Strident DOL Revises FFCRA Reg, Thumbs Its Nose at NY Federal Court Decision

Jason E. Reisman

On August 3, 2020, at the urging of the State of New York, U.S. District Judge Paul Oetken of the Southern District of New York struck down four different provisions of the U.S. Department of Labor’s (“DOL”) implementing regulation for the Families First Coronavirus Response Act (“FFCRA”): (1) the “work availability” requirement, under which paid leave is only available if an employee has work from which to take leave; (2) the requirement of employer permission to take leave intermittently; (3) the definition of “health care provider” for purposes of exclusion from paid leave benefits; and (4) the requirement for an employee to provide certain documentation before taking leave. New York v. U.S. Dep’t of Labor, 2020 WL 4462260 (S.D.N.Y. Aug. 3, 2020).

Although the judge did not issue a “nationwide” injunction, the mere fact that there was a decision by a federal judge striking certain important provisions of the FFCRA regulation left employers (or maybe just their counsel) in a panic about the implications outside of New York. Would this decision impact eligible employees in California? Would the decision be retroactive? Would the DOL appeal? Would it seek a stay of the decision while the appeal was pending? Continue reading “Strident DOL Revises FFCRA Reg, Thumbs Its Nose at NY Federal Court Decision”

Philly’s Salary History Ban to Be Enforced Starting in September

Asima J. Ahmad

As outlined in a previous post, the Philadelphia Wage Equity Ordinance is back in play. And now that the litigation dust has settled, the city announced that the Philadelphia Commission on Human Relations (“PCHR”) will begin enforcing the ordinance on September 1, 2020.

As a reminder, the Ordinance prohibits all employers, employment agencies, or their agents from asking about a job applicant’s current or prior salary history during the application or hiring process if the position is located in Philadelphia. Shortly after the salary history ban was announced, the Chamber of Commerce for Greater Philadelphia sued to block it from going into effect on free speech grounds. The case proceeded to the Third Circuit, which ultimately held that the ordinance was constitutional in a unanimous decision issued this February.

The PCHR recently issued a set of FAQs which provide some useful information for employers, including whether the ordinance applies to internal candidates (no), whether an employer can rely on market data for salaries (yes), and whether an employer can ask a job applicant about their salary expectations (yes, but employers should not ask candidates if their salary “expectation” is tied to their current or prior salary history). The FAQs also outline suggested best practices for compliance, including:

    • Focusing questions on the applicant’s salary demands, experience, skills, and qualifications during the interview process;
    • Establishing salary ranges or pay scales for open positions;
    • Creating or modifying written policies to reflect compliance with the ordinance;
    • Training interviewers, hiring staff, and other applicable staff regarding compliance;
    • Refraining from seeking prior salary history from other sources, including a former employer or public records;
    • Instructing background reporting agencies to exclude information found regarding an applicant’s salary history; and
    • Developing protocols for discarding or isolating salary information that employers inadvertently receive but are prohibited from considering.

Job applicants who are asked about their salary history in violation of the ordinance can file a complaint with the PCHR and may be awarded compensatory damages, punitive damages, reasonable attorneys’ fees, costs, injunctive relief, or other relief. Employers are prohibited from retaliating against applicants who refuse to provide their salary history.

We recommend contacting a member of Blank Rome’s Labor & Employment team as soon as possible to ensure that your hiring process and practices follow the ordinance’s requirements, and that your staff understands the do’s and don’ts of the new law. We are happy to answer any questions about compliance or updating your policies and procedures, or to schedule a training.

Button Up Restrictive Covenants before Employees Start in New Positions

Kevin M. Passerini and Oliver R. Katz

Pennsylvania law has long required that a restrictive covenant agreement be signed prior to or at the start of employment for it to be enforceable. By extension, Pennsylvania law has also required consideration beyond continued employment—a promotion, bonuses or stock options, severance, or other meaningful consideration—to support a restrictive covenant agreement with an existing employee. Those requirements left a somewhat gray area where a newly hired employee (or an internal employee elevated to a new position) does not sign a restrictive covenant agreement until shortly after starting in the new role and does so without receiving any consideration distinct from the new employment position itself.

In its June 16, 2020 decision in Rullex Co., LLC v. Tel-Stream, Inc., 27 EAP 2019 (Pa. 2020), the Pennsylvania Supreme Court waded into that gray area to consider whether new or “fresh” consideration must be provided any time a restrictive covenant agreement is executed after an employee’s first day in a new role. The court rejected the exclusive use of a bright-line rule requiring execution at or prior to the commencement of employment. Instead, relying in part on a decision from 50 years ago, it left the door slightly open so that restrictive covenants signed after employment has already commenced may be enforced where there was a meeting of the minds on the substance of the restrictive covenants at or prior to the start of employment. As the court noted, the critical inquiry is whether the parties had agreed to the “essential provisions” when the relationship began, such that the restrictive covenant agreement was ancillary to the taking of employment, or whether there was no meeting of the minds such that the restrictive covenants were a “belated addition” to their relationship, requiring additional consideration. In applying its standard to the facts of the case, the court held that there was no meeting of the minds at the start of the relationship based on the delay of at least two months before the signing of the agreement and Rullex’s willingness to consider and accommodate revisions to the original draft.

With the clarity provided in Rullex, employers likely cannot rely on the mere circulation of a restrictive covenant agreement prior to the start of a new employment position to ensure its enforceability. And employers must also be wary of continued negotiations with prospective employees (or existing employees who are candidates for promotions) after having presented an agreement containing restrictive covenants.

Going forward, the most obvious (and best) way to avoid a dispute over whether the parties had a “meeting of the minds” is to have a restrictive covenant agreement signed before a new employee commences work in the new role and before an existing employee assumes a new role within the company. Another good option is for an employer to attach the restrictive covenant agreement to an offer letter that conditions employment (or any promotion or other new position) on the execution of the agreement and to require the individual to sign that offer letter in advance of starting in the new position with an acknowledgment that he or she has received and reviewed the agreement and accepted all of the terms of the offer. Anything less is likely to leave employers in the gray area, fighting it out in court or in arbitration.

“Supremes” Validate Title VII Protection for LGBTQ Workers

Jason E. Reisman     

Yesterday, the United States Supreme Court issued a long-awaited, watershed decision confirming that Title VII of the Civil Rights Act of 1964 does protect against discrimination in employment based on gender identity and sexual orientation. It may be the most significant employment-related decision in more than 20 years. The decision addresses a connected trio of separate cases that were argued in the fall before the Court: Bostock v. Clayton County, Georgia (on appeal from the 11th Circuit), Altitude Express, Inc. v. Zarda (on appeal from the 2d Circuit), and R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC (on appeal from the 6th Circuit). For a little background, see our prior blog here.

With a 6-3 majority, the four “liberal” justices joined with two “conservative” justices to reach this momentous decision—in fact, Justice Gorsuch penned the decision. Clearly finding that the word “sex” in Title VII encompasses employment actions based on gender identity or sexual orientation, Justice Gorsuch admitted that the original legislators who drafted Title VII “might not have anticipated their work would lead to this particular result.” The focus on interpreting the text of the law, which was often championed by the late Justice Antonin Scalia, carried the day—leading to “new” protections that will enhance the rights of the LGBTQ worker community throughout the country, especially in numerous states and locales that do not otherwise provide such protection. The decision also ensures that the “paradoxical legal landscape in which a person can be married [to a same sex partner] on Saturday and then fired on Monday for just that act” (raised in 2017, by a panel of the Seventh Circuit Court of Appeals in Hively v. Ivy Tech. Community College) has drifted off into the sunset.

Simply put, the Supreme Court said, “Because discrimination on the basis of homosexuality or transgender status requires an employer to intentionally treat individual employees differently because of their sex, an employer who intentionally penalizes an employee for being homosexual or transgender also violates Title VII.”

For employers across the country, the uniformity created by this decision will impact millions of workers in states where there was no similar protection for such discrimination—which is more than 50 percent of the states. There is much to consider. For example, if an employer employs 15 or more employees and does not have a policy prohibiting gender identity and sexual orientation discrimination, it is time for a handbook update…as the immediate first step, with a corresponding move to update and implement new workforce training. As important, employers should take this valuable opportunity to engage with all employees. Be mindful of, and creative in, bringing positive and productive communication and, where needed, change to the workplace—culture emanates from the top and cannot be overestimated as to its impact on the effectiveness and health of the workforce.

It is inevitable that there will be additional questions as this decision filters out into the workplace and the lower courts interpret it. Cases down the line will likely force the courts to address issues relating to the interplay of this decision with the exercise of religious freedom.  Also, as the dissent from Justice Alito noted, the ruling could have unforeseen consequences, leaving courts to address its implications in athletics, bathroom and locker room access, university housing, and other contexts. Though undoubtedly putting to bed one of the most substantive issues in employment law in the 21st century so far, as with all significant decisions of the highest court, the ripple effects will engender further battles and be felt for decades to come.

Another Round for the Garden State! New Jersey Again Changes Leave and Disability Benefits for COVID-19 Impacted Employees

Thomas J. Szymanski

New Jersey Governor Phil Murphy recently signed S2374 into law, expanding the New Jersey Family Leave Act (“NJFLA”) and New Jersey Temporary Disability Benefits Law (“NJTDBL”) and providing additional employee protections during the coronavirus COVID-19 pandemic and future epidemics, including (1) the expansion of reasons for leave; (2) certification changes; (3) intermittent use of such leave; (4) changes related to highly compensated employees; and (5) the expansion of the scope of compensable leave under NJTDBL. These changes are effective immediately and apply retroactively to March 25, 2020.

NJFLA—Expanded Reasons for Leave

During a state of emergency declared by the Governor, or when indicated to be needed by the Commissioner of Health or other public health authority, due to “an epidemic of a communicable disease, a known or suspected exposure to the communicable disease, or efforts to prevent spread of a communicable disease,” an employee may use NJFLA leave for the following new reasons:

    1. Childcare—to care for a child due to a school or daycare closure;
    2. Mandatory quarantine— to care for a family member subject to mandatory quarantine; and
    3. Voluntary self-quarantine—to care for a family member whose doctor recommends a voluntary self-quarantine.

Continue reading “Another Round for the Garden State! New Jersey Again Changes Leave and Disability Benefits for COVID-19 Impacted Employees”

Colorado Goes “Wage & Hour” Crazy—Enhances Employee Protections a la California

Jason E. Reisman and Alix L. Udelson

For all of those employers with employees based in Colorado, we wanted to update you on some sweeping changes to Colorado wage and hour laws that went into effect on March 16, 2020. As you know, employers generally must comply with both state and federal wage and hour laws—essentially meeting the requirements that are most protective of employees. To date in Colorado, the state law’s applicability has been limited—but that’s not going to be the case any longer.

The new law, known as the Colorado Overtime & Minimum Pay Standards (“COMPS”) Order #36, replaces all prior Colorado Minimum Wage Orders. The most significant changes include: (1) extending Colorado’s wage and hour laws to even more employers than before; (2) adjusting the salary thresholds required for eligibility under the federal overtime exemptions for executive, administrative, and professional employees; (3) changing employee rest period requirements and requiring meal periods; (4) clarifying the definition of “time worked” for purposes of being considered “compensable time”; (5) imposing new posting and distribution requirements that will require changes to employee handbooks; (6) creating new earnings statement requirements that may require payroll to update your earnings statements; and (7) modifying the calculation of overtime so that it is based not only on a weekly basis, but on a daily and consecutive hourly basis too. More details are below, and a copy of the COMPS Order can be found here. Continue reading “Colorado Goes “Wage & Hour” Crazy—Enhances Employee Protections a la California”

California Corner: The Employee v. Contractor Saga Continues as Uber and Postmates Face First Defeat in Attempt to Enjoin AB5

Caroline Powell Donelan and Natalie Alameddine

The hopes of California gig economy companies to retain the flexibility to classify workers as independent contractors were dashed this week when a federal district court judge refused to enjoin Assembly Bill 5 (“AB5”), which codifies the “ABC” test for most independent contractor classifications.

Governor Gavin Newsom signed AB5 into law last fall, effecting a seismic change on California’s legal landscape. Effective January 1, 2020, the law makes it nearly impossible for companies to lawfully classify most workers as independent contractors (rather than employees). The bill expands on California Supreme Court’s three-prong “ABC” test from its 2018 Dynamex decision for determining how workers can be classified, which you can read about here. With certain limited statutory exceptions, AB5 provides that, to properly classify a worker as an independent contractor in California, an employer must demonstrate that the worker: (A) is free from the company’s control and direction; (B) performs work outside of the company’s usual course of business; and (C) is customarily engaged in independent work of the same nature as the work performed. There is no balancing, as all three factors must be met. Continue reading “California Corner: The Employee v. Contractor Saga Continues as Uber and Postmates Face First Defeat in Attempt to Enjoin AB5”

NEWS FLASH: The Ban Is Back! Philadelphia Employers Can’t Ask About Salary, Wage, and Benefits History

Thomas J. Szymanski

Effective immediately, Philadelphia employers are prohibited from asking job applicants about their salary, wage, and benefits history.

As a bit of background, in 2016, the Philadelphia City Council passed an ordinance banning salary, wage, and benefits history inquiries by employers (and also barring employers from setting a new hire’s initial pay based on their salary history), which was signed into law in January 2017. However, the ban on salary and wage history inquiries has been on ice since April 30, 2018, when it was enjoined by the United States District Court for the Eastern District of Pennsylvania. Today, the U.S. Court of Appeals for the Third Circuit dissolved the district court’s injunction; therefore, Philadelphia employers must immediately stop asking job applicants about their salary, wage, and benefits history. The Third Circuit also upheld the lawfulness of the ordinance’s bar on using salary history to set initial pay.

Please contact a member of Blank Rome’s Labor & Employment practice group if you have any questions about compliance with Philadelphia’s salary, wage, and benefits ban or any other employment issues.

As We Predicted, Challenges to NY Reproductive Health Decision-Making Law Have Begun

Stephen E. Tisman

In a December 17, 2019, Blank Rome Workplace post, we described the law enacted in New York expanding “protected status” to cover employee decision-making regarding reproductive rights matters. (See blankromeworkplace.com/2019/12/17/new-york-expands-discrimination-protection-to-reproductive-health-decision-making/). We concluded with the prediction that:

The law will undoubtedly be challenged by an employer claiming that providing such coverage violates the employer’s religious beliefs (think Masterpiece Cakeshop v. Colorado Civil Rights Commission). The ultimate fate of this statute will be resolved under federal First Amendment law.

That challenge has begun. On January 31, 2020, a lawsuit was filed in federal district court seeking a declaration that the statute is unconstitutional and void, and for an injunction to bar enforcing it against the plaintiffs. Christopher T. Slattery, et al. v. Andrew M. Cuomo, et al., U.S.D.C., N.D.N.Y., Case No. 5:00-at-99999.

Stay tuned for developments.

Breaking: California Grants Preliminarily Injunction of AB-51

Caroline Powell Donelan

UPDATE: Today, a federal court preliminarily enjoined the enforcement of AB-51 (California’s anti-arbitration law discussed here, here, and here) as it relates to arbitration agreements governed by the Federal Arbitration Association (“FAA”). We will get a detailed order from the court soon, but the minute order issued today is below. A great reminder to employers who wish to implement arbitration that the agreement should always expressly state it is governed by the FAA. Continue reading “Breaking: California Grants Preliminarily Injunction of AB-51”