Category: Strategic counseling

Third Circuit Confirms Courts’ Authority to Salvage Over Broad Restrictive Covenants

Kevin M. Passerini

On April 26, 2019, the U.S. Court of Appeals for the Third Circuit weighed in on a pair of district court rulings which had denied ADP, LLC’s requests for preliminary injunctive relief against two former employees who ADP alleged had violated post-employment restrictive covenants. In ADP, LLC v. Rafferty, et al., the Court unanimously reversed the rulings and remanded to the district courts with instructions to “blue pencil the agreements and reconsider the four-factor preliminary injunction standard” as it relates to the former employees’ non-competition and customer non-solicitation obligations. The Third Circuit’s opinion restates what has long been the law in New Jersey and clarifies for anyone still in doubt that “New Jersey has evolved from invalidating overbroad restrictive covenants outright to presumptively ‘compress[ing] or reduc[ing]’ their scope ‘so as to render the covenant reasonable’” (alterations in original; citations omitted).

What is “blue penciling”? Continue reading “Third Circuit Confirms Courts’ Authority to Salvage Over Broad Restrictive Covenants”

Time to Start Collecting Pay Data—Judge Sets September 30 as Date for Filing of EEO-1s

Mark Blondman and Emery Gullickson Richards

As we reported last month Judge Tanya Chutkan of the United States District Court for the District of Columbia ruled on March 4 that the Office of Management and Budget (“OMB”) was to reinstate the EEOC’s 2016 pay reporting Rule, the enforcement of which had been blocked by the Trump administration. Under that Rule, which was to have been effective with the filing of EEO-1 forms in March 2018, employers with more than 100 employees would be required to collect and report aggregated W-2 data and hours worked, based on gender, race, and ethnicity, in 10 job categories, across 12 pay ranges, for each of a company’s physical locations.

The one issue left unanswered by Judge Chutkan’s March 4 Order was when the Equal Employment Opportunity Commission (“EEOC”) was required to collect the employee pay data. This morning, Judge Chutkan, held that the Commission had to collect the data by September 30, 2019. The EEOC has indicated it will make the collection portal available by July 15 and provide information and training to employees prior to that date.

The clock is ticking and, absent a successful appeal of Judge Chutkan’s March 4 decision, employers should now be collecting the data required to be included in the EEO-1 form and be prepared to file those reports on or before September 30. Members of our Firm’s Labor & Employment Practice Group are available to assist in navigating the EEO-1 Form.

Quick Flashback—NLRB Overruled Obama Board’s “Independent Contractor” Test

Rosemary McKenna

Earlier this year, the National Labor Relations Board (“NLRB” or “the Board”)—with its 3-to-1 Republican-appointed majority—returned to its long-standing common-law test for determining whether workers are independent contractors (“ICs”) or employees, expressly overruling an Obama-era decision, which it said impermissibly altered the test by severely limiting the significance of “entrepreneurial opportunity” to the analysis. The importance of “independent contractor” status lies in the fact that ICs are not covered by the National Labor Relations Act (“NLRA”).

In SuperShuttle DFW, Inc. and Amalgamated Transit Union Local 1338 (Case No. 16-RC-010963), the Trump Board addressed the issue of whether franchisees who operated shared-ride vans were ICs and thus excluded from coverage under the NLRA. Relying on common-law agency analysis, the Board upheld a regional director’s decision finding the franchisees to be ICs. That traditional common-law analysis involves application and consideration of the following factors: Continue reading “Quick Flashback—NLRB Overruled Obama Board’s “Independent Contractor” Test”

Finally! U.S. Supreme Court to Weigh in on Title VII LGBTQ+ Protection

Jason E. Reisman and Mark Blondman

Just this morning, the U.S. Supreme Court finally agreed to hear three cases from the circuit courts that split on whether Title VII of the Civil Rights Act of 1964 protects against discrimination in the workplace based on sexual orientation and gender identity. The basic question boils down to whether the word “sex” includes a protection for LGBTQ+ employees.

EEOC Initiative/Trigger. Though there have been efforts over the last 50+ years to seek such protection under Title VII, the true impact came from the Equal Employment Opportunity Commission’s (“EEOC”) push beginning in 2012, when it issued an administrative ruling holding that gender identity discrimination constitutes sex bias and therefore is protected. As everyone probably knows, in Hively v. Ivy Tech Community College, the U.S. Court of Appeals for the Seventh Circuit jumped into the fray with both feet in 2017, finding that Title VII’s “sex” does indeed include sexual orientation. In fact, before the full Seventh Circuit heard that case, a three-judge panel on that court had stated that it was a “paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act”—a reference to same sex marriage being legal. Continue reading “Finally! U.S. Supreme Court to Weigh in on Title VII LGBTQ+ Protection”

“Obesity Alone” Is Not a Disability under the New Jersey Law against Discrimination

Rosemary McKenna

Earlier this month, a three-judge panel for the Appellate Division of the Superior Court of New Jersey affirmed a 2018 trial court decision granting summary judgment against a self-described obese former bus driver for defendant Community Bus Lines, Inc. (“Community”), and dismissing the driver’s claim for violation of the New Jersey Law Against Discrimination (“NJ LAD”). In doing so, the appellate court held that “obesity alone is not protected under the NJ LAD as a disability unless it has an underlying medical cause.” Because plaintiff, in part, failed to present any direct or circumstantial evidence that defendants perceived the driver as disabled due to a medical condition that caused him to be overweight, the appellate court found his claim was without merit.

Case Background

The plaintiff in this matter worked as a bus driver for Community for 10 years during which time he weighed between 500 and 600 pounds. To maintain his status as an active bus driver, he was required to undergo a medical examination every two years and obtain medical certification verifying his fitness to drive. In 2015, a doctor certified by the United States Department of Transportation (“DOT”) conducted plaintiff’s examination and temporarily disqualified him from driving a bus pending further testing. The plaintiff never followed through to complete the required additional testing and was therefore placed “out of service.” Despite his failure to schedule the follow-up testing, plaintiff’s supervisor referred him for a second opinion to another doctor, who confirmed the prior conclusions and found that further testing was needed before a medical certification could be issued. Neither doctor who examined plaintiff determined that he was disabled but only that further testing was required before he could be certified. Plaintiff again did not pursue the required testing and remained on leave. Continue reading ““Obesity Alone” Is Not a Disability under the New Jersey Law against Discrimination”

Minimize Litigation Risks When Using Biometric Data

Ana Tagvoryan, Brooke T. Iley, and David J. Oberly

The following article was published on SHRM.org.

This is the second article in a two-part series on biometric technology and the law. The first article explains the legal requirements for using biometrics in the workplace. This article provides tips on avoiding liability.

Under various state laws, the potentially extensive legal exposure to individual and class-action lawsuits stemming from the collection, storage and use of biometric data should give employers pause before they implement biometric-data programs in the workplace.

Companies that acquire and use biometric data face the thorny task of complying with an intricate web of regulations governing the use of that data—a task that will only become more difficult as more states adopt their own versions of biometric data privacy legislation.

A new wave of biometric-data lawsuits, particularly in Illinois, will likely build as a result of the Illinois Supreme Court’s Jan. 25 ruling in Rosenbach v. Six Flags Entertainment Corp., No. 123186, which determined that plaintiffs can pursue claims for mere technical violations of Illinois’ Biometric Information Privacy Act (BIPA), even absent any actual injury or harm. Many lawsuits have not centered on challenges to employers’ use of biometric data but instead have focused on the collection of such data.

Fortunately, employers can implement several best practices to minimize the risk of becoming embroiled in litigation stemming from the use of workers’ biometric data. Continue reading “Minimize Litigation Risks When Using Biometric Data”

Learn the Rules on Employers’ Use of Biometric Data

Ana Tagvoryan, Brooke T. Iley, and David J. Oberly

The following article was published on SHRM.org.

This is the first article in a two-part series on biometric technology and the law. This article explains the legal requirements for using biometrics in the workplace. The second article provides tips on avoiding liability.

With the recent rapid advancement of biometric technology, more employers have begun relying on biometric data to accomplish a range of objectives in the workplace.

According to a 2018 survey by Gartner, 6 percent of U.S., European and Canadian companies surveyed tracked workers using biometrics.

Employers who use biometrics can achieve real economic and security benefits, but the practice comes with litigation risks.

Three states—Illinois, Texas and Washington—have enacted laws regulating biometric data to protect employee privacy concerns. An individual’s biometric information is not a secure identifying feature once it has been compromised. Continue reading “Learn the Rules on Employers’ Use of Biometric Data”

Trifecta! DOL Issues Proposed “Employer-Friendly” Joint Employer Rule

Jason E. Reisman

Yesterday, the U.S. Department of Labor (“DOL”) completed the wage and hour trifecta, issuing the third of its critically acclaimed proposed rules—this one redefines (or clarifies, if you prefer) the regulations addressing the concept of “joint employment.” Joint employment under the Fair Labor Standards Act (“FLSA”) is an important concept as it often is used to hold multiple entities liable for the minimum wage and overtime violations relating to a group of employees. The existing regulations have not been materially updated in more than 60 years—needless to say, the nature and scope of business interactions have changed materially over that time. Continue reading “Trifecta! DOL Issues Proposed “Employer-Friendly” Joint Employer Rule”

DOL Pulls Ripcord—Proposed Rule Clarifying “Regular Rate” Parachutes In

Jason E. Reisman

Yesterday, as anticipated (see our prior blog post here), the U.S. Department of Labor (“DOL”) released its proposed guidance to clarify the rules regarding what is and is not required to be included in the “regular rate of pay” (“RROP”). Remember, the RROP is the rate used for the calculation of overtime pay to non-exempt workers.

Though completely unexpected when the DOL initially announced its plan to clarify these rules, employers will undoubtedly be pleased by the effort. Nothing—from the employer standpoint—is really ever perfect, but this is progress. Originally targeted to be released in December 2018, like many other DOL projects, it was delayed a bit.

According to the DOL’s announcement, this proposal attempts to clarify that employers can exclude the following from the RROP:

  • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services;
  • payments for unused paid leave, including paid sick leave;
  • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
  • reimbursed travel expenses that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System and that satisfy other regulatory requirements;
  • discretionary bonuses, by providing additional examples and clarifying that the label given a bonus does not determine whether it is discretionary;
  • benefit plans, including accident, unemployment, and legal services; and
  • tuition programs, such as reimbursement programs or repayment of educational debt.

Though we’re still working our way through the proposal, we are hopeful that it actually does address certain items that have long created quagmires for employers. Of course, the proposal will be subject to 60 days of public comment. Then, once the DOL reviews all comments, it will issue a final rule. Please stay tuned for further updates as this process continues!

The Uncertain Future of Gender Pay Reporting

Mark Blondman and Emery Gullickson Richards

As you may recall, in 2016, the Equal Employment Opportunity Commission (“EEOC”) issued a Rule requiring private employers with more than 100 workers to include certain pay data, based on gender, race, and ethnicity, on their Form EEO-1s. The Rule, which purportedly was aimed at encouraging employers to ensure that compensation was directly related to jobs being performed and as a means of combating pay disparities, was slated to go into effect with the filing of EEO-1 forms in March 2018.

Under President Trump, the Office of Management and Budget (“OMB”) blocked enforcement of the Rule and announced that decision in August 2017.

On March 4, 2019, Judge Tanya Chutkan of the United States District Court for the District of Columbia, in response to a 2017 lawsuit filed by advocacy groups including the National Women’s Law Center, issued an Opinion and Order directing that the OMB reinstate the EEOC’s 2016 pay reporting Rule. Continue reading “The Uncertain Future of Gender Pay Reporting”