Tag Archives: Employment

State Survey – Considering Criminal Convictions in Private Employment Decisions

Contributed By Suzanne Newcomb, April 22, 2021

cv review flat illustration. hand with magnifier over curriculum vitae

As we previously discussed, Illinois has moved beyond “ban-the-box” and now significantly restricts employers’ ability to consider criminal convictions when making employment decisions. (For more details see our employer’s guide and join our complimentary webcast on April 29, 2021.)

Illinois is not an outlier. Several states have enacted or are considering similar legislation. Below is a short summary of these state laws applicable to private employers. All of these statutes have exceptions. Note too, the fact that a state is not listed does not necessarily mean it has no restrictions. These laws are nuanced and rapidly changing and many local governments have enacted their own regulations. Seek advice from trusted counsel before basing an employment decision on an individual’s criminal history.

California: Employers with 5 or more employees may not deny a position based (in whole or in part) on a criminal conviction without first making an individualized assessment (in accordance with the statute) as to whether the conviction has a direct and adverse relationship to the job such that it justifies denying the position. The law sets forth a detailed process to regulate an employer’s consideration of criminal convictions and imposes notice, disclosure, and waiting period requirements if an employer acts on a conviction.

Connecticut: It is currently unlawful to deny employment with the state on the basis of a criminal conviction without considering factors set forth in the statute. Pending legislation would expand the law to private employers.

Hawaii: It is unlawful to base an employment decision on a conviction unless it is a felony conviction in the last 7 years, or a misdemeanor conviction in the last 5 years, and the conviction bears a “rational relationship” to the duties of the position. 

New York: It is unlawful to take an adverse action based on criminal history unless there is a direct relationship between the conviction and the employment position or if the employment would pose an unreasonable risk. The statute includes factors to be considered in making this assessment. Upon request, the employer must provide a written statement setting forth the reasons for denying employment on the basis of conviction. 

Pennsylvania: It is unlawful to consider a job applicant’s conviction history unless the conviction relates to the applicant’s suitability for the particular position sought. An employer also must notify the applicant if employment was denied, in whole or in part, on the basis of criminal history.

Washington D.C.: Private employers with more than 10 employees may not base employment decisions on criminal convictions unless there are reasonable and legitimate business reasons in accordance with factors set forth in the statute.

Wisconsin: It is unlawful to discriminate on the basis of an arrest record or conviction record. There are exceptions to this rule for convictions and pending criminal charges that substantially relate to the particular job.

In addition, ban-the-box laws apply to private employers in California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and Washington D.C., as well as many other cities and counties across the country (and a total of 36 states have some form of ban-the-box laws applicable to public employment). Many state and local governments also prohibit or regulate employers’ consideration of convictions that have been sealed or expunged, arrests that did not result in conviction, and/or juvenile convictions.

Illinois Legislature Considering Freedom To Work Act Amendments That Target Non-Compete And Non-Solicitation Clauses

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

Contributed By: Jeffrey Glass, April 19, 2021

In recent years, many states have enacted legislation directed at employment contracts containing non-compete and non-solicitation clauses. Illinois first did so in 2016 with the Freedom to Work Act (the Act), which bans certain Illinois employers from entering into non-compete agreements with low-wage employees.

Now, the Illinois General Assembly has taken the matter up again with additional proposed amendments to the Act.

Although the new legislation has not been finalized, some provisions that appear likely to be included in the final version are: income thresholds for employees who are not “low wage,” a requirement that the employer provide the employee with a copy of the contract in advance of signing it, employee-friendly attorney’s fee-shifting provisions, and exemptions for union workers.  While the legislation primarily is geared toward protecting employees, it also helps employers by clarifying the state of the law on several issues, including clearer standards for the enforceability of non-compete clauses.

The amendments are projected to take effect on June 1, 2021, and will not apply to contracts entered into before that date.  Employers should contact their employment counsel to make sure any agreements entered into on or after the effective date comport with the new law. SmithAmundsen attorneys are working closely with employer-side groups on the legislation and will update readers of this blog as further developments arise.

US DOL Publishes Model Notices for American Rescue Plan COBRA Subsidy

Contributed By Rebecca Dobbs Bush, April 8, 2021

close up of the hands of a businessman in a suit signing or writing a document

The American Rescue Plan Act (ARPA), signed by President Joe Biden on March 11, 2021, included a COBRA Subsidy covering 100% of COBRA premiums for “Assistance Eligible Individuals” during the period of April 1, 2021 through September 30, 2021.  The 100% premium subsidy will be reimbursed to employers through their quarterly payroll tax returns. 

Pursuant to ARPA, employers are required to notify certain individuals about potential eligibility and details of the subsidy by May 31, 2021. Individuals then have 60-days to elect.  And although Notice 2021-01 described extensions of various plan deadlines for potentially up to 1-year or 60-days after the expiration of the “Outbreak Period,” the US Department of Labor (DOL) now makes clear in its FAQ on COBRA premium assistance under the American Rescue Plan Act of 2021, that this extension of timeframes for employee benefit plans does not apply to notice periods related to the COBRA premium assistance.  Also noted within the published FAQ, a penalty of $100 per qualified beneficiary, not to exceed more than $200 per family, may be assessed on employers for each day they are in violation of the COBRA rules.

Model Notices Available:

The above model notices cannot be used without modification that customizes each with specific information about the relevant individual and the employer’s group health plan. As potential fines for noncompliance can be steep, employers should carefully set procedures for timely distribution of all requisite notices. 

Can I Ask My Employees If They Have Been Vaccinated?

Male doctor hand wears medical glove holding syringe and vial bottle with COVID-19 vaccine

Contributed by Heather A. Bailey, April 6, 2021

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.

Whether you’ve chosen to mandate COVID-19 vaccinations or not, you still may be interested in asking your employees to show proof of their vaccination status.  This simple question comes with its own set of risks. The U.S. Equal Employment Opportunity Commission (EEOC) has given additional guidance in this area in Section K.3 of “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws.”   

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.

Practice Tips:

  • 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). 

Gig Workers: An Evolving Trend or a Class Action Waiting to Happen?

Contributed by Rebecca Dobbs Bush, June 4, 2019

The workplace is changing: Millennials, Generation Z-ers, and Baby Boomers looking to supplement their retirement income. These individuals are more interested in autonomy and avoiding bad managers, office politics and lengthy, non-productive staff meetings. Plus, the tax-savvy individual knows the economic advantage of having access to traditional business deductions through a Schedule C, rather than being limited to the standard deduction or itemizing as a W-2 employee would be.

Business concept. Isolated on white

More and more businesses also seem to be interested in the advantages of a gig workforce, also called freelancers, subcontractors, contingent workforce, and more. After all, it allows a business to gain access to skills and talent without having to commit to hiring an individual as a full-time employee. According to Deloitte’s 2018 Global Human Capital Trends study, more than 40% of workers in the U.S. are employed in “alternative work arrangements.” These arrangements include contingent, part-time, or gig work.

So, is it a win-win for all involved? The problem is that current employment laws are simply not evolving at the pace required to keep up with this modern-day independent contractor. With this, a minefield is created for the unwary business. 

Under the Obama administration, the DOL had issued broad guidance suggesting that gig workers were likely to be considered “employees.” That guidance was rescinded with the change in administration. Then, on April 29, 2019, the DOL issued an atypical, 10-page opinion letter on the subject. The opinion letter lays out a detailed analysis of all the relevant factors for independent contractor status and then comes to the conclusion that the gig workers at issue are not employees.

For now, if your business is participating in the trend of the gig worker, you want to make sure the relevant factors are met. Those factors and the analysis change depending on which law the issue is being examined under. Some of the more common factors are: control, permanency of the relationship, integrality to business operations, ability to sustain a profit or loss, accountability for operating expenses, etc. In other words, is the individual truly operating as a stand-alone business? 

If you choose to engage gig workers, make sure to avoid these common mistakes:

  • Do not treat the individuals as employees. Do not even use the word “hire.” Instead, you are “engaging” their services, or “contracting” with them. And, commit to the arrangement in writing.
  • Do not be tempted to offer them benefits. Putting them in your health plan or letting them participate in a 401(k) will jeopardize any argument that they are not otherwise an employee. If it walks like a duck, quacks like a duck….
  • Do not make them sign a non-compete agreement. A critical factor in most cases is whether the individual is free to take on work from others or whether they are completely dependent on your business for work. If the individual is subject to a non-compete agreement and effectively being prevented from working for others, you will not win on this factor.

Because of the amount of exposure involved with a misclassification lawsuit, it is worthwhile to have competent employment counsel review your situation and any independent contractor agreement or contracts that you are using to help you make sure it’s being handled in the best possible manner to strengthen the individual’s status as an independent contractor.

Tattoos, Facial Piercings, Ear Gauges? What’s an Employer to Do?

Contributed by Suzanne Newcomb

In the past, dress codes were straightforward. Depending on the nature of the business, they required a “neat, clean uniform” or perhaps “professional attire” and banned tube tops and flip flops. But as visible body art becomes more mainstream, many employers find themselves struggling to decide whether and where to draw the lines when drafting a personal appearance policy that works for their business.

As a starting point, body art itself is not a legally protected characteristic so bans are generally permissible. However, employers should be mindful that some tattoos, piercings, and other body adornments could have religious or cultural roots.  Accordingly, employers must ensure their policies do not adversely impact a particular ethnic or religious group and should take seriously requests to accommodate religious beliefs.

Back in 2004 a federal appeals court dismissed claims brought by a member of the Church of Body Modification finding that accommodating her multiple facial piercings imposed an undue hardship because it could adversely affect the employer’s public image. Since then, district courts have found that a restaurant employee who claimed covering his tattoo amounted to sacrilege; an employee who refused to remove her allegedly religious nose ring; and a Rastafarian who was moved to a non-customer contact position after refusing to cut his hair, all presented potentially viable claims warranting jury trials.

It is tough to say whether the tide is turning. Nevertheless, it is an issue many employers deal with on a regular basis.

Best practices for drafting an effective and workable personal appearance policy:

  1. Really think about what you will tolerate and why. Will you hire an employee with a visible tattoo? What if the tattoo is on her face? Might a total ban exclude applicants who would be a great asset for your business? Is there an alternative to a total ban that makes more sense? What about ear gauges and tunnels?
  2. Be prepared to justify the reasoning behind any bans or limits you decide are best for your business. Is the policy rooted in concern for the company’s public image? Fear of customer reaction? Safety or sanitation concerns?
  3. Consider whether the policy might look different for different segments of your workforce. One size fits all might not make the most sense here.
  4. Most importantly, as the cases referenced above demonstrate, employers must take claims for accommodation of religious beliefs seriously and engage in an interactive process to determine whether a workable accommodation exists if an employee or applicant claims conforming to the policy would infringe upon his religious beliefs.

The Ongoing Debate About Adequate Consideration in Non-Competition and Other Restrictive Covenants

Contributed by Carlos Arévalo

In late June, the appellate court for the first district reiterated that employment lasting less than two years is inadequate consideration to support enforcement of a post-employment restrictive covenant. In McInnis v. OAG Motorcycle Ventures, a motorcycle salesman filed a lawsuit seeking to have his non-competition agreement declared invalid because he resigned 18 months after signing the agreement. The employer counterclaimed seeking an injunction to enforce the restrictive covenant. The salesman won.Featured image

The court came to this conclusion after examining the 2013 first district case, Fifield v. Premier Dealer Services, Inc. That case has been criticized because of its emphasis on the duration of employment after the execution of the agreement, as opposed to reviewing the totality of the circumstances under the Illinois Supreme Court standard. The case involved an employee who was laid off when his employer was purchased by another company. The new company offered the employee a job, but required him to sign a non-competition agreement. While he signed the agreement, the employee resigned three months later. The employee and his new employer sued to invalidate the agreement. The court agreed and established a bright-line rule that employment lasting less than two years after signing a non-competition agreement would not be sufficient consideration. Before this decision, courts had maintained that employment for a “substantial” period of time would be sufficient consideration. The employer, supported by the Illinois Chamber of Commerce, appealed the Fifield decision to the Illinois Supreme Court. However, the appeal was denied.

The Third District Court also adopted the two-year rule. In the 2014 case of Prairie Rheumatology Associates, S.C. v. Francis, the court held that a physician, who left the practice after 19 months, was not bound by her non-competition agreement. Some federal court judges, however, have expressed skepticism that the Illinois Supreme Court would adopt the two-year rule. In February, Judge J.B. McDade of the Central District noted that the two-year rule in Fifield is “overprotective of employees, and risks making post-employment restrictive covenants illusory for employers subject completely to the whimsy of the employee as to the length of his employment.”

This ongoing debate is by no means settled. In fact, Justice David Ellis disagreed with the majority of the court in the McInnis decision. In his dissent, Justice Ellis stated that he does not believe that a per se rule exists in Illinois nor that a bright-line, two-year rule is warranted.  We will have to wait and see what happens.

Until the issue is settled by the Illinois Supreme Court, employers should review their existing restrictive covenants to ensure that there is sufficient consideration in light of these court decisions and should carefully analyze what consideration is being offered in agreements currently being negotiated. This additional consideration can take the form of added bonuses, additional benefits such as more sick or vacation time, or other incentives particular to the individual business and employees.

OSC TAL on Pre-Population of the Electronic Form I-9: Making Life Easier or a Headache?

Contributed by Jacqueline Lentini McCullough

In a Technical Assistance Letter (TAL) dated August 20, 2013 from the Department of Justice’s (“DOJ”) Office of Special Counsel, Deputy Special Counsel Seema Nanda, discourages pre-population of employee information in Section 1 of the I-9 Form by electronic I-9 programs due to potential discrimination concerns. Similarly, the Immigration and Customs Enforcement (“ICE”) has indicated that pre-population of Section 1 is impermissible.

Pursuant to federal law, a person or entity that hires, recruits or refers an individual for employment must verify the identity and employment authorization of each person hired, recruited or referred. The form designated for that purpose is the form I-9. The form I-9 specifies that Section 1 be completed by the employee. If an individual is unable to complete the form I-9 or needs it translated, someone may assist him or her in the preparation. A preparer or translator must read the form I-9 to the individual, assist him/her in completing Section 1 and have the individual sign or mark the form I-9 by a handwritten or an electronic signature attached at the time of the transaction.

The Office of Special Counsel (“OSC”) oversees Immigration Related Unfair Employment Practices. As such, the OSC discourages the practice of an employer pre-populating Section 1 with previously obtained employee information. This practice increases the likelihood of including inaccurate or outdated information in Section 1. Inaccurate or outdated information in Section 1 may lead an employer to reject documents presented or demand specific documents for Section 2 purposes. Furthermore, if an employer uses outdated or inaccurate information to submit an E-Verify query, a mismatch may result because the status or name in government databases conflicts with the employer’s outdated information.

Moreover, from the perspective of the anti-discrimination provision, employers relying on previously gathered employee information may be more likely to overlook that a particular employee has limited English proficiency (“LEP”) because Section 1 has been pre-populated by the employer. As a result, the employer may fail to provide the employee with translation or interpretation assistance in order to ensure the accuracy of Section 1, thereby assisting the employee’s understanding of the request for documents relating to Section 2.

The OSC is now the second governmental agency after ICE to notify the public to avoid pre-population of Section 1 of Form I-9.

Don’t Forget to Dot the I’s and Cross the T’s: A Reminder When Enforcing Call-In Policies for Employees on FMLA Leave

Contributed by Brandon Anderson

Once again, the courts have upheld an employer’s right to strictly enforce its call-in policy even if an employee is absent on FMLA leave.  While this isn’t the first time that a court has made this holding, the United States Court of Appeals for the Sixth Circuit case, Strouder, et al. v. Dana Light Axle Manufacturing, Case No. 12-5835, serves as a reminder about how an employer should go about enforcing such a policy.

The case involved an employee who unquestionably had some attendance issues.  The crux of the case pertained to a September 30, 2009 meeting, and, not surprisingly, the parties disputed exactly what happened during the meeting.  Essentially, the parties contested whether the employee informed the employer that he had a hernia and whether he advised the employer that he was having surgery the following week.  There was no question, however, that the employer was aware that the employee’s physician placed lifting restriction on his work activities.  The company did not have any light duty positions and advised the employee that, as a result, he could not work.  The employee responded either (a) he would have the weight restrictions removed or (b) he would try and have the weight restriction removed.  Regardless, the weight restrictions were not removed and the employee did not report back to work.

Following the meeting, on October 1 the employer advised the employee that his medical certification was still deficient and gave him until October 7 to submit proper certification.  The employee did not report for work on October 1, 2, 5, or 6, and he did not call in pursuant to company policy on those days.  As a result, on October 6, 2009, the employer sent the employee a letter advising him that his failure to call in resulted in his voluntary resignation and indicated that if there were extenuating circumstances that the employer should consider, he should contact his supervisor immediately.  On October 7, before receiving the termination letter, the employee obtained a completed medical certification and hand-delivered it to the company before he went in for his surgery.  The termination letter was received the following day, and, at that point, he began calling in to advise the company of his absence, in accordance with company policy.

The employee later admitted that he was aware of the call-in procedure, but thought that he did not need to call in because the company knew he was having surgery and knew that he was going to be out for a period of time. 

In affirming the summary judgment determination, the Court first addressed the issue of whether an employer may enforce its own internal notice requirements (i.e. calling in on a daily basis) even if the requirement goes beyond the “bare minimum” that would typically be sufficient under the FMLA.  The court diverged from an earlier Sixth Circuit case decided under the old regulations and concluded that an employer can enforce its call-in requirements “unless unusual circumstances justify the employee’s failure to comply with the employer’s [call-in] requirements.” 

The court then found that the employee did not produce any evidence demonstrating unusual circumstances that would have justified his failure to comply with the call-in policy, and, therefore, upheld the granting of summary judgment.

There is an important take away from this case.  Maintain and enforce call-in procedures regardless of whether the absence is FMLA related or not?  Well, yes, but this is old news.  The more important take away is close the circle when an employee fails to follow internal policies in utilizing FMLA—whether in a letter or in a disciplinary interview, ask the employee whether there were any unusual circumstances that prevented him or her from complying with company policies.

Lack of Protectable Interest in Patient Base Dooms Medical Employer’s Restrictive Covenant Case

Contributed by Jeff Glass

Employers who use restrictive covenants to protect their client base should take heed of the Illinois Appellate Court for the First District’s decision in Gastroenterology Consultants of the North Shore, S.C. v. Meiselman, M.D., et al.

In 1996, defendant Dr. Meiselman formed the plaintiff corporation with three other doctors. All agreed to non-competes that prohibited them for three years from soliciting the clinic’s patients within a 15 mile radius. Meiselman left in 2010 to join a nearby practice.  The clinic sued him and his new employer, seeking a preliminary injunction. 

The trial court denied the injunction on the grounds that plaintiff failed to establish a protectable interest Meiselman’s patients. 

On appeal, the court applied the test from the Illinois Supreme Court’s opinion in Reliable Fire Equipment v. Arrendondo.  Pursuant to Reliable Fire, a restrictive covenant is enforceable if: (1) it is no greater than necessary to protect the employer’s legitimate interest; (2) it does not unduly burden the employee; and (3) it does not injure the public. The court noted that the analysis is “unstructured” and requires consideration of the totality of the circumstances. 

The facts showed that, prior to forming the corporation, the defendant practiced for a decade in the area. After forming the clinic, he continued treating these patients.  He personally billed them, not the clinic.  The clinic did not help him with advertising or marketing. His compensation depended on his independent practice.  

Based on these facts, the appellate court held that the trial court did not abuse its discretion in holding that the plaintiff lacked a legitimate interest in the patient base and therefore was not likely to prevail on the merits.

Meiselman demonstrates that, even if restrictions are reasonable, the employer needs to show good reasons why it has an interest in the departed employee’s customer relationships. 

We recommend that employers review their agreements and revise them if necessary to have the employee acknowledge that:

  • he or she is being paid to develop customers and leads;
  • the employer is providing support for those efforts; and 
  • the employee understands that the relationships belong to the employer

In addition, document any marketing expenses, tech support, or other “back of the house” efforts that help the employee build his or her book of business.  Should the contract wind up in court, these measures will help establish that the customers belong to the company, too. 

On the other hand, if employees develop clients exclusively through their own efforts, bring a client base to the company, or are compensated on an “eat what you kill” system, Meiselman underscores the difficulty of establishing a protectable interest in that situation.  In that case, employers should consider alternate protections, such as a buy-out requirement, which compensates the employer without barring the employee from working with his or her customers.