deemed void and unenforceable unless: it is supported by valuable consideration, it does not impose any restraint that is greater than required for the protection of the employer, it does not impose any undue hardship on the employee, and it imposes restrictions that are appropriate in relation to the valuable consideration supporting the non-competition covenant. These provisions of the statute were not amended and therefore these rules still apply in Nevada.
The statute, prior to the recent amendments, also provided that a non-competition covenant may not restrict a former employee from providing service to a former customer or client if the former employee did not solicit the former customer or client, if the customer or client voluntarily chose to leave and seek services from the former employee, and if the former employee is otherwise complying with the limitations of the covenant as to time, geographic scope, and scope of activities restrained. The new legislation amends this provision slightly to provide not only that a non-competition covenant may not restrict this type of activity, but that an employer may not bring an action to enforce such a restriction. This would appear to be merely a clarification of existing law.
The new legislation also provides for the first time that a non-competition covenant may not apply to an employee who is paid solely on an hourly wage basis, exclusive of any tips or gratuities. This is similar to many states that have sought to ban or severely restrict restrictive covenants for low wage employees.
Prior Nevada law provided that a court “shall” revise an overbroad covenant to render it reasonable. The new legislation modifies this slightly to clarify that this type of “blue pencil” approach applies where the employer brings an action to enforce the covenant, or where the employee brings an action to challenge it. It also emphasizes that the undue hardship on the employee must be considered. Again, this is a subtle revision that is apparently intended to make sure that the former employee’s interest in avoiding undue hardship is given due consideration by a court interpreting the statute.
The new legislation also contains a new section which provides that, if either an employer or an employee brings an action to enforce or challenge a non-competition covenant, and the court finds that the covenant either applies to an hourly wage employee or attempts to restrict an employee from dealing with former customers whom the employee did not solicit, that the court “shall” award the employee reasonable attorney’s fees and costs. This, too, is similar to legislation that has been passed in other states that seek to level the playing field for the benefit of former employees by providing them with fee-shifting even if the contract does not provide for it.
Overall, the new Nevada legislation makes modest but real improvements for former employees, and follows the clear trend across the country to ban non-competes for low wage employees and give employees the right to recover attorney’s fees in this type of litigation.
We will continue to monitor legislative developments on non-competes across the country.
With the upcoming Memorial Day holiday offering an opportunity to acknowledge and appreciate the sacrifice made by military families, it seemed a fitting time to revisit the legal nuances of providing preference in hiring veterans with disabilities. Veterans report high instances of service-connected disabilities, including blindness, deafness, missing limbs, major depressive disorder, and post-traumatic stress disorder. Some laws require employers to provide preference to disabled veterans. Some employers voluntarily create affirmative action programs for veterans with disabilities. Here is what employers should know.
Can an employer give preference in hiring to a veteran with a disability?
Yes. There is no law that prevents an employer from voluntarily creating a program that gives preference in hiring to qualified veterans with disabilities. Moreover, there are various laws in place that may require an employer to provide affirmative action to veterans. For example, the Vietnam Era Veteran’s Readjustment Assistance Act (VEVRAA) requires all business with a federal contract or subcontract exceeding $100,000 to take efforts to employ and advance veterans with disabilities. The Uniformed Services Employment and Reemployment Rights Act (USERRA) requires employers to make reasonable efforts and accommodations to return veterans with service-connected disabilities to their position prior to military service or to help qualify the veteran for a job of equivalent seniority, status, and pay.
May an employer ask if an applicant is a disabled veteran?
Yes. While the Americans with Disabilities Act (ADA) generally prohibits employers from making medical inquiries, they may do so for affirmative action purposes. Therefore, an employer may ask applicants to voluntarily self-identify as a veteran with a disability if it is collecting this information to undertake affirmative action required by a veterans’ preference law, or to provide benefits to these applicants through the employers’ own voluntary program.
If an employer requests that applicants self-identify as a veteran with a disability, the request must clearly state that this information is intended for use solely in connection with its legal affirmative action obligations, or voluntary affirmative action efforts. Employers should also confirm with the applicants that the information will be kept confidential, and that the applicant’s decision to disclose this information is completely voluntary. Keep all records of disability-related information in a separate, confidential file.
What are some steps that employers can take to attract, recruit, and hire veterans with disabilities?
Job postings and advertisements may encourage veterans with disabilities to apply and should explicitly state that the organization is an equal opportunity employer.
Employers may send job opening information to organizations that job-train veterans and assist veterans with finding employment.
Employers may attend job fairs that connect employers with qualified veterans searching for work.
Employers should review all language used in job postings to make sure that nothing would dissuade a veteran with a disability from applying. Job postings should not include language calling for “excellent health” or listing required physical abilities if an individual with a disability would be able to accomplish the job function differently through an accommodation.
Employers must provide accommodations to veterans with disabilities in the application process where necessary. For example, employers should provide applications and other written materials in an accessible format, whether that be in large print, Braille, or electronically. Employers should also conduct interviews in accessible locations.
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.
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.
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.
The short answer is: Be careful what you wish for! During this COVID-19 pandemic, vaccinations have been at the front of everyone’s mind. Now, with the mass rollout of vaccinations across the country, employers’ main questions have been: i) Can we mandate vaccinations for our workforce or, alternatively, ii) can we ask employees whether they have been vaccinated or not (and to show proof of vaccination)? Our Labor & Employment blog has been at the forefront for the first question and provides more information on COVID-19 vaccination developments and what legal risks come into play for employers when mandating the vaccine in the workplace.
The good news is that generally asking your employees for proof of their vaccination status is not considered a medical exam for reasons that include the fact that there are many reasons that are not disability-related that may explain why an employee may or may not have gotten a vaccination. For example, they may not have one yet because they have been unable to secure an appointment, or they simply do not believe in the vaccination because they think COVID is a hoax. This is different from someone not getting vaccinated due to a disability or religious belief. Moreover, this general practice is not a HIPAA violation and HIPAA does not apply in this context. The rub and risk come if you ask follow-up questions that may elicit whether the employee may have a disability. Simply following-up with “why do you not have the vaccination yet?” could be treading into that risky territory that touches on whether an employee’s disability is the reason why the employee has not been vaccinated.
If you find yourself in that territory, you will have to evaluate the employee’s response within the framework of the Americans with Disabilities Act (ADA) (or Title VII, if the employee’s response implicates religious beliefs) requirement to justify proof of vaccination being “job-related and consistent with business necessity.” This is the same analysis an employer must undertake when mandating vaccinations, and it can be a tedious and high standard to meet. View the Labor and Employment Blog for more information on the ADA and employers’ efforts to require mandatory vaccinations and health screenings for employees.
The same is true of follow-up questions that may elicit genetic information (e.g., I cannot get the vaccination due to my family’s history of being immuno-compromised). (See Sections K.8 and K.9 of the EEOC guidance described above). Once again, simply asking for vaccination proof does not run afoul of the Genetic Information Nondiscrimination Act (GINA) so long as you stop there in your inquiries.
Again, be careful what you wish for. It’s one thing to ask the employee whether they were vaccinated and to show proof, and it’s another to ask why they were not vaccinated. Once you start eliciting disability, religious or genetic information with follow-up questions, you are placing your company at risk of knowing more information than you may have bargained for.
You need to ask yourself, first, why do I want to know information regarding why my employees have been vaccinated or not? What are you going to do with this information? Having a need and plan for this information will help ensure you have a business justification for why this information is necessary. If you don’t have a plan or a need, you may determine that knowing this information is not really necessary after all.
When asking employees to show proof of vaccination, it is good to remind them that you do not want them to include any other medical information that may be listed on their vaccination-related documents.
If you determine this is the route you want to take, always work with competent labor & employment counsel to help guide you through the process so you do not step on any landmines (even if it’s just a simple follow-up question).
On September 4, a Federal Appeals Court upheld a National Labor Relations Board (NLRB) decision finding management comments to employees during the early stages of a union organizing campaign unlawful. Section 8(a)(1) of the National Labor Relations Act makes it unlawful “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” Section 7 rights include “the right to self-organization, to form, join, or assist labor organizations.” The NLRB and the Courts interpret this language broadly.
Back in 2011 rumors about a possible unionizing campaign prompted an in house attorney and regional HR director to meet with employees, one of whom secretly taped the meeting. Comments made during that meeting were found to unlawfully: (1) threaten by suggesting unionizing was futile; (2) imply a promise of pay increases if the employees did not vote for a union; (3) threaten that unionization would result in demotion for some employees; and (4) threaten blacklisting of union supporters.
The following comments by management officials during the meeting were found to unlawfully imply that unionizing was futile and would not produce the benefits sought:
Be “very careful” when listening to the union’s “sales pitch.”
“In many cases, when you enter these negotiations, if you ever get there, employees tend to lose things.”
Negotiations are “a wide open game of uncertainty” in which “nothing is guaranteed” even if the union wins the election.
Answering “it’s possible” when asked if unionizing would cause wages to decrease adding, “we start from scratch…we don’t start with what you guys are making today. Everything goes to zero.”
Employees at a unionized location have gone nearly three years without a bargaining session or contract. The bargaining process is “never automatic” and employees might never see the benefits they seek.
The finding of an unlawful implied promise to raise wages arose when, in response to an employee’s specific request, management agreed to review the current pay structure to ensure it was fair and competitive adding, “we want a chance to address … [your concerns] before you pay somebody else to address them.”
Management’s answer to questions about the apprentice and journeyman system was found to be an unlawful threat to demote certain employees if the workforce unionized. Finally, reference to union membership as a “scarlet letter,” and suggestions that other employers might be less inclined to hire job applicants who had worked in a union shop, were deemed unlawful threats to blacklist employees for union activity.
As the Court stated, “the underlying message…is that an employer…needs to take care in the rhetoric it uses when discussing union issues with its workers.” Employers must be very careful when discussing union related matters with their employees. Special and careful considerations must be paid to developing labor law. Detailed scripts, approved through seasoned labor counsel, should be in place to ensure appropriate language is being communicated.