NLRB joint employer rule frozen

In a case entitled Chamber of Commerce of USA v. NLRB, a federal court in Texas has struck the NLRB’s new joint employer rule. The court held that the NLRB’s new rule goes too far in that it permits evidence of indirect control alone to be sufficient to establish a joint employer relationship: “That would treat virtually every entity that contracts for labor as a joint employer because virtually every contract for third-party labor has terms that impact, at least indirectly, at least one of the specified ‘essential terms and conditions of employment.'”

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Honored to have been selected for by Super Lawyers in Colorado. Colorado Super Lawyers notes “Colorado Super Lawyers list (is) an honor reserved for those lawyers who exhibit excellence in practice. Only 5% of attorneys in Colorado receive this distinction.” Thank you!

DOL issues final independent contractor rule

The DOL issued a final independent contractor rule, which reverses the more business-friendly Trump-era rule. Together with its new rule, the DOL issued a FAQ explaining the rule and a small business “compliance guide.”

According the DOL, the new rule differs from its Trump-era predecessor “in several important ways,” specifically, the DOL says this new rule

  • Returns to a totality-of-the-circumstances economic reality test, where no single factor or group of factors is assigned any predetermined weight;

  • Considers six factors (instead of five), including the investments made by the worker and the potential employer;

  • Provides additional analysis of the control factor, including a detailed discussion of how scheduling, supervision, price-setting, and the ability to work for others should be considered when analyzing the nature and degree of control over a worker;

  • Returns to the Department’s longstanding consideration of whether the work is integral to the employer’s business (rather than whether it is exclusively part of an “integrated unit of production”);

  • Provides additional context to some factors, including a discussion of exclusivity in the context of the permanency factor and initiative in the context of the skill factor; and

  • Omits a provision from the 2021 Independent Contractor Rule which minimized the relevance of an employer’s reserved but unexercised rights to control a worker.

The DOL’s rule applies to FLSA wage-hour issues under its jurisdiction. However, it’s noted that other agencies under the Biden administration, for example the NLRB, have also adopted similarly narrow independent contractor rules.

CDLE issues new COMPS Order 39 with poster, new PAYCALC order, and related updates

The CDLE has issued its new COMPS Order 39 with a redline showing changes made since #38 and a new poster, as well as related explanatory information. Employers who issue new handbooks, manuals, policies, etc., for which they obtain signatures are reminded to update and issue with them the new #39 poster. (Note: The CDLE has advised that its new COMPS Order 39 poster has been issued but not yet released on its website, where it will shortly be available in multiple languages.)

Along with the new COMPS Order 39, the CDLE has also issued its updated PAYCALC Order for 2024 with the new minimum wage, exemption, and related required wage rates for Colorado employers, as well as a redline showing the changes made to the last PAYCALC Order and related explanatory information.

NLRB returns to broad joint employment rule, narrowing availability of contractor usage

In a new regulatory rule, the NLRB has returned to a broad joint employer rule, which narrows the availability of contractor usage. The new rule no longer requires that a putative joint employer actually exercise control over the workers, now it returns to finding adequate potential, even never exercised control, based arguably even solely on a theoretical reading of the parties’ contracts and perhaps broader. The Board illustrates this in its new rule by expressly stating both “reserved” and “indirect” control will be sufficient to establish a joint employer relationship. The new rule looks to seven “essential” fact issues to be considered in the context of the putative joint employer’s involvement in the worker’s wages, hours and working conditions:

  1. wages, benefits, and other compensation;
  2. hours of work and scheduling;
  3. the assignment of duties to be performed;
  4. the supervision of the performance of duties;
  5. work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  6. the tenure of employment, including hiring and discharge; and
  7. working conditions related to the safety and health of employees.

Seventh Circuit holds employers may, at least in some circumstances, be required to accommodate a disabled worker’s commuting needs

In a very fact-specific opinion that will likely prove challenging to apply to future fact patterns, the EEOC argued and a 3-judge panel of the Seventh Circuit held that employers may, at least in some circumstances, be required to reasonably accommodate a disabled worker’s commuting needs. The decision is titled EEOC v. Charter Communications LLC.

The plaintiff had a vision disability related to cataracts in both eyes that limited his ability to drive at night. He worked in a call center and asked to have his work schedule moved up by a couple hours, from noon-9:00 PM to 10:00 AM-7:00 PM, so that he could commute during daylight hours while he tried to find a solution. Specifically, the court noted that the company had suggested to him that he needed to find alternative transportation, specifically public transportation or carpooling with fellow employees. The company agreed to move his schedule up by two hours as requested but only on a temporary 30-day basis during which time he was to research public transportation and carpooling. According to the court, neither option panned out. When he checked on the former, he was told public transportation ended at 9:00 PM, making it not an option if he were to go back to the original schedule, and as for the latter, he said he knew of no fellow workers who lived in the city where he did, which was a 1-hour drive from the workplace. He asked the company for a list of workers who lived by him, so that he could ask them if they would carpool with him, but the company refused to tell him any saying it would be a breach of confidentiality. He then asked for another 30-day extension so he could move closer to the workplace; the company refused the extension, according to the court.

The court held that the company would have to explain its refusal to a jury. In the court’s view, the company had asserted that attendance as scheduled was an essential function; therefore, in the court’s view, the plaintiff wasn’t asking for an accommodation to suit his own personal needs or preferences but rather to help him meet an essential function of the job.

Kimmons was not asking for an unaccountable, work-when-able schedule or a permanent accommodation. He did not demand the company itself transport him to work. He asked only for a temporary work schedule that would start and end two hours earlier while he found time to move closer. A jury could have found his requested accommodation to be reasonable.

As even the Seventh Circuit acknowledged in this decision, its opinion is at odds with a number of other decisions, including one by the Tenth Circuit. The case is therefore ripe for review by the full Seventh Circuit and even the Supreme Court.

USCIS announces new remote I-9 process

During the Covid-era, USCIS was permitting — for the safety of human resources professionals and all individuals involved — I-9’s to be done remotely. That remote process expired with all employers being required to go back and inspect originals of all previously remotely-inspected documents by August 30, 2023. However, the process proved itself so effective that, as a practical matter, USCIS decided to make available and has announced a new remote process that is available to some but not all employers. It is only available under strict procedures dictated by the USCIS. See also the e-Verify instructions for doing this.

For example, and without summarizing all of the procedures:

  • Only employers who participate in e-Verify may use this remote I-9 process. Companies that do not participate in e-Verify may not use this remote process; they must return to live in-person I-9 inspections.
  • Employer who e-Verify and who choose to do remote verifications must then meet all the new requirements. For example,
    • They must use the new I-9 form because it will have to check the box on the new form confirming it used this new “alternative procedure.”
    • They must do the remote inspection by video, live. The employer must, on the video, have the person show them their original I-9 document, confirm it matches what the person previously submitted by email or otherwise, confirm its apparent genuineness, etc.
    • They must then complete the new I-9 form and retain the documents, all as dictated by the government’s requirements.

The government has said it is making available a video tutorial for employers, available to e-Verify companies. Any employer wishing to use this new process should consider watching the government’s tutorial video.

Fifth Circuit eliminates the Ultimate Employment Decision requirement in Title VII discrimination cases

In a case entitled Hamilton v. Dallas County, the Fifth Circuit eliminated the “ultimate employment decision” requirement in Title VII discrimination cases. The case is significant because the requirement for an employer to have taken an actual adverse employment action, in other words to have made some some “ultimate employment decision” that affected the plaintiff’s employment, has been a threshold requirement that allowed judges to review whether a case warranted litigation. Whether judges should even be doing so has itself been an on-going policy debate.

By eliminating this threshold, the Fifth Circuit may have put itself at odds with a number of other courts creating a split that may well rise to the Supreme Court.

The actual impact of this decision — if it withstands Supreme Court review — is arguable since even the Fifth Circuit still requires the plaintiff to prove the discrimination impacted their “hiring, firing, compensation, or other ‘terms, conditions or privileges’ of her employment.” indeed the Fofth Corcuit characterizes its own decision as simply simplifying its own test to bring it in line with other Circuits, which focus on whether there has been a showing of an impact to hiring, firing, etc. In other words, the decision may be more about the semantics of how the Fifth Circuit phrases its test rather than any substantive split.

NLRB announces card-check light rule

Labor advocates have long sought a national card check rule that would require employers to review union-support cards and, if signed by a majority of workers, recognize the union without need for a secret ballot election supervised by the NLRB. This practice has been opposed by those who view it as undermine individuals’ right to express their vote in a secret ballot election without fear of coercion. Labor advocates tho contend the NLRB’s secret ballot election process has itself become unfair and unduly protracted.

In a decision today, entitled Cemex Construction Materials Pacific, LLC, the Board fell short of imposing a card check requirement, and instead held that employers decline to do card check-recognitions at their risk. The Board held that an employer who declines to card check-recognize will, if later — after forcing and winning an election — is found in violation of some other unfair labor practice that warrants a redo of the election, will face an order that shortcuts the need for a redo election and instead will be issued an order that mandates the company to proceed straight to bargaining. In other words employers who decline card check-recognitions will now face, in later ULP charges, the risk of an immediate bargaining order.

Employers are reminded that the Board has recently greatly enhanced the scope and extent of bargaining orders. Thus this new remedy, while short of a card check rule, is itself a substantial development.

One option employers facing this issue may have, when presented with cards, might be to, itself as the employer, immediately file its own petition with the NLRB for a secret ballot election. Issues related to this possible procedural step will need to be clarified in litigation, but may, unions will likely argue, include some consideration of the employer’s good faith evidentiary basis for doubting the cards.

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Honored to be selected for inclusion in the 2024 edition of The Best Lawyers in America®, Employment Law – Management!

NLRB begins requiring negotiation schedules as remedies in mandatory bargaining cases

Continuing its expansion of remedies available under the NLRA, the NLRB has begun to mandate that employers schedule negotiation meetings with unions and even submit to the NLRB post-negotiation status updates. See for example the NLRB’s recent decisions in Crushin’ It LLC Columbus Electric Cooperative, Inc. , and Amerigal Construction Co., Inc.

Here is an example of such language, taken from the Amerigal case:

REMEDY

Having found that the Respondent has engaged in certain unfair labor practices, we shall order it to cease and desist, to bargain on request with the Union and, if an understanding is reached, to embody the understanding in a signed agreement. To ensure that the employees are accorded the services of their selected bargaining agent for the period provided by law, we shall construe the initial period of the certification as beginning on the date the Respondent begins to bargain in good faith with the Union. Mar-Jac Poultry Co.136 NLRB 785 (1962); accord [*4] Burnett Construction Co.149 NLRB 1419 , 1421 (1964), enfd. 350 F.2d 57 (10th Cir. 1965); Lamar Hotel140 NLRB 226 , 229 (1962), enfd. 328 F.2d 600 (5th Cir. 1964), cert. denied 379 U.S. 817 (1964).

Further, having found that the Respondent violated Section 8(a)(5) and (1) by failing and refusing to furnish the Union with requested information that is necessary for and relevant to the Union’s performance of its duties as the exclusive collective-bargaining representative of the unit employees, we shall order the Respondent to furnish the Union with the information that it requested on July 26, 2022.

Additionally, the General Counsel requests that the Respondent be ordered to comply with a bargaining schedule requiring a minimum of 24 hours of bargaining per calendar month, for at least 6 hours per session, until an agreement or lawful impasse is reached or until the parties agree to a respite in bargaining. The General Counsel also requests that the Respondent be required to submit written bargaining progress reports to the Region and the Union every 15 days. As discussed above, the Respondent has unlawfully failed and refused to bargain with the Union for an initial collective-bargaining agreement despite the Union’s repeated requests to bargain over many months. In fact, the Respondent has failed and refused even to meet and/or to schedule any meetings to bargain since July 2022. It also has unlawfully failed and refused to furnish presumptively relevant information that goes to the core of the Union’s duties as the exclusive collective-bargaining representative of the unit employees. Given these circumstances, we find that a bargaining schedule requiring the Respondent to meet and bargain with the Union on a regular and timely basis is appropriate and would best effectuate the purposes of the Act. See Serenethos Care Center LLC d/b/a St. Christopher Convalescent Hospital371 NLRB No. 54 , slip op. at 2-3 (2022) (ordering employer to comply with a bargaining schedule to remedy its unlawful conduct), enfd. mem. NLRB v. Serenethos Care Ctr. LLC, No. 22-70014 , [2022 BL 67034], 2022 U.S. App. LEXIS 5285 (9th Cir. Feb. 28, 2022); All Seasons Climate Control, Inc.357 NLRB 718, 718 fn. 2 (2011) (same), enfd. mem. 540 Fed.Appx. 484 (6th Cir. 2013). Accordingly, we shall order the Respondent, within 15 days of the Union’s request, to bargain for a minimum of 24 hours of bargaining per calendar month, for at least 6 hours per session until the parties reach agreement, lawful impasse, or an agreed-upon respite in bargaining. We shall also require the Respondent to submit written bargaining progress reports to the compliance officer for Region 5 every 15 days and to serve copies of those reports on the Union.

The General Counsel also requests that the Respondent be ordered to mail a copy of the notice to its unit employees because these employees are construction workers who work primarily at locations away from the Respondent’s facility. The General Counsel asserts that a notice mailing is necessary to ensure that all unit employees are informed of the Board’s order. We agree that this remedy is particularly appropriate to the work situation here and shall order the Respondent to mail a copy of the notice to all unit employees employed since July 26, 2022, when the Respondent began its unlawful conduct. See Bevilacqua Asphalt Corp.[*5] 369 NLRB No. 96 , slip op. at 2 (2020) (ordering notice mailing where employer operated a quarry and asphalt plant and certain employees, particularly truckdrivers, did not regularly enter respondent’s office); Abramson, LLC345 NLRB 171, 171 fn. 3 (2005) (ordering notice mailing where unit employees worked on individual construction sites across a two-state region).4

NLRB returns to more aggressive reviews of handbooks and other policy language

Jettisoning a Trump-era decision that in turn jettisoned an Obama-era approach to handbooks and policies, the NLRB, in a case entitled Stericycle, Inc., has returned to the more aggressive Obama-era approach. Now, the Board will return to reviewing the language of policies on their face for whether the Board believes the language could pose “a reasonable tendency to chill” NLRA-protected actions, and if so, find the employer in violation of the NLRA, even if the employer had no such intent. Revising the Obama-era approach slightly, now, employers will be able to assert an affirmative defense if they can prove that the language was “narrowly tailored” to advance a “legitimate and substantial business interest,” which it was otherwise unable to further without the language.

(O)ur (new) standard requires the General Counsel to prove that a challenged rule has a reasonable tendency to chill employees from exercising their Section 7 rights. We clarify that the Board will interpret the rule from the perspective of an employee who is subject to the rule and economically dependent on the employer, and who also contemplates engaging in protected concerted activity. Consistent with this perspective, the employer’s intent in maintaining a rule is immaterial. Rather, if an employee could reasonably interpret the rule to have a coercive meaning, the General Counsel will carry her burden, even if a contrary, noncoercive interpretation of the rule is also reasonable. If the General Counsel carries her burden, the rule is presumptively unlawful, but the employer may rebut that presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer proves its defense, then the work rule will be found lawful to maintain.

California Supreme Court permits “representative” claims in court under PAGA even though “individual” claims under PAGA must be arbitrated c

Last year, the Supreme Court ruled, in Viking River Cruises, that a mandatory pre-dispute arbitration agreement barred the plaintiff from pursuing claims under California’s statue called “PAGA” (Private Attorneys General Act). PAGA is a statutory scheme that lets individuals pursue claims, often compared to class-/collective-actions, for labor code violations and recover remedies including penalties not only on their own behalf but as representatives of others and even as “private attorneys general” acting on behalf of the State of California. In a series of legal and legislative maneuvers, the California courts and legislatures had interpreted and revised PAGA to try to permit such claims to be filed in court, despite mandatory pre-dispute arbitration agreements. In response, in Viking River Cruises last year, the Supreme Court held, no, such agreements mandate arbitration, are enforceable and therefore block PAGA claims in court.

In this case, Adolph v. Uber Technologies, Inc., the California Supreme Court has seemingly turned Viking River Cruises on its head. The California Supreme Court recognized that Viking River Cruises blocks plaintiffs from asserting PAGA claims in court and requires them to pursue them in arbitration, but the California Supreme Court held it does so only for claims asserted on the plaintiff’s own behalf.

In short, if Adolph stands, states could arguably enact legislation like PAGA to permit individuals to pursue claims for their own benefit in arbitration and in addition pursue the same claims in court as representatives of their fellow workers.

The California Supreme Court noted that California courts can, in their discretion, stay the court proceeding to see if the plaintiff wins in arbitraiton: If so, his representative claim in court could then proceed, and if not, that claim would need to be dismissed.

Colorado employers, brace for 2023 state legislative developments

The Colorado state legislature enacted a crop of new laws affecting employers in 2023, including the following:

  • The POWR Act (Protecting Opportunities and Workers’ Rights Act)
  • Revisions to existing job/promotional opportunity posting and disclosure requirements
  • Expansion of reasons for taking HFWA/paid sick leave
  • Age-related questions in job applications
  • Penalties related to wrongful refusals to allow use of service animals by disabled individuals
  • State actions to recover reimbursement of overdue wage payments
  • Expansion of military leave.

The remainder of this blog post summarizes some of the features of these new developments.

  • POWR Act (Protecting Opportunities and Workers’ Rights Act) will take effect August 7, 2023: The Colorado legislature summarized this wide-ranging law, as follows:
  • Directs the Colorado civil rights division (division) to include “harassment” as a basis or description of discrimination on any charge form or charge intake mechanism;
  • Adds a new definition of “harass” or “harassment” and repeals the current definition of “harass” that requires creation of a hostile work environment;
  • Adds protections from discriminatory or unfair employment practices for individuals based on their “marital status”;
  • Specifies that in harassment claims, the alleged conduct need not be severe or pervasive to constitute a discriminatory or unfair employment practice;
  • For purposes of the exception to otherwise discriminatory practices for an employer that is unable to accommodate an individual with a disability who is otherwise qualified for the job, eliminates the ability for the employer to assert that the individual’s disability has a significant impact on the job as a rationale for the employment practice;
  • Specifies the requirements for an employer to assert an affirmative defense to an employee’s proven claim of unlawful harassment by a supervisor; and
  • Specifies the requirements that must be satisfied for a nondisclosure provision in an agreement between an employer and an employee or a prospective employee to be enforceable; and
  • Requires an employer to maintain personnel and employment records for at least 5 years and, with regard to complaints of discriminatory or unfair employment practices, to maintain those records in a designated repository.

When reviewing the legislature’s summary of its new POWR Act, Colorado employers may wish to note the following fleshouts on some of those points:

  • In revising the definition of prohibited “harassment,” the legislature has deleted the longstanding threshold requirement that harassment be “severe or pervasive.” In doing so the legislature noted that some threshold still needed to be met, in that “petty slights, minor annoyances, and lack of good manners” will generally not suffice. Future litigation will need to analyze how this new standard requiring more than “petty slights, minor annoyance, and lack of good manners” is different than the longstanding “severe or pervasive” standard. Further complicating future litigation will be the legislature’s observation in the POWR Act that this new standard will, like the prior standard, require an analysis of “the totality of the circumstances.”
  • Additionally, in revising the definition of “harassment,” the legislature has revised the longstanding Ellerth-Faragher defense, in cases of prohibited harassment by supervisors, for employers who train against and take prompt and effective remedial steps to eliminate prohibited harassment. Now, Colorado law will require an employer, when sued for sexual harassment by a supervisor, in order to qualify for this affirmative defense, to prove that they had a “program” in place that is “reasonably designed” to “prevent” unlawful harassment and to “deter” unlawful harassment and to protect” employees from unlawful harassment, additionally, that they actually do take “prompt, reasonable action to investigate or address” complaints and incidents, and further that they actually do take “prompt, reasonable remedial actions, when warranted,” and also that they have “communicated the existence and details of the program.”
  • Marital status itself will be a protected class.
    • The POWR Act does not define whether “marital status” means the status of being married, or whether it would include the status of being not married, being in a partnership relationship, being in a dating relationship, etc.
  • The changes that apply to a “nondisclosure provision” are multi-faceted and warrant immediate review of any agreement that includes confidentiality language, whether an employment agreement, an NDA (non-disclosure agreement), a non-compete or non-solicit, etc., if “entered into or renewed on or after” August 7, 2023.
    • While employers will still be able to require confidentiality language that protects trade secrets, any “nondisclosure provision” will be void if it goes farther than that and “limits the ability of the employee or prospective employee to disclose, either orally or in writing, any alleged discriminatory or unfair employment practice.”
    • The legislature provided one exception for “nondisclosure provisions” that:
      • Applies “equally to all parties to the agreement,” apparently in other words, meaning confidentiality may be required if there is mutuality as to “all parties to the agreement,”
      • Expressly states
        • that it does not restrain the employee or prospective employee from disclosing
          • the underlying facts of any alleged discriminatory or unfair employment practice,” apparently, to anyone,
          • “the existence and terms of a settlement agreement” to
            • “the employee’s or prospective employee’s immediate family members, religious advisor, medical or mental health provider, mental or behavioral health therapeutic support group, legal counsel, financial advisor, or tax preparer,”
            • “any local, state, or federal government agency for any reason, including disclosing the existence and terms of a settlement agreement, without first notifying the employer,”
            • anyone “in response to legal process, such as a subpoena to testify at a deposition or in a court, including disclosing the existence and terms of a settlement agreement, without first notifying the employer,” or
            • anyone “for all other purposes as required by law,”
        • that, as for agreements that also contain a nondisparagement provision,
          • “disclosure of the underlying facts of any alleged discriminator or unfair employment practice within the parameters specified (above) does not constitute disparagement,”
          • if “the employer disparages the employee or prospective employee to a third party, the employer may not seek to enforce the nondisparagement or nondisclosure provisions of the agreement or seek damages against the employee or any other party to the agreement for violating those provisions, but all other remaining terms of the agreement remain enforceable,”
      • As for agreements that also contain a liquidated damages provision, the liquidated damages provision’s amount must be
        • “reasonable and proportionate in light of the anticipated actual economic loss that a breach of the agreement would cause,”
        • “varied based on the nature or severity of the breach,” and
        • not “punitive,”
      • Additionally, an “addendum” to the agreement must
        • be signed by all parties to the agreement
        • wherein each party must “attest to compliance with” new Colorado Revised Statute section 24-34-407(1)(a) (summarized above).
    • Not only does the failure to comply with this new law invalidate the non-disclosure (and non-disparagement) language (and related language like any related liquidated damages clause), but merely providing it to an employee or prospective employee also subjects an employer to claims by the employee, prospective employee, as well as the CDLE for damages, costs, attorney fees, penalties including a $5,000 penalty, which penalty may be reduced including to $0.00 if the employer proves “good faith.”
  • The “repository” of complaints that will now be required to be maintained for at least 5 years must contain all written and oral complaints, the identity of each complainant (if known, in other words, if not anonymous), the identity of the alleged wrongdoer, and the substance of the complaint.
    • This repository must be kept separate from personnel records.
    • This repository is not open to public inspection.
    • However, employers should anticipate that all federal, state and local EEO agencies will demand to see it (as will litigants through discovery), though it is not clear if it must be made available to any agency other than the CDLE.

 

  • Job/Promotional Posting Requirements: The Colorado legislature also amended its relatively recent job opening and promotional opportunity posting requirements, including, effective January 1, 2024:
    • As for “job opportunity” postings, employers have been required to post pay ranges, including benefits, now they will be required to post, in addition, the anticipated window when applications  will close.
      • A “job opportunity” is defined to be “a current or anticipated vacancy for which the employer is considering a candidate or candidates or interviewing a candidate or candidates or that the employer externally posts.”
      • A “vacancy” is defined to be “an open position, whether as a result of a newly created position or a vacated position.”
      • After filling a job opportunity, employers must disclose the following,
        • The name of the individual selected,
        • Their new job title,
          • And, if they were an internal hire, their former job title,
        • Information on how to apply for similar positions in the future.
        • Such notice must be given at least to the employees with whom that individual will work regularly
        • Such notice is not required if it would violate the selected individual’s privacy rights, health or safety.
    • No notice will be required for “career progressions,” which phrase is defined as
      • “a regular or automatic movement from one position to another,”
      • which is “based on time in a specific role or other objective metrics,”
      • so long as the employer has already disclosed to “all eligible employees the requirements for career progression, in addition to each position’s terms or compensation, benefits, full-time or part-time status, duties, and access to further advancement.”
    • Out-of-state employers will be partially and temporarily exempted from job posting requirements until July 1, 2029, so long as the company
      • has no physical location in Colorado,
      • has fewer than 15 workers in Colorado,
        • “all of whom work only remotely,”
      • and posts any “remote job opportunities.”

 

  • HFWA/paid sick leave: In addition to existing HFWA paid sick leave requirements, Colorado workers will, effective August 7, 2023, be able to take HFWA paid sick leave for the following additional reasons:
    • grieving, funerals and memorials, financial and legal matters after the death of a family member,
    • caring for a family member whose school or place of care has been closed due to inclement weather, loss of power, heat, water, or other unexpected events,
    • evacuations of the worker’s residence due to inclement weather, loss of power, heat, etc.

 

  • Job applications: Effective July 1, 2024, job applications in Colorado may not include questions related to age, date of birth, dates of attendance at education programs or graduation from them, unless required by federal, state or local law. (For readers who may have seen discussion of this new law, SB 23-058, in other resources, it has been colloquially referred to as the “Don’t Ask Applicants’ Age” law).

 

  • Penalties related to service animals: HB 23-1032 revised the remedies for refusing to allow use of a service animal by disabled individuals to now include actual damages or a fine of $3,500 per violation.

 

  • State actions to recover reimbursement of overdue wage payments: SB 23-231 allows the CDLE, through a t0-be-established wage theft enforcement fund, to pay employees overdue wages, if overdue by at least six months, then recover reimbursement from employers.

 

  • Military leave: HB 23-1045 allows Colorado workers in the Colorado National Guard or U.S. reserves to take up to three workweeks (instead of Colorado law’s prior 15 days) of military leave for military training and, at their discretion, to take, as they do, available paid leave.

Supreme Court holds First Amendment protects expressive speech even in commercial setting, despite anti-discrimination statutory provisions

In 303 Creative, LLC v. Elenis, the Supreme Court held that the First Amendment protects expressive speech even in commercial setting, despite anti-discrimination statutory provisions. The highly controversial decision came in a party-line split decision and is sure to draw more litigation and eventual review by a future Supreme Court. Even the majority opinion noted its ruling fell in line with such previous decisions as one that protected Nazi speech and another that protected protests at soldiers’ funerals. The majority failed to provide any explanation or boundaries that future courts can use to identify protected “expressive speech,” holding there was no need to do so because, in this case, it contended, that the State of Colorado had stipulated the speech in this case — hypothetical speech since the case was filed by the speaker’s company prior to being asked to engage in any particular kind of speech — qualified as “expressive speech.”

Future courts will have to grapple not only with the soundness of the majority’s decision but its reach in cases where the parties have not entered into stipulations as far-reaching as the State of Colorado had here. For example, as the majority noted, the stipulations here included the following:

45. Through 303 Creative, Ms. Smith offers a variety of creative services to the public, including graphic design, and website design, and in concert with those design services, social media management and consultation services, marketing advice, branding strategy, training regarding website management, and innovative approaches for achieving client goals.
46. All of Plaintiffs’ graphic designs are expressive in nature, as they contain images, words, symbols, and other modes of expression that Plaintiffs use to communicate a particular message.
47. All of Plaintiffs’ website designs are expressive in nature, as they contain images, words, symbols, and other modes of expression that Plaintiffs use to communicate a particular message.

It is unlikely future litigants will be willing to enter into such stipulations in contended cases. As the dissent noted, the case also raised an issue of ripeness, which the majority held was resolved by the parties’ far-reaching stipulations, but absent such stipulations in future cases, ripeness may will be a significant challenge for would-be speakers’ rights proponents.

Supreme Court prohibits affirmative action at undergraduate college level

Reversing its precedent called Grutter, the Supreme Court, in a decision split along political lines, rejected affirmative action.

The majority held that Grutter had permitted affirmative action only temporarily, requiring that such programs have an end date.

To manage these concerns, Grutter imposed one final limit on race-based admissions programs. At some point, the Court held, they must end. Id., at 342. This requirement was critical, and Grutter emphasized it repeatedly. “[A]ll race-conscious admissions programs [must] have a termination point”; they “must have reasonable durational limits”; they “must be limited in time”; they must have “sunset provisions”; they “must have a logical end point”; their “deviation from the norm of equal treatment” must be “a temporary matter.” Ibid. (internal quotation marks omitted). The importance of an end point was not just a matter of repetition. It was the reason the Court was willing to dispense temporarily with the Constitution’s unambiguous guarantee of equal protection. The Court recognized as much: “[e]nshrining a permanent justification for racial preferences,” the Court explained, “would offend this fundamental equal protection principle.” Ibid.; see also id., at 342–343 (quoting N. Nathanson & C. Bartnik, The Constitutionality of Preferential Treatment for Minority Applicants to Professional Schools, 58 Chi. Bar Rec. 282, 293 (May–June 1977), for the proposition that “[i]t would be a sad day indeed, were America to become a quota-ridden society, with each identifiable minority assigned proportional representation in every desirable walk of life”).

Grutter thus concluded with the following caution: “It has been 25 years since Justice Powell first approved the use of race to further an interest in student body diversity in the context of public higher education. . . . We expect that 25 years from now, the use of racial preferences will no longer be necessary to further the interest approved today.” 539 U. S., at 343.

Finding that now “(t)wenty years later, no end is in sight,” the majority reversed Grutter holding that affirmative action will no longer be available to universities and colleges at the undergraduate level. Rather all admission decision will need to be made on a race-neutral basis.

The deeply partisan split suggests this case will be revisited by future Supreme Courts.

NLRB returns to stricter pre-Trump era independent contractor test

In The Atlanta Opera, Inc., the NLRB reversed its Trump-era precedent SuperShuttle (2019) regarding independent contractors and returned to its Obama-era precedent FedEx II. No longer will the Board be guided by whether the putative independent contractor has a significant “entrepreneurial opportunity” in the relationship. Under this new (old) standard the Board, the Board found that makeup artists, wig artists, and hairstylists at the Opera were employees not independent contractors, permitting them to organize a union.

Supreme Court revises undue hardship test for religious accommodations under Title VII

In Groff v. DeJoy, the Supreme Court revised the undue hardship test for religious accommodations under Title VII.

Both the ADA and Title VII have an undue hardship test. Title VII requires employers to reasonably accommodate an employee’s religious beliefs, unless the accommodation would pose an undue hardship on the employer. The ADA has similar language regarding accommodation of an employee’s disability. However, the two statutes’ undue hardship tests are very different. Title VII’s test has been that anything more than a minimal burden is undue; whereas, the ADA’s requires proof of a “significant difficulty or expense,” which has been interpreted by the courts and EEOC as a much higher bar.

Title VII’s much lower undue hardship test for religion has been called the “de minimis” test. In this case both parties agreed that the de minimis test was unclear and needed revision. The plaintiff argued that the Court should adopt the ADA’s disability approach, but the Supreme Court rejected that argument, holding that the ADA’s test was too stringent and contrary to Title VII.

Instead the Supreme Court held that Title VII’s undue hardship test will now require employers to prove that a religious accommodation “would result in substantial increased costs in relation to the conduct of its particular business.”

The Supreme Court did not explain how this new “substantial cost” test should be applied, except to note that cost of the potential accommodation and size of the business are at least two of the factors. Rather, the Supreme Court remanded the case to the lower court for further analysis.

DOL issues guidance regarding FLSA’s PUMP Act

The DOL has issued a Field Assistance Bulletin under FLSA’s PUMP Act. The PUMP Act is a federal law that applies in addition to any state laws. The PUMP Act requires workers be allowed reasonable breaks to express, for up to one year after the birth of a child, in a private space, not a bathroom. This Field Assistance Bulletin is in addition to the DOL’s Fact Sheet 73.

The Field Assistance Bulletin confirms that determining a “reasonable” amount of time to express is an individualized inquiry that will vary by employee and by workplace, it may also vary during the protected one year period in which the PUMP Act requires the break. To illustrate, the Field Assistance Bulletin says one woman (see example named “Irina”) may require 4 20-minute breaks at first then only 2 20-minute breaks after the baby is 6 months old.

Because the “pump break” (which is DOL’s phrasing) is required as “reasonable” in each person’s circumstances, an employer cannot require that the mother express only during scheduled breaks.

An employee and employer may agree to a certain schedule based on the nursing employee’s need to pump, but an employer cannot require an employee to adhere to a fixed schedule that does not meet the employee’s need for break time each time the employee needs to pump. Additionally, any agreed-upon schedule may need to be adjusted over time if the nursing employee’s pumping needs change.

The Field Assistance Bulletin explains that, for non-exempt workers, the pump break must be paid if it is for 20 minutes or less. Additionally if the non-exempt employee is interrupted during an otherwise unpaid pump break, the entire break must be paid.

Julia is (a non-exempt employee who is) on a pump break when she receives a call on her work cell phone from a coworker who provides her with instructions regarding a work project. After she finishes the work call, Julia completes her pump break. Because Julia was not relieved from duty, the time she spent on the call must be counted as hours worked.

Pump breaks for exempt employees must be paid in the sense that they cannot trigger a reduction in the worker’s guaranteed salary.

Cameron is a salaried exempt administrative employee at an assisted living center who has a four-month-old child. Cameron takes three pump breaks a day. Cameron’s employer cannot deduct the time used for pump breaks from their salary

Eleventh Circuit creates circuit split in failure-to-accommodate cases, inviting Supreme Court review

In Beasley v. O’Reilly Auto Parts, the Eleventh Circuit rejected the argument that failing to accommodate a disabled employee under the Americans with Disabilities Act is itself actionable. The court held that a plaintiff must also prove that he suffered an adverse employment action affecting the terms, conditions or privileges of employment, such as discharge, discipline, demotion, cut in pay, etc.

The Eleventh Circuit’s decision is opposite to the Tenth Circuit’s decision in Exby-Stolly, which was itself a split decision. Therefore, it creates a circuit split that now invites review by the Supreme Court.

Colorado Court of Appeals holds that a banquet service fee is not a tip and therefore banquet server is not a tipped employee

The Colorado Court of Appeals held that a banquet server was entitled to overtime because he was not exempt under Colorado’s wage-hour laws as a tipped employee. The employer charged a service fee of 22% that was shared with all the servers, including plaintiff, allowing him to earn between $11.36 and $33.05 per hour depending on the amount of banquet sales.

Even though the service charge varied with the amount of sales, as a tip generally does, and even though in the, in the aggregate, it was well in excess of minimum wage, the court held that it did not constitute a tip because, because unlike a tip, which must be voluntary, banquet clients could not decide whether or how much of it to pay. Rather the company simply charged all banquet clients 22% of food and drink.

Additionally, the court rejected the company’s argument at the banquet server was exempt as a sales employee. The company had argued that by providing excellent service the banquet server enhanced sales, but the Court noted he had no actual sales responsibilities.

The case is of particular interest, because it illustrates how Colorado’s new wage-hour laws are likely to be applied by the CDLE and Colorado courts.

First the court was very clear that it was not deciding the case from scratch (“de novo”). Rather than the court explained, it was required to defer to the CDLE’s hearing officer’s decision, unless it was proven to be unsupported by substantial evidence or contrary to the plain meaning of Colorado’s wage-hour laws. The court went to some length to explain that it thought the company had raised a good argument that the service charge should have been considered a tip. But because the issue was arguable either way, the court felt it was required to defer to the CDLE’s hearing officer. 

Second the court noted that the case actually began with the plaintiff, incorrectly, trying to argue that he was, in fact, tipped. When he filed his claim, he argued that he had been shorted the amounts due him under Colorado’s tipped employee laws. When the CDLE investigated, it determined he was wrong, that he wasn’t tipped. But the CDLE didn’t stop there. Rather, it restructured his claim, then reconsidered his circumstances under the non-tipped employee wage-hour laws, and under those laws, laws that the plaintiff apparently had not himself put at-issue, the CDLE awarded him overtime under its own theory.

Thus, the case illustrates how the new Colorado wage-hour laws allow the CDLE broad discretion not only to decide the wage-hour claims filed before it, but also to decide how to structure those wage-hour claims in order to best award relief it determines is owed.

The case was Brennan v. Broadmoor Hotel, Inc.

Honored to be named in Chambers for 2023!

Honored to be named in Chambers for 2023!

DHS and ICE remind employers to manually inspect, by August 30, 2023, all I-9 documents accepted remotely during pandemic

During the pandemic, DHS and ICE permitted employers to inspect documents remotely to comply with work-from-home COVID-19 precautions. Now that the pandemic is expiring, DHS and ICE are reminding that is no longer an option and actual inspection of such records will now be required. Specifically, DHS and ICE announced that employers will “have until Aug. 30, 2023, to perform all required physical examination of identity and employment eligibility documents for those individuals hired on or after March 20, 2020, and who have only received a virtual or remote examination under the flexibilities.”

NLRB reverses its approach to abusive conduct by employees

The NLRB has begun under recent Presidential Administrations to swing back and forth on the test applicable to “abusive conduct” by an employee. When the Board has leaned more towards employer rights, it has, in such situations, looked primarily at the employer’s motive for disciplining-discharging an employee who curses, yells, or otherwise engages in “abusive conduct”: Was the employer’s decision to discipline-discharge motivated by the employee’s “abusive conduct” or was it a pretext for firing the employee because she engaged in NLRA protected activity? The employer bears the burden of proving the first part of that test — that its motivating factor was the legitimate business reason — then, if the employer meets that burden, the burden shifts to prove pretext. This is called the Wright Line test.

When the Board leans more towards employee rights, it has instead focused on the employee’s conduct and asked whether it warranted discharge, in doing so the Board considers three factors: “(1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.” This is called the Atlantic Steel test.

In a recent decision titled Lion Elastomers, LLC, the Board announced it will shift back to the Atlantic Steel test.

Readers should note that the Board’s approach to abusive conduct is also dependent on the context of the alleged misconduct. This is its test for cases involving employees engaging in abusive conduct in the workplace towards management. The Board has different tests for other contexts, including specific tests for abusive conduct as part of social media posts and conversations between employees in the workplace as well as for abusive conduct as part of picketing.

NLRB announces enhanced remedies in cases of repeat or egregious violations of the NLRA

In its continuing effort to impose enhanced remedies for violations of the NLRA by employers, the NLRB announced that it has expanded the remedies available in the event of repeat or egregious violations of the NLRA, which the NLRB has summarized in its press release, as follows:

  • Adding an Explanation of Rights to the remedial order that informs employees of their rights in a more comprehensive manner;
  • Requiring a reading and distribution of the Notice and any Explanation of Rights to employees, including potentially requiring supervisors or particular officials involved in the violations to participate in or be present for the reading and/or allowing presence of a union agent during the reading;
  • Mailing the Notice and any Explanation of Rights to the employees’ homes;
  • Requiring a person who bears significant responsibility in the Respondent’s organization to sign the Notice;
  • Publication of the Notice in local publications of broad circulation and local appeal;
  • Requiring that the Notice/Explanation be posted for an extended period of time;
  • Visitation requirement, permitting representatives of the Board to inspect the Respondent’s bulletin boards and records to determine and secure compliance with the Board’s order;
  • Reimbursement of Union’s bargaining expenses, including making whole any employees who lost wages by attending bargaining sessions.

This development was implemented by the Board in its recent decision entitled Noah’s Ark Processors, LLC D/B/A WR Reserve, which the Board summarized in its press release, as follows:

Applying these principles to the facts of the case, the Board upheld the Administrative Law Judge’s decision that the employer bargained in bad faith with the union and determined that—because the employer had also previously been found in violation of the Act, as well as in contempt of a U.S. District Court injunction ordering it to bargain in good faith—the employer’s open hostility toward its responsibilities under Act warranted a broad order and appropriate remedies. In addition to traditional remedies for refusal to bargain, such as rescission of unilateral changes and make-whole relief, and in addition to additional remedies ordered by the judge—including reimbursement of bargaining expenses and a reading of the Board’s notice to employees—the Board ordered: the addition of an Explanation of Rights to the remedial order, a bargaining schedule with written progress reports, reimbursement of the union’s bargaining expenses and earnings lost by individual employees while attending bargaining sessions, extended posting of the Notice and Explanation of Rights for one year, electronic distribution of the Notice and Explanation of Rights, mailing of the Notice and Explanation of Rights, reading of the Notice and Explanation of Rights in English and Spanish by the Respondent’s CEO or by a Board agent in the CEO’s presence, union presence at the Notice reading upon request, distribution of the Notice and Explanation of Rights to employees at the reading, and authorizing a Board agent to enter the Respondent’s facility for a period of one year at reasonable times for the purpose of determining whether the Respondent is in compliance with its posting and mailing requirements under the Board’s order.

As previously noted, the Board’s continuing efforts to expand remedies available under the NLRA is likely to draw continued litigation and appeals.

Seventh Circuit rejects request not to use preferred pronouns as religious accommodation

In Kluge v. Brownsburg Community School Corp., the Fifth Circuit rejected as unreasonable an employee’s refusal to use preferred pronouns as a religious accommodation under Title VII. The employee claimed that his religious beliefs required him to use instead pronouns associated with gender as recorded on birth certificates. Several other employees joined him in the request for religious accommodation from use of pronouns that, in their minds, were inconsistent with gender as recorded on birth certificates. The Fifth Circuit held that accommodating such a request would have constituted an undue hardship.

The employee and employer had attempted, unsuccessfully, a prior middle-ground of allowing him to use only last names, but this was also found to be inappropriate as his use of last names was targeted at individuals who preferred pronouns that he believed were not consistent with birth records. The court agreed that was stigmatizing and humiliating and, therefore, disruptive to the employer’s business. Indeed, the use of last names quickly became, according to the Court, so disruptive and offensive that others who witnessed it complained as well. He then attempted to call everyone by last name only, which, according to the Court, only caused more disruption and offense in the workplace.

The employee then refused to resign saying that continuing his employment was, he believed, part of a religious ministry that he was accomplishing at the non-religious employer’s workplace. Disciplinary action commenced, resulting in his termination, which was upheld by the Court.

NLRB General Counsel issues Memo attempting to clarify Board decision regarding confidentiality clauses in severance agreements

The NLRB General Counsel issued Memorandum GC 23-05 attempting to clarify the Board’s recent decision in McLaren Macomb regarding confidentiality clauses in severance agreements.

The NLRB General Counsel’s Memo can be summarized as making the following broad points:

  • Severance agreements are not prohibited in general.
  • Severance agreements with confidentiality clauses that are narrowly tailored to protect “proprietary or trade secrets information” are enforceable.
  • The NLRB General Counsel’s office will pursue charges against employers who merely offer a severance agreement with confidentiality language that her office believes violates section 7 of the NLRA, whether or not the individual signed it.
  • The NLRB General Counsel’s office will pursue charges against employers involving severance agreements predating McLaren Macomb, in other words, her office will view the Board’s decision as retroactive.
    • Although the Memo did not address the statute of limitations, it is noted that NLRA violations generally carry a 6-month statute of limitations.
  • Because Section 7 of the NLRA protects both unionized and non-unionized employees, the NLRB General Counsel’s office will pursue charges against employers it believes have violated McLaren Macomb even where no union or actual union-organizing activity is involved.
  • When the NLRB General Counsel’s office chooses to prosecute an employer for what it believes is a McLaren Macomb violation, the Memo states her office will seek only to strike the violative language, not the release itself or other portions of the severance agreement.

Unfortunately the NLRB General Counsel’s Memo raises additional questions and fails to answer many questions raised by the Board’s ruling in McLaren Macomb, including at least and without limitation the following:

  • The NLRB General Counsel’s Memo suggests her office may take a dim view of severance agreements that attempt to waive employment claims, not just claims under the NLRA. Likewise, it suggests that her office may look restrictively at releases as to claims arising after the date of the severance agreement.
  • The NLRB General Counsel’s Memo failed to provide any kind of sample language for what her office will accept as permissible confidentiality language in a severance agreement.
  • The NLRB General Counsel’s Memo states that a savings clause “may be helpful” but failed to explain further what kind of savings/disclaimer language would be helpful or to what extent it might help. For example, since the Memo states her office will seek only to strike language to the extent violative of section 7 of the NLRA, it seems unlikely that any enforcement action would be appropriate for her office if an employer, confronted by an individual asserting a section 7 issue or even filing an NLRB charge, were to review its severance agreement (or even proffered but unsigned severance agreement) then note the presence of savings language and agree that nothing in the draft would be used in violation of section 7, especially where the employer then agrees to amend or even revise language.
  • The NLRB General Counsel’s Memo said that it would review but failed to explain when or even if other clauses besides confidentiality provisions can be violative of McLaren Macomb. Such other clauses might include non-disparagement provisions, non-compete clauses, non-solicit clauses, no-poaching clauses, even broad general release clauses and covenants not to sue. For example the NLRB General Counsel’s Memo suggested, without explaining, that her office might view at least some cooperation clauses as running afoul of section 7.
    • It appears that even under this new restrictive approach confidentiality provisions that provide that the terms of the severance agreement, including the amount of severance, are permissible. It so appears because in her Memo, the NLRB General Counsel stated that NLRB OM Memo OC 07-27 remains in effect (“Yes. OM 07-27 is consistent with the McLaren Macomb decision.”), which in turn so provided (see its section 3).
  • The NLRB General Counsel’s Memo failed to explain how it will view confidentiality and related clauses when requested by the individual, especially in states with so-called Me-Too laws that provide for the enforceability of such provisions when requested by the individual.
  • The NLRB General Counsel’s Memo notes that supervisors are generally not protected by the NLRA but hypothesized that a supervisor might somehow become protected if they refused to extend a draft severance agreement that the supervisor believed was violative of McLaren Macomb.

The Board’s decision in McLaren Macomb is likely to be appealed and subjected to further litigaiton, as is the NLRB General Counsel’s Memo.

Honored to have been selected by Super Lawyers in Colorado

Honored to have been selected for by Super Lawyers in Colorado. Colorado Super Lawyers notes “Colorado Super Lawyers list (is) an honor reserved for those lawyers who exhibit excellence in practice. Only 5% of attorneys in Colorado receive this distinction.” Thank you!

NLRB enhances ability to present Scabby the Rat

In Lippert Components, Inc., the NLRB held that “Scabby the Rat” — the common nickname for a giant inflatable rat balloon often up to twelve feet tall, that is transported and displayed from the bed of a truck, which can in turn be parked curbside or in other public parking — is akin to a handbill, not picketing, and, as such, enjoys enhanced protections under the NLRA.

Denver passes ordinance recognizing municipal-level wage claim rights in addition to state and federal protections

In addition to state and federal protections, the City and County of Denver passed Ordinance 22-1614, which allows workers in Denver — whether employees or contractors or employees of staffing agencies — to file wage claims, which will investigate and can impose penalties. Additionally, the City can, under the ordinance, commence its own investigation without first receiving a complaint. Protections against retaliation are included in the Ordinance. Workers also have a private right of action whereby they can file suit in court if they opt to do so instead of relying on an administrative complaint.

Sixth Circuit holds that request for FMLA leave is protected even if the employee is not entitled to FMLA leave much less takes FMLA leave

In Milman v. Fieger & Fieger, LLC, the Sixth Circuit held that a equest for FMLA leave is protected even if the employee is not entitled to FMLA leave much less takes FMLA leave. There the plaintiff claimed she’d been retaliated against for requesting FMLA leave, and her employer responded that she had not been entitled to FMLA leave and had not actually taken FMLA leave. The Sixth Circuit rejected the company’s arguments, holding that her mere request was itself protected against retaliation.

Thus, the scope of protected activity under the FMLA starts with the first step contemplated under the Act’s procedures: a request made to the employer. That request, moreover, need not lead to entitlement in order to be protected.

Ninth Circuit holds USERRA leave must be paid if employer offers “comparable” paid leave

In Clarkson v. Alaska Airlines, Inc., the Ninth Circuit held that USERRA leave must be paid if the employer offers other “comparable” paid leave. To determine whether other paid leave is “comparable” to USERRA leave, the Ninth Circuit identified three factors: “duration, purpose, and control,” of which, it said, duration is the most important, and in gauging duration, the Ninth Circuit held that the analysis should look at the actual duration of USERRA leave sought by the plaintiff, not in general at, for example, the maximum hypothetical USERRA leave a worker might wish to take.

The Ninth Circuit remanded the case before it to determine whether the paid leave offered by the employer was “comparable,” requiring it to pay for the plaintiff’s USERRA leave. Thus, the Ninth Circuit held companies cannot take a “categorical” approach to payment for USERRA leave but must consider each individual worker’s circumstances.

Military leaves vary greatly in length, and the longest leaves can last years. Were we to adopt a categorical approach to military leaves, no other type of leave would look similar, and servicemembers would not be protected under § 4316(b)(1).

Although this was not the first case to hold that in theory USERRA leave may have to be paid if comparable paid leave is offered, it is the first appellate decision to address what “comparability” means, how to gauge it, and, more importantly, to reject a “categorical” analysis.

The opinion was issued by a 3-judge panel of the Ninth Circuit. It is unknown at this time whether the entire Ninth Circuit will rehear the case or if an appeal to the Supreme Court will be sought, much less how other courts will view this “comparability” test.

San Francisco mandates paid military leave

San Francisco has broken ground, becoming the first jurisdiction to require that certain employers pay certain employees certain amounts of paid military leave. The leave is generally capped at 30 days per year and can be waived by the workers’ union in a collective bargaining agreement.

As noted in a prior post, at least one court has held that the federal military leave law (USERRA) requires paid leave if the company offers paid leave to people on similar non-military leaves, reasoning that USERRA prohibits discrimination against military leave.

DOL issues Fact Sheet #280 reminding that FMLA is available for serious mental health conditions

The DOL issued Fact Sheet #280 reminding that FMLA is available for serious mental health conditions, that involve no physical impairment, whether involving the employee or their spouse, child, or parent.

OFCCP issues guidance to federal contractors explaining the documentation it will require to analyze pay equity compensation analyses

The OFCCP has issued a guidance to federal contractors explaining the documentation it will require to analyze pay equity during a compensation analysis.

Federal government issues guidances regarding the use of AI, software and algorithms in employment

The federal government issued multiple guidances regarding the use of AI, software and algorithms in employment including hiring, accommodation decisions and medical or other private inquiries. See for example \recent guidances by the EEOC, White House, and DOJ.

The White House summarized its goals for an AI Bill of Rights in employment, as follows:

You should not face discrimination by algorithms and systems should be used and designed in an equitable way. Algorithmic discrimination occurs when automated systems contribute to unjustified different treatment or impacts disfavoring people based on their race, color, ethnicity, sex (including pregnancy, childbirth, and related medical conditions, gender identity, intersex status, and sexual orientation), religion, age, national origin, disability, veteran status, genetic information, or any other classification protected by law. Depending on the specific circumstances, such algorithmic discrimination may violate legal protections. Designers, developers, and deployers of automated systems should take proactive and continuous measures to protect individuals and communities from algorithmic discrimination and to use and design systems in an equitable way. This protection should include proactive equity assessments as part of the system design, use of representative data and protection against proxies for demographic features, ensuring accessibility for people with disabilities in design and development, pre-deployment and ongoing disparity testing and mitigation, and clear organizational oversight. Independent evaluation and plain language reporting in the form of an algorithmic impact assessment, including disparity testing results and mitigation information, should be performed and made public whenever possible to confirm these protections.

The White House’s goal for an AI Bill of Rights includes components regarding data privacy, notices and consent.

The EEOC gives several examples of ways that “an employer’s use of algorithmic decision-making tools could violate.”

  • The employer does not provide a “reasonable accommodation” that is necessary for a job applicant or employee to be rated fairly and accurately by the algorithm.

  • The employer relies on an algorithmic decision-making tool that intentionally or unintentionally “screens out” an individual with a disability, even though that individual is able to do the job with a reasonable accommodation. “Screen out” occurs when a disability prevents a job applicant or employee from meeting—or lowers their performance on—a selection criterion, and the applicant or employee loses a job opportunity as a result. A disability could have this effect by, for example, reducing the accuracy of the assessment, creating special circumstances that have not been taken into account, or preventing the individual from participating in the assessment altogether.

  • The employer adopts an algorithmic decision-making tool for use with its job applicants or employees that violates the ADA’s restrictions on disability-related inquiries and medical examinations.

 

NLRB permits micro units

In American Steel Construction the Board reversed a Trump-era ruling regarding micro units, allowing the Board to certify elections in union organizing campaigns of sub-groups of workers so long as the sub-group is “readily identifiable as a group based on job classifications, departments, functions, work locations, skills or similar factors.”

Third Circuit adopts “about to” test for gauging protected activity under FLSA

Employers are prohibited from retaliating against employees who exercise their rights under federal wage law (FLSA). But what if the employee hasn’t yet, maybe is about to? In Uronis v. Cabot Oil & Gas Corp.the Third Circuit held FLSA prohibits retaliation “where an employer anticipates an employee will soon file a consent to join an FLSA collective action (or is “about to testify”) — (even if) no such ‘testimony’ has yet occurred or been scheduled or subpoenaed.” In so holding, the Third Circuit rejected the argument that the person must have at least taken “overt act” under FLSA.

Uronis adequately pleaded that Appellees had fair notice that he engaged in protected activity. Taking Uronis’ allegations as true, Appellees explicitly declined to hire him “because of” the (collective action lawsuit under FLSA). … Based on his allegations, it is plausible that Appellees discriminated against Uronis based on their anticipation that he would file a consent to join the collective action, or otherwise give relevant testimony. Retaliating against an employee based on such a perception violates Section 15(a)(3) (of FLSA).

Third Circuit holds that an employer’s decision to conduct an investigation can be used as evidence of pretext even if the investigation produces credible evidence of a violation warranting discharge

In Canada v. Samuel Grossi & Sons, Inc., Third Circuit held that an employer’s decision to conduct an investigation can be used as evidence of pretext even if the investigation later produces credible evidence of a violation warranting discharge. In the case, the company asserted that it had terminated an employee after a search of his phone confirmed he’d been soliciting sex workers during working hours. The employee asserted that the company had looked at his phone only in retaliation when he requested FMLA; he also asserted other claims including FMLA interference, disability-related claims and racial discrimination.

For the reasons we have already explained, we reject a rule that incentivizes employers to dig up reasons to fire an employee who has engaged in protected activity, and then immunizes them from suit based upon a subsequent fortuitous discovery of grounds for termination.

Here, as in Hobgood, there is a “ ‘convincing mosaic’ of circumstantial evidence,”63 which, when taken as a whole and viewed in a light favorable to Canada’s case, could convince a reasonable jury that he was the victim of unlawful retaliation.64 In other words, the evidence could support a finding that the search itself was retaliatory.

Supreme Court holds that Highly Compensated Employee exemption requires guaranteed salary irrespective of actual amount paid

Federal law (FLSA) contains an exemption from overtime requirements for Highly Compensated Employees. In its Fact Sheet 17H, DOL summarizes the Highly Compensated Employee exemption, as follows:

The regulations contain a special rule for “highly compensated” employees who are paid total annual compensation of $107,432 or more. A highly compensated employee is deemed exempt under Section 13(a)(1) if:

  1. The employee earns total annual compensation of $107,432 or more, which includes at least $684* per week paid on a salary or fee basis;
  2. The employee’s primary duty includes performing office or non-manual work; and
  3. The employee customarily and regularly performs at least one of the exempt duties or responsibilities of an exempt executive, administrative or professional employee.

Thus, for example, an employee may qualify as an exempt highly compensated executive if the employee customarily and regularly directs the work of two or more other employees, even though the employee does not meet all of the other requirements in the standard test for exemption as an executive.

In Helix Energy Solutions Group, Inc. v. Hewittthe Supreme Court wrestled with the first requirement: The payment of at least $684 per week, $107,432 on a salary or fee basis. The case involved a worker who was paid well in excess of that amount. He earned “over $200,000 annually.” But, he argued, he wasn’t paid that amount “on a salary or fee basis.” Rather, he was paid a daily rate for each day he worked every two weeks. He worked on an offshore oil rig and was typically active 84 hours per week. There was no argument that he was paid on a “fee basis,” instead his employer argued that he was paid the requisite amount because he was in fact paid so much more than the required minimum.

In fact the dissent noted that, although he hadn’t been guaranteed a minimum weekly amount, he was guaranteed a minimum daily amount because he was paid by a daily rate, and the dissent noted that his daily rate was $963, thus the dissent noted that if he worked any part of a week, he was guaranteed to receive at least $963, well in excess of the minimum $684 per week required by FLSA.

The majority of the Supreme Court disagreed. The Supreme Court held that the actual amounts paid were not the only issue. While this worker’s actual pay exceeded — by far — FLSA’s minimum threshold, it hadn’t been paid by way of a guaranteed minimum weekly salary. In short, he was paid by way of a daily rate, which, the majority held, is not the same a minimum guaranteed weekly salary.

Employers who hope to rely on an exemption under FLSA that requires payment of a minimum guaranteed weekly salary are cautioned that the Supreme Court’s decision may not be limited to the Highly Compensated Employee exemption. Employers hoping to rely on any exemption under FLSA should take care to consult with legal counsel about their compensation structures. Helix Energy is a cautious reminder that the amount paid alone is not sufficient to exempt a worker; the remainder of each exemption’s requirements must be met, including, where applicable, the minimum guaranteed weekly salary requirement.

 

NLRB holds that separation agreements containing broad nondisclosure, nondisparagement or confidentiality language may violate Section 7 of the NLRA

Overruling Trump-era Board precedent, the NLRB, in McLaren Macomb, held that separation agreements containing broad nondisclosure, nondisparagement or confidentiality language may violate Section 7 of the NLRA, which protects both unionized and non-unionized workers (and which the Board is increasingly viewing as protecting non-employee contractors as well). The Board will now review such language to determine if, on its face (and apparently possibly without need of an actual witness to so testify), the language might provide a chilling effect on a (again potentially purely hypothetical) individual’s ability to discuss their wages, hours or working conditions with other workers, the NLRB or even the public in general. The Board did not provide guidance on how it will review such language or what specific language it might approve, but it seems it will be a narrower view than Republic-appointed Boards might utilize.

The main disagreement between the current Biden-era Board and the prior Trump-era Board appears to be — in addition to the strictness of their language review — their inability to agree on whether a separation agreement (also known as a severance agreement) is by its nature something that relates to wages, hours or working conditions of employment. The Trump-era Board (and the dissenter in this McLaren Macomb decision) viewed severance as, by its nature, being inherently not related to the wages, hours or working conditions of employment.

The issue is likely to proceed to litigation in the courts. However, McLaren Macomb sets forth at least the general approach that the current NLRB will take when reviewing separation agreements.

NLRB permits consequential damages as possible remedies

In follow-up to the prior post regarding NLRB General Counsel Memorandum 21-06, the Board has authorized the award of at least some no previously recognized remedies under the NLRA. The case was Thryv Inc. The Board did not specify particular aspects of relief, saving that for lower decisionmakers in particular cases. Without calling them “consequential damages,” which is a commonly used legal term, the Board held in this 3-2 decision that these new remedies would be available if the monetary losses were the “direct and foreseeable result of a respondent’s unfair labor practice.” The majority did take pains to note that these new remedies would not include “pain and suffering” or other emotional distress.  As with the NLRB General Counsel Memorandum, the Board’s ruling is likely to draw litigation on review.

DOL issues Field Assistance Bulletin reminding employers that federal wage-hour requirements still apply even when employees are working remotely

In its Field Assistance Bulletin 2023-1 , the DOL reminds employers that federal wage-hour requirements still apply even when employees are working remotely. Thus for example, employers still must comply with the requirements to provide and document meal periods and rest breaks, as well as lactation breaks, and although employers may suspect that a remote worker is taking unauthorized breaks, the company may not simply assume time should be unpaid. The DOL also discusses an employer’s ability to either schedule work hours (assign remote workers a particular shift of hours to be worked) or assign a certain number of hours to be worked each day. The DOL discusses how employers can instruct employees in a variety of telework scenarios to clock in/clock out at the beginning, the end and throughout the day.

The DOL reminds employers though that, when they know or have reason to believe the employee is working outside recorded hours, the time must be recorded and paid as hours worked, even if the employee is themself choosing to work “off the clock” as it were from home. The DOL cites to its Field Assistance Bulleting 2020-5, which discussed how employers can instruct workers to record all hours worked, including such time, even where not requested, scheduled or authorized by the company.

Employers are reminded that in addition to the federal requirements discussed in the DOL’s Field Assistance Bulletin, additional state and local requirements might apply, including in Colorado for example the CDLE‘s COMPS order and related requirements.

Ninth Circuit strikes down California’s AB 51

In Chamber of Commerce of the United States of America v. Bonta, the Ninth Circuit struck down the California law known as “AB 51,” which, without explicitly invalidating mandatory pre-dispute employment arbitration agreements, would have made it a crime for employers to enter into such an agreement with its workers. The Court held that AB 51 is preempted by the Federal Arbitration Act, which the Supreme Court has held robustly permits arbitration agreements.

NLRB General Counsel pushes for enhanced remedies under NLRA

In NLRB General Counsel Memorandum 21-06, the NLRB General Counsel has ordered Board offices to seek remedies never before recognized as available under the NLRA, including the following, each subject to circumstances described in the Memo:

  • Enhanced consequential damages
  • Including even front pay
  • And reimbursement of union organizing costs
  • Mandating hires
  • Lost wages to individuals not authorized to work in the United States.

Attempts to seek those not previously recognized remedies are sure to be subject to litigation, including over the constitutionality of the General Counsel’s office ability to expand the NLRA without congressional legislation or even regulatory rulemaking.

Congress enhances laws protecting pregnant and nursing mothers at work

President Biden has signed into law the Consolidated Appropriations Act, which includes two enhancements to the protections applicable to pregnant and nursing mothers at work:

  • The Pregnant Workers Fairness Act (CAA Sec. 101-109) applies to employers of 15 or more, subject to some exceptions, and requires reasonable accommodations of pregnancy, even though a short-term condition that would not otherwise generally qualify under the ADA as a “disability,” and a two-way interactive process for considerations of such requests. It also protects such employees from retaliation and discrimination. This new law also prohibits employers from mandating that a pregnant worker absent a reasonable accommodation that has not been developed through the interactive process or mandating that the pregnant worker take leave as a reasonable accommodation over their objection.
  • The Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act, CAA Div. KK, Sec. 102) requires workers be allowed reasonable breaks to express , for up to one year after the birth of a child, in a private space, not a bathroom.

The EEOC has issued information explaining the new Pregnant Workers Fairness Act here, and the DOL re the PUMP Act here.

NLRB permits wearing of union insignia absent special circumstances

In Tesla, Inc., the NLRB reversed a Trump-era decision re union insignia, returning to prior caselaw holding that employers must allow employees to wear union insignia despite dress codes and uniform policies, unless “special circumstances” require otherwise. Whether special circumstances exists will depend on whether, in each case’s circumstances, the union insignia “may jeopardize employee safety, damage machinery or products, exacerbate employee dissension, unreasonably interfere with a public image that the employee has established, or when necessary to maintain decorum and discipline among employees.”

Congress enacts limitations on non-disclosure and non-disparagement agreements regarding sexual harassment and sexual assault

President Biden signed into effect the Speak Out Act, which prohibits judicial enforcement at least in federal and tribal courts of non-disclosure or non-disparagement clauses when sought to be enforced relative to a matter involving sexual assault or sexual harassment, so long as the clause is in an agreement entered into on or after 12/7/2022. The Act’s prohibition includes a prohibition against enforcement of such provisions relative to the existence or terms of a settlement involving sexual assault or sexual harassment, as well against judicial actions, at least in federal and tribal courts, involving negative statements about another party related to such an agreement, sexual harassment or sexual assault.

The Act’s applicability in state courts is not clear from its language and likely to draw litigation.

NLRB enhances employee property access rights for labor protest activities

Reversing its Trump-era approach, the NLRB held in Bexar County Performing Arts Center Foundation that property owners can only exclude the employees of contractors who work on-site, during labor protests, when their protest activities “significantly interfere” with the use of the property or when justified by “another legitimate business reason.” The case involved the owner of a performance venue, a symphony and its musicians who were attempting to organize, but the Board’s holding is not limited to performing arts venues. It could also apply to a building owner, a construction company and its workers, and would govern the building owner’s ability to exclude the construction workers who might be engaged in labor protest activities.

Colorado Court of Appeals certifies class in wage lawsuit for rest breaks but not meal periods

Colorado wage law affords employees (1) a 30-minute meal period, subject to a number of requirements and conditions, which, if circumstances on a given day make it impractical to take, requires that the employee be paid for the time spent working instead and further that the employee be allowed an on-the-clock opportunity to consume a meal and (2) a 10-minute rest break for every 4 hours of work, again subject to a number of requirements and conditions. In Hicks v. Colorado Hamburger Co., the Colorado Court of Appeals was confronted with a case in which the timecards for workers in multiple locations allegedly did not show workers’ meal periods or rest breaks. A single worker at one location filed suit alleging he had not been granted them as required by Colorado law and further, he alleged, his co-workers at his and the other locations had similarly not been granted them. He sought a right to pursue his claims not only on his own individual behalf but on behalf of a class consisting of his co-workers at all locations.

The Colorado Court of Appeals ruled that his claim for rest break violations could be pursued as a class action, but the court refused to certify a class on his meal periods. The Court held that the timcards’ silence on the meal periods did not evidence whether there had been a meal period violation because, the Court noted, the employees may have been allowed to consume the on-the-break meal as permitted by and in accordance with the requirements of Colorado law; therefore, the Court held that class certificaiton would be inappropriate since every workers’ right to a meal period on any given day would be subject to individual analysis over just what exactly happened to them that day. However, the Court found the timecards’ silence as to rest breaks indicative of a possible claim because it held that the timecards’ silence did indicate, at least in the Court’s view of the circumstances of this case, that all workers may have been denied the required rest breaks.

The Court’s decision should not be read as a simple rule that all Colorado state law claims for rest breaks may be brought as class actions and that no Colorado state law meal period claims may be brought as class actions. The Court’s ruling may be limited to the facts before it, which the Court discussed in detail explaining its reasoning why the timecards’ silence, at least on the record before it in this case, warranted the different outcomes.  It is also noted that the Court’s ruling did not address whether it was or wasn’t likely that any violation actually occurred; the case was simply over whether either claim could be pursued on behalf of a class. The Court’s ruling does not reflect any likely outcome on the merits.

Colorado employers, reminder: PAY CALC order and COMPS 38

Colorado employers are reminded about the posting and distribution requirements related to the CDLE’s PAY CALC order and COMPS order 38.

Posting: The CDLE requires, in its Rule 7.4.1 of 7 CCR 1103-1, that employers post the latest COMPS Order poster (currently 38) as well as the PAY CALC Order for that year in a part of the workplace where employees can “easily” read it during the workday. If not practical, it needs to be distributed to new hires within the first month of employment and made available upon request.

Distribution: The CDLE requires, in its Rule 7.4.2 of 7 CCR 1103-1, that the most current COMPS Order poster (currently 38) also be distributed to employees “with any” handbook, manual or other policies, if and when an employer publishes or distributes any handbook, manual or policies. Additionally, if the employer requires that any such handbook, manual or policy be signed, then the employer must also require signatures on an acknowledgement for the COMPS Order.

The CDLE offers its posters in various languages on its website and requires the COMPS Order poster to be posted in whatever language the employer’s workers speak. The CDLE also will translate the poster into a language for the employer if not already available on its website.  

CDLE publishes basket of materials to help employers meet January 1 deadline for FAMLI program

The CDLE has published a basket of materials to help employers meet January 1 deadline for the new FAMLI program. FAMLI will be the new paid leave government program. It was established by voters in Colorado who in 2020 approved Proposition 118. The new program will provide benefits (not too unlike how current workers compensation and unemployment government programs are administered) for family needs such as birth, adoption, etc., as well as in times of serious health conditions. The program will require employers to deduct from worker wages and pay premiums starting January 1, 2023. Benefits won’t be provided until January 1, 2024. To be able to start paying premiums, employers will need to register

An initial deadline therefore is for employers, no later than January 1, 2023, to post a workplace poster explaining the deductions that employees will start seeing in their paychecks. The CDLE has also provided a paycheck stuffer that can be provided to employees with their paychecks, as well as a sample paystub showing how employers can reflect the new deduction. An additional summary suitable for use in break rooms is available as well from the CDLE. 

While the CDLE has not yet fleshed out the full notice requirements that employers will face, the governing statute at CRS 8-13.3-511, provides that the poster must be (1) posted and distributed as the company does its posters (employers who have distributed posters and notices by email, including to remote workers during the pandemic, should consider doing so again with the poster in addition to posting it), (2) provided to all new hires and (3) provided to individuals if the employer learns they may have need of FAMLI leave. 

CDLE requires Colorado employers to post a notice explaining forthcoming deductions and delayed availability of benefits under Colorado’s under-development FAMLI program

The CDLE requires Colorado employers to post a notice explaining forthcoming deductions and delayed availability of benefits under Colorado’s under-development FAMLI program no later than January 1, 2023.

Honored to have L2S Legal selected in for inclusion in the 2023 edition of U.S. News – Best Lawyers “Best Law Firms”!

Honored to have L2S Legal selected for inclusion in the 2023 edition of U.S. News – Best Lawyers “Best Law Firms” as Tier 1, Metropolitan, Colorado, Employment Law – Management!

CDLE issues form Colorado employers may use as a separation notice

As previously posted on this blog, Colorado passed a new statutory requirement to inform employees of various information, including unemployment rights, at separation. Unfortunately, that new law gave no guidance on what such a notice might actually look like and only vaguely suggested content bullet points. Now, the CDLE has issued a draft form that Colorado employers may use.

Should you notify your insurance carrier or not?

The New York Times ran an interesting article about a potentially devastating mistake by, of all places, Harvard: Failing to notify one of its insurance companies may cost the university $15-million. To be sure it depends on your insurance policy, what your deadline will be. Different policies set different deadlines. Some set a certain number of days following an “occurrence,” some after a “demand.” Some don’t specify days but use language like “within a reasonable time” or “promptly.” In the employment context, one could see a policy, just as an example, that sets a 30-day deadline from when a “claim” is “made.” The policy may then define those terms, and, as just one example, it may be that the policy language states that a simple “written demand” suffices to trigger the 30-day notice deadline. Whatever the policy language, insurance policies often do not allow insureds to, then, just “wait and see” if a matter turns into something serious; insurance companies often argue that they insert these deadlines because, they contend, part of their bargain is that they (the insurance company) want to be involved early in the process, so that they can help, they believe, to contain costs. On the other hand, insureds are also correct in many cases to argue that extenuating circumstances apply and that such deadlines should not operate as “get out free cards” for insurers. In short, insureds (whether companies or individuals, in an employment context or in any context) should familiarize themselves with the policy language that they’ve paid for, then be sure to strive for compliance, in order to avoid just this kind of lawsuit.

According to the New York Times, Harvard now finds itself in a lawsuit with its own insurer over whether it missed its deadline.

But Harvard did not alert Zurich, its excess insurer, which was meant to cover the next $15 million, until long after the policy’s deadline had passed.

***

“Somebody seriously messed up,” said Tom Baker, a law professor at the University of Pennsylvania. “I teach about this stuff. One of the things you teach people about claims-made policies is that you’ve got to provide notice early and often.”

Whether Harvard will lose $15-million in insurance coverage is for the courts to decide, but the issue itself provides a good object lesson for insureds. Interested readers will find links in the New York Times article to briefing by both Harvard and its insurance company.

EEOC releases new poster, no deadline yet set

The EEOC has released a new version of its prior “EEO is the Law” poster, now called a “Know Your Rights” poster. The new poster is available here. The EEOC encourages employers to substitute it for the current poster as soon as possible. The EEOC has not yet set a deadline for when it must be substituted. For additional information about the changes in the new poster, the EEOC summarized its intended changes in its press release regarding the new poster.

DOL issues proposed joint contractor rule

The DOL has issued yet another proposed rule regarding independent contractors. Under recent Presidents the DOL has ping-ponged back and forth issuing stricter or looser rules purporting to define the test for determining if individuals are working as employees or independent contractors (for the purposes of a number of laws under the DOL’s jurisdiction). In May 2021, the DOL under the Biden Administration withdrew its prior Trump-era rule and is now proposing to replace it with a stricter test that will involve a multi-factor test, which begins with the Trump-era DOL rule’s 5 factors:

  1. The “opportunity for profit or loss depending on managerial skill” of the worker;
  2. The extent of “investments” by the worker versus the company;
  3. The relative “permanence” of the relationship between the worker and the company;
  4. The extent to which the work is an “integral part of the” company’s business; and,
  5. The degree of “skill and initiative” involved for the worker.

The DOL has called its new proposed test, the “Economic Realities” test. It is designed to be stricter than prior tests, in order to catch what DOL believes is a large number of currently misclassified workers, but the DOL advises it does not have numbers to suggest how many such relationships it would invalidate. The DOL requests comments prior to November 28, 2022.

CDLE proposes four sets of new rules

On September 29, 2022, the CDLE issued four sets of proposed Rules and accompanying explanatory Statements.

  1. Proposed revisions to 7 CCR 1103-14, which are the rules implementing the CDLE’s PAY CALC Order, which sets the minimum wage rates in Colorado. The new rules would increase
    • the minimum hourly rate to $13.65 from $12.56,
    • the minimum hourly rate with tip credit to $10.63 from $9.54,
    • the minimum guaranteed weekly salary for executive, administrative and professional exempt employees to $961.54 from $865.38, and
    • the minimum guaranteed annual salary for highly compensated exempt employees to $112,500 from $102,250.
  2. Proposed revisions to 7 CCR 1103-11 to implement this year’s new law SB 22-097, which expanded whistleblower protections to prohibit retaliation for the expression of any “reasonable concerns about workplace violations of governmental health or safety rules, or otherwise significant workplace health or safety threats,” without a requirement any longer to prove the concerns were “related to a public health emergency.”
  3. Proposed revisions to 7 CCR 1103-7, which implements increases including under this year’s new law SB 22-161 to penalties, attorney fees, claim and appeal processes, under the laws overseen by the CDLE in the Colorado Wage Act (CWA).
  4. Proposed revisions to 7 CCR 1103-6, which vest authority in the CDLE to issue, and oversee enforcement of, prevailing wage determinations on certain public projects under the Colorado Prevailing Wage Act (PWA) and the Keep Jobs in Colorado Act (KJICA).

The CDLE invites comments and has schedule rulemaking deadlines, including public hearings, on its website.

NLRB reimposes requirement to keep dues checkoff clause in effect following expiration of CBA

The Biden Board has reversed a ruling by President Trump’s NLRB, returning to the Obama-era ruling, which had in turn reversed longstanding precedent regarding whether dues need to continue to be paid to a union even after the CBA requiring dues payment (a “dues checkoff” clause) had expired. Historically, the ruling had been, since at least the NLRB’s 1962 ruling in Bethlehem Steel that dues checkoff clauses expired with the CBA and, therefore, a company could stop withholding and paying them to a union. President Obama’s majority-appointed NLRB reversed that; then President Trump’s reversed it back, and now the current Board has returned to the Obama-era ruling, holding that dues must continue to be paid, with the Democrat-appointee Board members saying: “Payments via a dues-checkoff arrangement are similar to these other voluntary checkoff arrangements, and dues-checkoff arrangements should survive contract expiration just as other voluntary checkoff arrangements do.” The current decision is Valley Hospital Medical Center.

Tenth Circuit rejects Cat’s Paw argument holding that review of termination decision by an independent decisionmaker breaks causal link on retaliation claim

In Parker v. United AirLines, Inc., the Tenth Circuit rejected the plaintiff’s Cat’s Paw argument holding that the review of her termination by an independent decisionmaker broke any causal link on her claim of retaliation.

Retaliation entails a causal link between an employee’s use of FMLA leave and the firing. That causal link is broken when an independent decisionmaker conducts her own investigation and decides to fire the employee.

The plaintiff, who had been on FMLA, argued that her use of FMLA leave “sparked retaliation from her supervisor” who, when the opportunity allegedly presented itself, recommended her discharge and continued to do so even when she appealed her decision to a higher level of management. She argued that her supervisor’s alleged contributions to the process constituted proof in her favor under the so-called Cat’s Paw theory. “That theory imputes a supervisor’s motive to an employer if the motive influenced the employer’s decision.” The Tenth Circuit rejected that argument.

(The Cat’s Paw theory) doesn’t apply when independent decisionmakers “conduct their own investigations without relying on biased subordinates.”

GSA permits union access on Executive Branch’s federal property

The GSA issued a final rule that permits unions to enter onto the properties owned or leased by the federal Executive Branch, in order to contact non-union and already unionized workers employed by the federal government or even its contractors. The rule is intended to assist unions in organizing campaigns and in administering existing CBA’s. The rule does not apply to private property owned by such contractors, nor to state or city-owned properties, nor to federally owned/leased properties of the Judicial or Legislative branches.

Tenth Circuit reinstates some claims by a worker but affirms dismissal of others

In a case involving rather significant allegations of misconduct, the Tenth Circuit parsed through the evidence to hold, on summary judgment, that some of the worker’s claims were properly dismissed but other should have been allowed to proceed.

On her claim of discrimination, her case included a claim that an officer of the company said he felt she was “building a case” against the company and was “more trouble than she’s worth,” that he called her and another African-American female employee “Black b*s from Atlanta” and “resident street walkers.” However, the Tenth Circuit rejected the claim because it found no evidence that the officer was a decisionmaker or that he had any input in the adverse employment decision affecting her.

On her claim of retaliation, though, the Court noted that the same officer had allegedly laughed and said, “Let her try,” when the possibility of her re-applying for promotion in the future was discussed.

The court analyzed a number of other claims and multiple other allegations of specific evidence, including an incident involving rather graphic allegations of sexual harassment at a party attended by plaintiff and her co-workers, which the Court held was not sufficient to support a claim because the party occurred well before the time period for filing a charge of discrimination (300 days). But, the Court noted she claimed that she’d been asked multiple questions at work about her breasts, been subjected to “sexual banter,” on a near “daily basis,” much of which was corroborated by other female workers. The Court held this was sufficient to support claims of hostile work environment and constructive discharge.

The case is Ford v. Jackson National Life Ins. Co.

Honored to be selected for inclusion in Best Lawyers in America

Honored to be selected again for inclusion in The Best Lawyers in America for Employment Law – Management.

Fourth Circuit holds that gender dysphoria can sometimes constitute a disability protected by the ADA

In Williams v. Kincaid, the Fourth Circuit held that, while being transgendered itself is not a disability protected by the ADA (Americans with Disabilities Act), gender dysphoria can sometimes be. The Fourth Circuit summarized gender dysphoria as a “discomfort or distress that is caused by a discrepancy between a person’s gender identity and that person’s sex assigned at birth.” The court noted, “People suffering from gender dysphoria often benefit from medical treatment, including hormone therapy,” and observed that “gender dysphoria” is “a disability suffered by many (but certainly not all) transgender people” (parenthetical in original).

Accordingly the Fourth Circuit cautioned that not all transgendered people suffer a “disability” protected by the ADA, and neither do all transgendered individuals who suffer from gender dysphoria. Rather, the ADA protects only those individuals whose gender dysphoria is so severe as to render them “disabled” within the meaning of the ADA. The court found significant that this plaintiff had required daily hormone treatment for 15 years due to gender dysphoria. Based on the plaintiff’s allegations to that effect, the court held this plaintiff should be entitled to try to prove that her gender dysphoria constituted a “disability” as defined by the ADA, in other words, a physical impairment that substantially limits one or more of her major life activities . (Note: The ADA also protects mental impairments that are so limiting, but this case involved allegations that the plaintiff’s gender dysphoria was a physical impairment; there was no issue raised regarding mental impairment.)

The dissent noted that the ADA, when passed, expressly excluded from protected disabilities “gender identity disorders,” but the majority held that whatever the phrase “gender identity disorders” meant “at the time of (the ADA’s) enactment,” it did not include gender dysphoria and, even if it did, the case was at too premature a stage to determine that this particular plaintiff’s gender dysphoria was a “gender identity disorder.”

Seventh Circuit Affirms Employer’s Right To Provide Workers Comp Light Duty But Refuse To Provide Light Duty To Pregnant Workers

In EEOC v. Wal-Mart Stores East, L.P., the Seventh Circuit held that an employer need not offer light duty to pregnant workers, even though it offers the same to employees who are on workers compensation, so long as the company does not also offer light duty to those who are ill or injured off-the-job. In so doing, the Seventh Circuit looked to the Supreme Court’s 2015 decision in Young v. UPS, that held, without further explanation, that pregnant workers must be offered light duty if it is offered to other employees with similar restrictions. The Seventh Circuit distinguished a 2016 Second Circuit case, Legg v. Ulster County, that had required light duty for pregnant workers even though it was otherwise reserved for workers comp cases, because, there, the Seventh Circuit held the employer had offered “confused and inconsistent rationales” for its decision to reserve light duty for workers comp cases. The Seventh Circuit didn’t explain why that employer’s rationales were “confused and inconsistent,” whereas, this employer’s were clear and persuasive, except to note that this employer explained that reserving light duty for workers compensation cases helped it to reduce “costs” and “legal exposure,” given the state of Wisconsin’s statutory schemes governing workers compensation claims and the incentives provided therein for light duty.

Fun morning on 850 KOA talking about employee personal social media posts and political activism in the workplace

Thanks to Marty Lenz for a great conversation about employee personal social media posts and political activism in the workplace.

Supreme Court narrows federal courts ability to find jurisdiction to enforce arbitration awards under the Federal Arbitration Act

The Federal Arbitration Act is a nationwide law that authorizes arbitration of a number of types of claims, including many employment claims, such as discrimination and retaliation lawsuits. In recent years, the Supreme Court has taken an increasingly strong view of enforcing arbitration agreements, including in the employment context. But does a federal or a state court enforce the resulting arbitration award? In other words, say, the parties to a dispute agree that they are bound by an arbitration agreement, and they take the matter to arbitration, where one party loses, then that party tries to file a fresh lawsuit in court, where does the winner go to say, “Hey, I just litigated this in arbitration, I won, I shouldn’t have to litigate it all over again, please, court, enforce the award I just received from the arbitrator”?

Section 9 of the FAA authorizes federal courts to enforce an arbitration award, but it does not give the federal court substantive jurisdiction, meaning, the federal court has the power to enforce the arbitration award but it, first, must have jurisdiction over the parties before it can exercise that power. Federal court jurisdiction is a bit unusual. Unlike state court jurisdiction, which exists pretty broadly in all 50 states, federal court jurisdiction is limited to what is called (1) “diversity” jurisdiction, when the parties are from different states and at least $75,000 is at-issue, and (2) “federal question” jurisdiction, when, wherever the parties are from and whatever amount is at-issue, there is at least one federal law at-issue.

The FAA as a statute clearly did not create its own substantive federal law that would give rise to a “federal question” in every enforcement action. In other words, Congress did not intend that the winner in arbitration under the FAA would always be able to go to a federal court to enforce its award, Congress left at least some such enforcement actions to state courts.

But what if the underlying claim is itself a federal law claim, does that underlying federal law bootstrap the case up into a matter of federal-question jurisdiction? That was the issue in a recent Supreme Court case decided today. In Badgerow v. Waters, the employee worked for a securities company, and as such was to mandatory arbitration under the FAA pursuant to Financial Industry Regulatory Authority requirements. When she asserted claims arising out of her employment, the claims were accordingly submitted to arbitration, which she lost. Refusing to accept the arbitration award, she believed “that fraud had tainted the arbitration proceeding” (quoting the Supreme Court), she sued the company in state court. The company went to federal court and asked it to enforce the arbitration award by blocking the state court lawsuit. In support of its assertion that the federal court had jurisdiction, the company argued the federal court could “look through” the paperwork to see that the underlying employment claims asserted by Badgerow included federal law claim issues, thus raising a federal question.

The Supreme Court held that the federal court could not “look through” the paperwork to find federal question jurisdiction. The Supreme Court noted that the company could still establish diversity jurisdiction.

Interestingly for practitioners, the Supreme Court reaffirmed its prior ruling that “look through” is permitted when a party is seeking to enforce the arbitration agreement. In other words, had Badgerow refused to arbitrate her claims, the company could have sued in federal court, and a federal court could have “looked through” the paperwork at her underlying claims to determine that she was asserting a federal question. That would have given that hypothetical federal court jurisdiction to enforce the arbitration agreement by ordering her to go to arbitration. However, the Supreme Court held the language in the FAA that permitted “look throughs” in cases seeking enforcement of arbitration agreements is not present for cases involving enforcement-vacation of arbitration awards.

The Supreme Court’s ruling was near unanimous, with just one dissent. The majority anticipated this limitation will not likely blunt the enforcement of arbitration agreements or arbitration awards. Indeed, it is arguably a relatively obscure procedural twist in the sense that lawsuits to enforce arbitration awards are relatively rare, and even rarer are those asserting fraud as grounds to vacate an arbitration award.  The decision does not suggest that the Supreme Court is backing away from enforcing arbitration agreements under the FAA.

President Biden signs new law allowing employees to opt out of mandatory pre-dispute arbitration agreements in cases of sexual harassment and sexual assault

President Biden signed H.R.4445 (the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act”), which allows employees to opt out — on their own behalf or as a class representative — of mandatory pre-dispute arbitration agreements in any “sexual harassment dispute or sexual assault dispute.” Both types of dispute are defined broadly to encompass any such kind of violation of federal, tribal or state law. The Act does not allow individuals opt-out rights for other types of claims such as racial discrimination.

How this Act will apply when a person asserts both a sexual harassment claim and some other kind of claim, say, a race discrimination claim is not clear. The Act says in one place that a “case” involving a “sexual harassment dispute or sexual assault dispute” can be litigated (is not arbitrable), suggesting that the entire “case” might enjoy opt-out rights, but that very same sentence then says that is so only if the other claims “relate to” the sexual harassment/assault claims. The courts will need to decide in future litigation what all of that means and how it will apply to particular cases.

The Act does not appear to explicitly require employers to take action, such as revising their existing arbitration agreements or giving notice of this new right to employees.

The Act is effective only as to disputes and claims that arise and accrue on or after March 3, 2022.

Supreme Court reverses Roe v. Wade, implications for employers will be widespread but are as-yet unclear

In a 6-3 opinion in Dobbs v. Jackson Women’s Health Org., the Supreme Court overturned Roe v. Wade. The implications for employers, even private employers, will likely be widespread but are as-yet unclear.

Supreme Court holds public school coach’s midfield post-game prayer, with students, is protected by First Amendment

A 6-3 majority of the Supreme Court held in Kennedy v. Bremerton School Dist. that a public school coach’s midfield post-game prayer, with students, is protected by the First Amendment.

Respect for religious expressions is indispensable to life in a free and diverse Republic—whether those expressions take place in a sanctuary or on a field, and whether they manifest through the spoken word or a bowed head. Here, a government entity sought to punish an individual for engaging in a brief, quiet, personal religious observance doubly protected by the Free Exercise and Free Speech Clauses of the First Amendment. And the only meaningful justification the government offered for its reprisal rested on a mistaken view that it had a duty to ferret out and suppress religious observances even as it allows comparable secular speech.

The dissent noted that the prayer was anything but post-game, as it occurred during the entire overall game-night event, which the coach began with a locker-room prayer, and while student-athletes weren’t ordered to participate they were, the evidence established, effectively coerced, allowing the coach to evangelize his public school government employee job.  Indeed, the dissent pointed out, evidence showed that others viewed the coach’s behavior as a sign that the public school itself was endorsing his prayers, itself a violation of the First Amendment’s church-state separations.

Readers are reminded that the First Amendment does not apply as against private employers.

Tenth Circuit expands possible successor liability for a purchaser especially if their purchase agreement contains a due-diligence clause

Generally, the purchase of a business can be done in two ways: (1) a so-called “equity deal” where the stock in a corporation (or other ownership interest if the business is not a corporation) is acquired or (2) an “asset deal” in which only the assets of a business are acquired. In an equity deal, the business itself never changes, just its owners, so the business remains liable usually for whatever its liabilities were prior to the transaction; in other words, the acquisition doesn’t affect the business, or its liabilities, just its ownership. Partially for that reason, asset deals are often pursued instead. In an asset deal, the goal is to acquire only the assets of the business, so the buyer can start its own new business fresh. Recognizing that might not be fair to creditors (including victims of wrongdoing by the business) if for example the “new” business is anything but fresh and is instead a simple continuation of the old business even in name, the courts have long imposed a test for successor liability.

In a recent decision titled EEOC v. Roark-Whitten Hopitality 2, LP, the Tenth Circuit summarized that test, as follows:

The longstanding common law rule outside of the Title VII context has been that “where one corporation sells or otherwise transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the transferor.” W. Tex. Ref. & Dev. Co. v. Comm’r of Internal Revenue, 68 F.2d 77, 81 (10th Cir. 1933) (citing federal and state cases). There are “four well recognized exceptions” to this general common law rule. Id. Those include: “(1) [w]here the purchaser expressly or impliedly agrees to assume such debts; (2) where the transaction amounts to a consolidation or merger of the corporations; (3) where the purchasing corporation is merely a continuation of the selling corporations; and (4) where the transaction is entered into fraudulently in order to escape liability for such debts.”

When considering whether to impose successor liability, the Tenth Circuit has adopted nine factors, none of which alone should generally be controlling but all of which should be weighed in context of a particular case’s circumstances:

1) whether the successor company had notice of the charge,

2) the ability of the predecessor to provide relief,

3) whether there has been a substantial continuity of business operations,

4) whether the new employer uses the same plant,

5) whether he uses the same or substantially the same work force,

6) whether he uses the same or substantially the same supervisory personnel,

7) whether the same jobs exist under substantially the same working conditions,

8) whether he uses the same machinery, equipment and methods of production and

9) whether he produces the same product.

As one sees, the first factor is whether the successor had “notice.” The Tenth Circuit has cautioned this factor is not controlling, alone, either way, and, further, that in deciding whether “notice” existed, courts should not limit the evidence to cases of actual notice.

In Roark-Whitten, according to the Court’s decision, the sales agreement at-issue contained “a due diligence provision that afforded SGI thirty days in which to investigate, in pertinent part, the liabilities of the business.” The plaintiff claimed that, if the purchaser had properly exercised due diligence, it would have learned of the employment law liability exposures at-issue.

Despite a strong dissent to the contrary, a 2-judge majority in this panel decision ruled that the plaintiff had adequately pled sufficient facts against at least one of the purchasers at-issue. The case contained allegations of especially unusual and vivid employment law violations, as well as relatively unusual allegations of fact regarding the diligence process itself, and a rather unique and complicated set of facts involving the transactions that were at-issue. Given the dissent, it is arguable that this 2-judge panel holding is likely to be viewed as limited to the constellation of alleged facts at-issue, especially since the case was decided on a motion to dismiss, meaning the issue was only whether the claims were sufficiently pled to start the lawsuit. In other words, the Tenth Circuit did not hold that as an evidentiary matter, issues of fact were raised, must less did its ruling suggest liability might exist.

Colorado Supreme Court upholds state paid leave program

In 2020 Colorado voter passed Proposition 118, which calls for the creation of a state agency that will (not unlike current workers compensation and unemployment agencies) provide paid family leave commencing January 1, 2023. In Chronos Builders, Inc. v. CDLE, a unanimous Colorado Supreme Court upheld Proposition 118, holding that the premium the new agency will charge to fund such benefits is not a tax in violation “of section (8)(a) of the Taxpayer’s Bill of Rights (‘TABOR’), which provides, as relevant here, that ‘[a]ny income tax law change . . . shall also require all taxable net income to be taxed at one rate, . . . with no added tax or surcharge.’ Colo. Const. art. X, § 20(8)(a).”

We conclude that the premium collected by the Division does not implicate section (8)(a) because the relevant provision of that section concerns changes to “income tax law.” The Act, a family and medical leave law, is not an income tax law or a change to such a law. Moreover, the premium collected pursuant to the Act is a fee used to fund specific services, rather than a tax or comparable surcharge collected to defray general government expenses. We therefore hold that the Act does not violate section (8)(a).

Supreme Court holds that mandatory pre-dispute arbitration agreements mandate arbitration and can block class-collective actions despite California law to contrary

Since at least 2019, it has been clear under Supreme Court precedent that mandatory pre-dispute arbitration agreements entered into with employees are binding and enforceable, even if it means the employee cannot bring a class- or collective-action as part of her claims. California attempted to work around that caselaw with an innovative state law (“PAGA” ) unlike any other in any state, which purported to say the state itself had the right to bring class- and collective-actions and that an individual can bring the state’s claim as, what PAGA calls, a Private Attorney General. PAGA then added that individuals could not waive that right (in for example an arbitration agreement). In Viking River Cruises, Inc. v. Moriana, the Supreme Court ruled that, no, such an individual, if she has signed an arbitration agreement, even a mandatory pre-dispute arbitration agreement, must submit her own claims to arbitration and, once she has done so, has no mechanism under PAGA for attempting to bring a class-collective action in court.

In so ruling, the Supreme Court held that federal law preempts Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014).

The Supreme Court’s opinion’s wording has led at least some commentators to speculate that the California legislature may attempt to re-draft PAGA in response to the Supreme Court’s Viking River Cruises decision.

Colorado passes new unemployment statute mandating documentation be provided to terminated employee

A new Colorado unemployment law has added a disclosure obligation for companies, to be codified at CRS 8-74-101(4). This information must be provided to employees at the time of separation, in writing, and may be provided electronically or by hard copy.

The information must include:

(a) the employer’s name and address;

(b) the employee’s name and address;

(c) the employee’s identification number or the last four numbers of the employee’s social security number;

(d) the employee’s start date, date of last day worked, year-to-date earnings, and wages for the last week the employee worked; and

(e) the reason the employee separated from the employer

This appears to be in addition to the information that the CDLE already requires in its unemployment regulations as rule 7.3.2.2:

7.3.2.2 Notice Provided to Employee Upon Separation. The employer must also provide such notice to every worker upon separation from employment. This notice must include:

.1 A statement that unemployment insurance benefits are available to unemployed workers who meet the eligibility requirements of Colorado law;

.2 Contact information to file a claim;

.3 Information the worker will need to file a claim;

.4 Contact information to inquire about the status of their claim after it is filed

 

Supreme Court holds baggage handler is “engaged in foreign or interstate commerce” and therefore need not arbitrate wage claims and may instead pursue a class-collective action in court

The interplay between federal and state wage-hour laws versus the Federal Arbitration Act is a bit tricky. To be sure there are complicated nuances and conflicting state and local laws, but to simplify: Federal and state wage-hour laws permit employees generally to pursue a class-collective action in court; however, if they have entered in an arbitration agreement — even a mandatory pre-dispute arbitration agreement — the Federal Arbitration Act requires them to pursue their wage-hour claim instead only in arbitration, where they may pursue only their own individual claims (not a class-collective action). In turn, the FAA contains its own carveout for employees who are “engaged in foreign or interstate commerce.” If employees fall into that carveout, they drop back to the general rule and need not arbitrate wage claims and may instead pursue a class-collective action in court.

In this case, the Supreme Court had to decide where baggage handlers fall in that statutory scheme. The Circuit Courts were split. In a unanimous decision, Southwest Airlines Co. v. Saxon, the Supreme Court cautioned that some employees, like perhaps janitorial staff, may not fall into the interstate commerce exception, but baggage handlers do. Therefore, the plaintiff baggage handler was not required by the FAA to submit her wage-hour claims to individual arbitration; rather, she is, the Supreme Court held, entitled to pursue them in court and, there, may attempt to assert a class-collective action.

CDLE publishes INFO 16 explaining an employer’s right and obligation to deduct and take certain credits

The CDLE has published INFO 16, which explains an employer’s right (and obligation) to deduct and take certain credits. Included in INFO 16, the CDLE explains Colorado’s new law governing an employer’s ability — by way of a new very specific timeline — to deduct “to recover the amount of money or the value of property that an employee failed to properly pay or return to the employer when their job ends.”