Tag Archives: employers

“Scabby” the Rat Gets Stay of Execution

Contributed by Michael Hughes, July 22, 2021

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The National Labor Relations Board (NLRB) ruled 3-1 on July 21, 2021 that labor unions may continue to use large, inflatable balloons–usually in the shape of an ugly rat–to aid in publicity of labor disputes, whether connected with traditional picketing activity or without.  The inflatable rat balloon used by the International Union of Operating Engineers, Local 150 has been nicknamed “Scabby.”  Scabby was the subject of the NLRB’s ruling.  In that case, Local 150 erected Scabby and banners at the entrance to the parking lot at an RV tradeshow.  The rat and signage identified the company that the union had its primary dispute with (the “primary employer”), but also named Lippert Components, Inc., a customer of the primary employer, stating “Shame on Lippert Components, Inc. for Harboring Rat Contractors.”  Lippert is a major supplier to the RV industry.  All attendees of the tradeshow had to drive past Scabby, the banners, and two seated, stationary union members to enter the parking area.

For many years, labor unions have utilized Scabby, and other inflatable creatures such as a “fat cat,” on their picket lines and other demonstrations. Such use has become ubiquitous at construction site pickets lines. Employers, businesses and the former General Counsel of the NLRB, Peter Robb, sought to execute Scabby in instances, like as used against Lippert Components, where the union employed the rat against “secondary” or “neutral” employers—i.e., employers with whom the union does not have an actual labor dispute.  Ever more frequently, unions have utilized such inflatables against neutral employers in an effort to pressure those neutral employers to stop doing business with the company with whom the union has an actual dispute.

It is a violation of the National Labor Relations Act (NLRA), as an unfair labor practice, for a union to “picket” against a secondary or neutral employer.  Traditional picketing activity, by its nature, necessarily contains a confrontational or coercive element.  Employers and the NLRB GC argued that, even without any other traditional picketing activity, the use of Scabby, by itself, was similarly confrontational and coercive.  Accordingly, they argued, the use of Scabby or other such inflatables, should be considered unlawfully coercive when deployed against businesses and employers with whom the union does not have a dispute.

The NLRB disagreed.  It upheld the ruling of the administrative law judge that found that the use of inflatables are not unlawfully confrontational or coercive of the neutral business.  Unions are allowed to attempt to persuade (but not coerce) neutral employers to stop doing business with the company the union is targeting.  Without threats, coercion or actual picketing, the NLRB found, that the union did not violate the law by using Scabby.  Moreover, as public “speech,” Scabby enjoys protection under the First Amendment to the US Constitution. 

Finally, while it is also an unfair labor practice for a union to even persuade or request employees of a neutral employer to withhold their labor from a neutral employer (i.e., refuse to work), the NLRB found that the use of Scabby, by itself, is not a “signal” for neutral employees to refuse to work and, in any event, in the case before it, no such work stoppages ever occurred.  In their concurring opinion, two members of the Board majority cautioned, however, that each case will need to be viewed on its own facts to determine whether the union’s conduct and activities amounts to unlawful threats or coercion, even without the use of traditional picketing—and noted, approvingly, of a recent case where the union’s use of a loudspeaker at a “coercively loud volume at a secondary employer’s worksite” was found to be unlawful.

Takeaways:

Because the case presented some clear implications of the First Amendment, a bipartisan panel of the NLRB (two republicans and one democrat) formed the majority.  In the wake of the ruling, we can expect that the use of inflatables, banners, signage and leafletting may become even more common against secondary or neutral employers.  These neutral employers may include customers and suppliers of the company with which the union has a dispute.  They may also include general contractors and property owners that subcontract with non-union trades.  While the NLRB’s ruling merely keeps what had been the status quo, it may be seen as a “green light” for other unions to take up these tactics—and for unions to go even further in activities aimed at influencing neutral employers to cut ties with companies the union ultimately is targeting.  There are certain ways to limit the type of activity the unions may engage in, and/or to limit the time and place of such activities, especially at construction sites.  If you are the target of such secondary activity, you should contact your competent labor counsel to determine if the union’s actions are lawful or unlawful in the circumstances, how to limit the impact of the union’s actions, and whether an unfair labor practice can be filed against the union.   

July 1, 2021 Increase to Chicago Minimum Wage….But No Change to Cook County Minimum Wage Despite Written Notices

Contributed By Michael Wong and Sara Zorich, June 25, 2021

It’s that time of year (again) for increases in minimum wage. However, this year is slightly different! In spite of the Cook County written notices that some employers may have received, the Cook County Minimum Wage for non-tipped employees is NOT increasing, as the unemployment rate for Cook County during the prior year was greater than 8.5%. However, the Cook County Minimum wage for tipped employees will increase on July 1st  from $6.00 to $6.60 to match the increase under Illinois law. For City of Chicago employers, the minimum wage for both tipped and non-tipped employees will increase on July 1st. To provide a full picture, the following chart shows the minimum wage for Illinois employers as of July 1, 2021:  

*    Increases to match the State minimum wage for tipped employees of $6.60.

** The employer size requirements are modified for small employers of Domestic Workers to $14.00/hr for (0-20 employees) but large employers remain 21+. Thus, any employee working as a Domestic Worker is eligible for the Chicago minimum wage

*** City of Chicago contracts and concessionaire agreements: $14.15 for non-tipped employees and $7.65 for tipped employees.

As a reminder, many municipalities in Cook County opted-out of the Cook County Minimum Wage and/or Paid Sick Leave ordinances. If your business is in Cook County (but not the City of Chicago), you must check whether or not the municipality that you are in opted-out and whether they opted out of both or only one.

REMINDERS:

2020 Change to Definition of Covered “Employer” Under Chicago Minimum Wage and Paid Sick Leave –

On July 1, 2020, the 2019 Amendment to the Chicago Minimum Wage and Paid Sick Leave ordinance, went into effect expanding what employers are covered. The new definition deleted the requirement that an employer have a business facility within the geographic boundaries of the City and/or be subject to license requirements. After July 1, 2020, the Chicago Minimum Wage and Paid Sick Leave ordinances defined an employer as any “person who gainfully employees at least one employee.”

Under this change, it can be interpreted that any employer who has an employee who performs at least two (2) hours of work within the geographic boundaries of the City, during any particular two-week period, must pay that employee the Chicago minimum wage for the time spent working within the City of Chicago and record the amount of paid sick leave accrued by that employee for the time spent working in the City!

As an example of the impact of this is the following scenario: a Colorado business sends its non-exempt employee to New York. The employee’s flight has a 2 ½ hour layover at O’Hare (O’Hare and Midway are both within the geographic boundaries of the City of Chicago). Technically under Chicago’s Paid Sick leave ordinance, the Colorado business would have to record the amount of paid sick leave that the employee accrued during the 2 ½ hours that the employee was “working” in Chicago and would be required to pay the Chicago minimum wage of $15.00/hr for the hours the employee was “working” in Chicago.

Any employer who has employees going into the City of Chicago, MUST review and understand their obligations and whether they are currently subject to the Chicago Minimum Wage and Paid Sick leave ordinances.

Chicago Paid Sick Leave Covers Employees in Outside Sales, Members of Religious Organizations, Student Employees of Accredited Illinois Colleges and Universities subject to the FLSA and DOT covered Motor Carriers

The 2019 Amendment to the Chicago Paid Sick Leave Ordinance also made changes to the definition of covered employees. In particular, the amendment specifically states employees covered by the Chicago Paid Sick Leave ordinance (but not the Chicago Paid Minimum Wage) include employees who work in outside sales, for a religious corporation or organization, are a student-employee of an Illinois college or university covered by the Fair Labor Standards Act, or are an employee of a motor carrier covered by the Department of Transportation.

This means that employees who work in outside sales, for a religious corporation or organization, are a student-employee of an Illinois college or university covered by the Fair Labor Standard Act, or are an employee of a motor carrier covered by the Department of Transportation, should be eligible to accrue up to 40 hours of paid sick leave each year under the Chicago Paid Sick Leave ordinance. As the Chicago Paid Sick Leave ordinance has specific requirements regarding accrual rate, carryover, caps, permitted uses, restrictions on use, requesting supporting documentation from employees, and employee notice, it is recommended that you contact experienced employment counsel regarding drafting a policy or questions about compliance.

Remember to Update Your Posters AND Provide written notices to Employees –  

Under the Chicago’s rules, employers have to post the most up to date minimum wage and paid sick leave posters and provide written notices to covered employees each year with the first paycheck after July 1st, whether by paper or electronic means. The City of Chicago posters for Chicago minimum wage and paid sick leave can be found on the City of Chicago webpages for Minimum Wage and Paid Sick Leave in English, Spanish, Polish, Chinese, Filipino and Korean.

Additionally, the Cook County website has posters for Minimum Wage and Sick Leave, but only in English.

The State of Illinois also has its Minimum Wage poster on its website in English or Spanish.

Employers who are unsure whether they must comply, what they must do to comply or are concerned about their policies complying should contact experienced employment counsel to mitigate exposures and minimize risk.

US Department of Labor Proposes Rule to Limit Federal Tip Credit Application

Contributed By Sara Zorich, June 23, 2021

On June 21, 2021, the US Department of Labor (DOL) announced that it has proposed new rulemaking, and is seeking input on significant limits to an employer’s ability to utilize the tip credit. 

Under the current law, the Fair Labor Standards Act and many state laws allow employers to pay employees in tipped positions a lower cash wage, and take a credit against the tips earned by the employee to make up the balance for the applicable minimum wage.  The proposed changes impact when the tip credit is applicable.

The proposed rule places the work that a tipped employee performs into three buckets: (1) tipped work (i.e. a busser bussing a table or server waiting on a table), (2) work directly supporting the tipped work (i.e. busser cleaning the restaurant dining area or preparing tables for the next day), and (3) work not part of the tipped job (i.e. busser cleaning the restaurant kitchen/bathrooms or a hotel housekeeper cleaning nonresidential parts of a hotel, such as a spa, gym, or the restaurant).

The tip credit is applicable to all tipped work. Regarding the second bucket, the DOL has proposed limits on the amount of time the employee can perform “directly supporting” work before the tip credit is no longer applicable. The standards proposed are: (1) if a tipped employee spends more than 20 percent of their workweek performing directly supporting work, then the employer cannot take a tip credit for any time that exceeds 20 percent of the workweek (80/20 rule), and (2) if a tipped employee spends a continuous 30 minutes or more performing work “directly supporting” their job, the employer cannot take a tip credit for that entire period of time that was spent on the directly supporting work tasks.

The two standards can interplay with each other as provided by the following example in the regulations: if a server is required to perform an hour of directly supporting work at the end of each of her five 8-hour shifts, each of those hours spent performing directly supporting work must be paid at the full minimum wage and would not count towards the 20 percent workweek tolerance. If that same server also performs 20 minutes of directly supporting work three times each shift, for a total of 1 hour per day, the employer could take a tip credit for the rest of the server’s supporting work because the 5-hour total did not reach the 20 percent tolerance for a 40-hour workweek.

Further, the regulations seek to clarify the third bucket, stating a tip credit cannot be taken for any time a tipped employee spends performing work that is not part of the tipped occupation (defined as “work that does not generate tips and does not directly support tip-producing work”). All time performing any work that is not part of the tipped occupation must be paid at the full minimum wage.

The proposed rule is open for comments for the next 60 days. In light of these proposed regulations, employers should begin reviewing their job descriptions for tipped employees and analyze the job duties and time for tasks related to tipped work, work directly supporting the tipped work and work that is not part of the tipped occupation.

NEED AN HR AUDIT CHECKLIST?  HERE YOU GO!

Contributed By: Jeff Risch, June 16, 2021

Employers of all sizes and industries, operating anywhere in the U.S., need to conduct HR Audits regularly. In 2021 and beyond, it is critical to carefully evaluate all aspects of how to properly and lawfully administer and manage personnel issues. Workplace laws, rules and regulations are constantly changing – what was lawful yesterday may be unlawful tomorrow. Annual HR Audits conducted by those with intimate knowledge and understanding of the latest legal developments, including enforcement, must be part of any employer’s regular processes.

SmithAmundsen LLC’s Labor & Employment Law Practice Group, comprised of attorneys concentrating in Employment, Traditional Labor, Immigration, Benefits/ERISA, OSHA, Workers Compensation and other key areas of focus, encourages HR Managers, Executives, Business Owners, CFO’s, In-House Counsel, and any other manager involved in personnel matters to review and give thought to our latest HR Audit Checklist.

Yes, Your Employer Can Require You To Be Vaccinated, According to a Federal Judge in Texas

Contributed By: John R. Hayes, June 14, 2021

A federal judge in Texas on June 12, 2021 dismissed a lawsuit brought by Texas health care workers challenging their hospital’s COVID-19 vaccine mandate. The scathing opinion by U.S. District Judge Lynn N. Hughes left no doubt that he believed the claims of the 117 plaintiffs were without merit.

The lawsuit was brought by employees of Houston Methodist Hospital, who had refused the vaccine, after the hospital in April announced a policy requiring  vaccination of all employees.  In early June, over 170 employees of the hospital were suspended for two weeks without pay over their decision to refuse getting the COVID-19 vaccine. If these employees did not get vaccinated within two weeks then they would be terminated. At the time of the filing, almost 25,000 Hospital employees had complied with the vaccination requirement, and approximately 285 employees had received medical or religious exemptions. 

The employees refusing the vaccine claimed that the policy of the hospital requiring the COVID-19 vaccine of its employees was an effort to coerce them into becoming test subjects for an untested and unreliable vaccine. Echoing a refrain made by many who are refusing the vaccine, the plaintiffs argued that the lack of full approval by the Food and Drug Administration (FDA), justified their refusal to get vaccinated. While not yet granting full approval for the three vaccines in the United States, the FDA has granted emergency use authorization for the vaccines, and approximately 173 million Americans have received at least one dose, with over 143 million being fully vaccinated.

In his opinion, Judge Hughes found that the plaintiffs were not “coerced” to get the vaccine, and that public policy clearly supports widespread inoculation efforts. Specifically, the court said that lead plaintiff and nurse Jennifer Bridges’ claims that the vaccines are “experimental and dangerous” were “false” and “irrelevant.”  He went on to say Bridges’ argument that the vaccine requirement equates to medical experimentation in Nazi concentration camps was “reprehensible.” 

Further explaining that the employees were not coerced, Judge Hughes stated that the hospital “is trying to do their business of saving lives without giving them the COVID-19 virus. It is a choice made to keep staff, patients and their families safer. Bridges can freely choose to accept or refuse a COVID-19 vaccine; however, if she refuses, she will simply need to work somewhere else.” Calling it “all part of the bargain” between a worker and their employer, the court stated “every employment includes limits on the worker’s behavior in exchange for his renumeration.”   

While the focus of the opinion was on Texas law regarding wrongful discharge, it appears to be the first of its kind regarding vaccine mandates, and has implications nationwide.  Judge Hughes cited to the Equal Employment Opportunity Commission’s (EEOC) updated May 28, 2021 guidance that employers can require employees to be vaccinated against COVID-19, subject to reasonable accommodations for employees with disabilities or sincerely held religious beliefs that preclude vaccination. He further stated that while this guidance is not binding “it is advice about the position one is likely to meet at the Commission.” 

The lawyer for the plaintiffs stated he planned to pursue an appeal.

Ultimately, the decision whether or not to mandate vaccination of its employees is up to the individual employer. While some hospital systems and other health care institutions such as nursing homes and home health care providers in the country are moving to require COVID-19 shots, many private employers have not yet taken that step. And although the EEOC has said employers can require vaccines, subject to certain exemptions, there still remain questions on the legality of doing so, as evidenced by this lawsuit. Any workplace vaccination policy—whether a mandate or one that provides incentives to get the shot—should be carefully considered in advance, ideally vetted by experienced employment counsel. 

We are continuing to monitor this evolving situation, and will update our blog with any new developments.

Illinois Legislature Passes Comprehensive Non-Compete Legislation

Contributed By Jeffrey Glass, June 11, 2021

employment law books and a gavel on desk in the library. concept of legal education.

As reported in prior blogs, the Illinois legislature for several months has been considering amendments to the Illinois Freedom to Work Act that apply to non-compete and non-solicitation restrictions. SmithAmundsen attorneys worked closely with the Illinois Chamber of Commerce to protect the interests of employers as much as possible during the legislative process. 

The legislature has now passed SB672. It is generally viewed as a compromise between employer and employee interest groups. It is not a ban on restrictive covenants, but it does impose important limits on them.

The legislature will send SB672 to Governor Pritzker for signature before the end of the month. The governor then will have up to 60 days from receipt to act. It is widely expected that the governor will sign the bill, probably sometime in August.

The amendments are effective for any contract entered into after January 1, 2022.  

The legislation is comprehensive and detailed, and should be read in its entirety. However, important highlights of the new legislation include the following:

Income Thresholds for Non-Compete and Non-Solicitation Agreements

One of the most important changes is the establishment of income thresholds for non-compete and non-solicitation agreements. 

For agreements entered into on or after January 1, 2022, an employee’s actual or expected annualized earnings must exceed $75,000 per year in order for the employee to be subject to a non-compete clause. This threshold increases to $80,000 on January 1, 2027, $85,000 on January 1, 2032, and $90,000 on January 1, 2037. A non-compete agreement does not include a confidentiality agreement or a covenant prohibiting the use or disclosure of trade secrets or inventions, so those contracts can continue to be used regardless of the employee’s income.  

Additionally, for agreements entered into on or after January 1, 2022, an employee’s actual or expected annualized earnings must exceed $45,000 per year in order for the employee to be subject to a non-solicitation clause. This threshold increases to $47,500 on January 1, 2027, $50,000 on January 1, 2032, and $52,500 on January 1, 2037. A non-solicitation agreement includes any agreement that bans solicitation of not only customers or prospective customers, but also employees, and vendors, among other categories.

“Earnings” for purposes of these thresholds includes earned salary, earned bonuses, earned commissions, or any other form of compensation reported on an employee’s IRS Form W-2.

The legislation also prohibits employers from entering into a covenant not to compete or not to solicit with any employee who an employer terminates, furloughs, or lays off as the result of business circumstances or governmental orders related to COVID-19, or under circumstances that are similar to the COVID-19 pandemic, unless the employer pays the employee pursuant to a formula contained in the Act. It also prohibits covenants not to compete for individuals covered by a collective bargaining agreement under the Illinois Public Labor Relations Act, the Illinois Educational Labor Relations Act, or certain individuals employed in the construction industry. Construction employees who primarily perform management, engineering or architectural, design or sales functions for the employer; or are a shareholder, partner, or owner in any capacity for of the employer may be covered by a covenant to compete or a covenant not to solicit.

Pre-Signing Notice and Review Period

The legislation adds a new Section 20 which provides that non-compete and non-solicitation clauses are illegal and void unless (1) the employer advises the employee in writing to consult with an attorney before entering into the covenant; and (2) the employer provides the employee with a copy of the covenant at least 14 calendar days before the commencement of the employee’s employment or the employer provides the employee with at least 14 calendar days to review the covenant.

Attorney’s Fees for Employees Who Prevail in Litigation

Many restrictive covenants provide that the employer may recover its attorney’s fees if it prevails in litigation to enforce a covenant. The new legislation levels the playing field by providing that, if an employee prevails on a claim to enforce a covenant not to compete or a covenant not to solicit, the employee shall recover his or her attorney’s fees and costs.  

Attorney General Enforcement

The amendments also provide for the Illinois Attorney General to investigate and prosecute abusive restrictive covenant practices. If the Attorney General has reasonable cause to believe that an employer is engaged in a pattern and practice prohibited by this Act, the Attorney General may initiate or intervene in a civil action in the name of The People of the State in any appropriate court to obtain appropriate relief. The Act grants the Attorney General broad investigative powers and provides for a wide range of remedies including civil penalties not to exceed $5,000 for each violation or $10,000 for each repeat violation within a 5 year period.

Adequate Consideration Defined

The definition of “adequate consideration,” consistent with the Fifield v. Premier Dealer Services decision that was discussed in detail in a prior blog is that an “at will” employee must work for at least two years after entering into the restrictive covenant contract in order for it to be enforceable.  Notably, the new statutory standard of “at least two years” actually is stricter than the standard that courts developed in the wake of Fifield. Courts applying Fifield, particularly in the federal system, used two years as a rule of thumb, but were willing to find adequate consideration based on lesser periods of post-contract employment (e.g., 18 months) in certain cases, such as when the employee voluntarily resigned. The new legislation would appear to deny courts such flexibility. 

The amendments also provide, alternatively, that the employer can provide “a period of employment plus additional professional or financial benefits, or merely professional or financial benefits adequate by themselves.” After Fifield, many employers sought to avoid potential consideration problems by providing a monetary payment to the at-will employee as additional consideration for the agreement; otherwise they would run the risk that the restrictive covenant would be deemed unenforceable if the employee resigned or was terminated less than two years after signing the restrictive covenant agreement.  Unfortunately, as with Fifield itself, this new provision provides no guidance as to what “professional or financial benefits” would be deemed sufficient as an alternative to two years or more of at will employment.

Definition of Employer’s “Legitimate Interest” and Standard for Enforceability

SB672 adds new Sections 7 and 15 to the Act which essentially codify the approaches to determining the legitimate interest of the employer, and determining whether the restriction is enforceable to protect the interest, that were established in 2011 by the Illinois Supreme Court in Reliable Fire Equipment Co. v. Arredondo case also discussed in a previous blog. This approach provides that, while exposure to “near-permanent” client relationships and the possession of confidential information are legitimate interests, there is no limit as to what can be a protectable interest and the “totality of the facts and circumstances” must be considered by the court in every case. Once the interest is identified, the restrictions must be deemed reasonable according to various criteria, such as whether they are no more burdensome than necessary to protect the interest of the employer, and whether they are injurious to the public. No single factor is determinative and the same covenant could be enforceable in one case, yet not be enforceable in a different case. These provisions codify the approach that courts and practitioners have been following since Reliable Fire.  

Reformation of Overbroad Restrictions

As with the definition of “adequate consideration,” and the provisions regarding an employer’s legitimate interests and how to determine whether a restriction is reasonably tailored to protect the interest, SB672 adds a new Section 35 that essentially codifies existing law regarding the reformation of overbroad covenants. It provides that, while “extensive judicial reformation” may be against the public policy of the State of Illinois, a court may exercise its discretion to modify an unreasonable or overbroad restriction rather than hold that it is wholly unenforceable. Factors to be considered “include the fairness of the restraints as originally written, whether the original restriction reflects a good-faith effort to protect a legitimate business interest of the employer, the extent of such reformation, and whether the parties included a clause authorizing such modifications in their agreement.”

As stated above, these amendments apply to any restrictive covenant contract entered into after January 1, 2022. Employers obviously need to make sure any contracts entered into after that date fully comply with the new law. In addition, employers who would like to get restrictive covenants in place before these rules go into effect would be well-advised to work with experienced employment counsel to accomplish that objective in compliance with existing law.

Save the Date! Complimentary Webcast June 23: Your Employee Asked to Work Remotely Indefinitely (or Short Term): Important Legal Considerations Before You Say Yes

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
  • Tax nexus considerations, unexpected cross border (state, local, foreign) taxes
  • Cyber hygiene best practices and the potential, continued data privacy threats when working remotely
  • Business incorporation/licensing for your remote employees
  • Payroll requirements (withholding and unemployment taxes)
  • Workers’ compensation/business insurance
  • Critical agreements that need to be in place for employers to protect their IP and ownership

Happy Memorial Day! A Quick Guide for Affirmative Action Programs for Hiring Veterans with Disabilities

Contributed By Allison P. Sues, May 26, 2021

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. 

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. 

Save the Date! Complimentary Webcast, May 24th: Mask Mandate Mayhem! A Briefing for Confused Employers

On May 13, 2021, the CDC issued new guidance stating that those who are fully vaccinated can resume activities without wearing a mask or social distancing. Following the CDC guidance, on May 17, 2021, OSHA updated its website to refer business and employers to the CDC guidelines. The door has been opened to employers and businesses to allow 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, or even made clear that employers and businesses are allowed to.

Moreover, state and local requirements and guidance have had mixed responses to the CDC and OSHA changes. What is expected of businesses and employers at this point is unclear – so what should you do?

Join Mike Wong and Carlos Arévalo on Monday, May 24 @ noon CT for a 30 minute briefing on what to expect in the coming months. Topics will include:

  • Risks of worker compensation claims
  • Reasonable accommodations under ADA and Title VII
  • Navigating federal, state, local, tribal or territorial laws, rules, and regulations

Don’t miss this timely webcast!