Tag Archive for: confidentiality

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.
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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.

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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.

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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.

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Colorado passes new law severely limiting restrictive employment agreements, including non-competes, non-solicits and even some non-disclosures

Colorado passed HB 22-1317, which severely limits restrictive employment agreements, including non-competes, non-solicits and even some non-disclosures. HB 22-1317 is currently before the Governor where it is expected to become law without veto.

HB 22-1317 applies only to agreements containing such provisions if entered into on or after 8/10/2022; however, the Act contemplates the possibility that a referendum petition will be filed by voters to contest it, in which case HB 22-1317 provides it will be held in abeyance without any part taking effect until after the November 2022 state election. Absent a successful challenge by referendum in this fall’s vote, HB 22-1317 will entirely restructure Colorado’s longstanding law in this area, CRS 8-2-113.

First, like existing Colorado law, HB 22-1317 renders void all non-competes unless they fall into certain defined exceptions. However, unlike existing Colorado law, HB 22-1317 significantly limits the available exceptions to only the following three categories:

  1. Covenants associated with the sale of a business, which can include sales arranged as so-called asset deals.
  2. Covenants that (a) are no broader than what is reasonably necessary to protect trade secrets (b) so long as the individual earns enough to qualify as a “highly compensated worker,” a legally defined phrase with a minimum earning level set by the CDLE, currently at $101,250 per year. Note: HB 22-1317 does not permit such covenants for the protection of mere confidential information; the information must instead rise to the level of a “trade secret” as otherwise defined in and protected by Colorado law.
  3. Mere non-solicits for customers (not non-competes) if the worker earns at least 60% of the “highly compensated worker” amount (currently $101,250×60%=$60,750 per year).

Note: Under HB 22-1317 there is no longer an exception permitting non-competes for “executive and management personnel and officers and employees who constitute professional staff to executive and management personnel.”

Second, each of those three exceptions are available only after a new written notice is provided. HB 22-1317 will require that written notice be provided (a) to prospective workers before the worker accepts the offer of employment and (b) to current workers at least 14 days before the covenant will be effective or additional compensation is provided or a change in the employee’s terms or conditions of employment occurs as consideration for the covenants, whichever is earlier. The written notice must be provided in a document separate from whatever document contains the covenants. It must be written in “clear and conspicuous terms in the language in which the worker and employer communicate about the worker’s performance.” It must be signed by the worker. Copies must be made available upon request by the worker once per year. The notice must either provide a copy of the agreement containing the covenant or identify that agreement “by name and state() that the agreement contains a covenant not to compete that could restrict the workers’ options for subsequent employment following their separation from the employer.” The notice must “direct() the worker to the specific sections or paragraphs of the agreement that contain the covenant not to compete.”

HB 22-1317 makes additional revisions to an employer’s ability to impose covenant-like restrictions in the event the employer provides employer-paid training (which does not generally include “normal, on-the-job” training) and in situations involving physicians.

Next, HB 22-1317 prohibits non-disclosure agreements (confidentiality agreements) to the extent they seek to protect “general training, knowledge, skill or experience whether gained on the job or otherwise.” Nor can such an agreement apply to “information that is readily ascertainable to the public, or information that a worker otherwise has a right to disclose as legally protected conduct.”

It is not clear from HB 22-1317 if its written notice requirements apply to non-disclosure agreements (confidentiality agreements). It appears on its face as drafted that HB 22-1317 only requires such written notice for covenants not to compete, which may include non-solicits (to the extent within the above three exceptions) and not for a non-disclosure agreement (confidentiality agreement) that contains no non-compete and no non-solicit.

HB 22-1317 also prohibits contrary choice of law and choice of forum provisions; if a worker resides primarily in or works in Colorado, at the time of termination, Colorado law will apply, and the worker may not be required to litigate outside of Colorado.

HB 22-1317 imposes new penalties and permits the Colorado Attorney General to take action directly against a violating employer. Both employees and the Colorado Attorney General can bring a declaratory action to invalidate violative covenants.

Employers should review all agreements containing covenants in Colorado. This includes not only formal non-compete/non-solicit agreements, but also confidentiality (non-disclosure, aka proprietary information agreements). This includes all agreements such clauses, for example, any equity incentive agreements, restrictive stock grants, stock option awards, etc. Employers are reminded to review not only for going-forward compliance in terms of such covenants but also their choice of law and choice of forum provisions.

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CDLE revises INFO no. 9 regarding Colorado Equal Pay law’s posting requirements

Following up on its recent informal email announcement, the CDLE has revised its Interpretive Notice and Formal Opinion (INFO) no. 9 interpreting Colorado’s Equal Pay for Equal Work Act’s posting requirements. Because the CDLE does not go through formal rulemaking when it issues INFOs, they do not carry the weight of law; however, they the CDLE’s opinion of how the law should be interpreted and reflect how the CDLE intends to interpret the law when called upon to apply it.

In these revisions, the CDLE confirmed its prior statement that covered employers may not evade the law by simply posting disclaimers in a job posting to the effect that Coloradans are ineligible. The CDLE confirmed here its position that these posting requirements do generally apply whenever Coloradans can access a posting, the work can be performed in Colorado (even if remotely into another state) and certainly when it can only be performed in Colorado. Key new language has been included in the following passages from INFO no. 9:

Covered job postings include any posting by a covered employer for either (1) work tied to Colorado locations or (2) remote work performable anywhere, but not (3) work performable only at non-Colorado worksites — as discussed below, under the header, “Out-of-State Jobs Are Excluded.”

…

Out-of-State Jobs Are Excluded. Employers need not disclose compensation for jobs to be performed entirely outside Colorado (which includes non-Colorado jobs that may include modest travel to Colorado), even if the job posting is in, or reaches, Colorado. Because the text of the Act excludes no jobs, the out-of-state exception is a merely implied one that must be applied narrowly, only where an out-of-state worksite makes Colorado law arguably inapplicable. The out-of-state exception therefore applies to only jobs tied to non-Colorado worksites (e.g. waitstaff at restaurant locations in other states), but not to remote work performable in Colorado or elsewhere. Thus, a remote job posting, even if it states that the employer will not accept Colorado applicants, remains covered by the Act’s transparency requirements: the Act expressly covers all jobs, so a Colorado-covered employer’s posting of work performable anywhere is not within the narrow implied exception for out-of-state worksites to which Colorado law is arguably inapplicable.

Out-of-State Postings Are Excluded. Employers need not disclose compensation in job postings made entirely outside Colorado. For example, compensation and benefits need not be included in a printed advertisement or posting entirely in another state, but must be included in an online posting accessible by Colorado residents.

The CDLE added language confirming this is true for promotional opportunities as well:

As with job postings generally — see the above section, “Out-of-State Jobs Are Excluded,” as to the scope of the out-of-state exemption applicable here as well — remote jobs do not qualify for this exclusion; promotional opportunity notices for such jobs must include compensation and benefits.

Regarding promotional opportunities, INFO no. 9 continues to require that, if not actually provided to employees, the posting — such as on an intranet site — “must be posted for long enough that employees can reasonably access it.” The CDLE does not give further guidance on how long that would be.

Unfortunately some of the new language is likely to increase not decrease confusion about this new law. Consider for example this sentence (emphasis added), which apparently was meant to confirm that a simple Help Wanted sign is not a “posting” and need not contain information about compensation, benefits, etc.

A “posting” is any written or printed communication (whether electronic or hard copy) that the employer has a specific job or jobs available or is accepting job applications for a particular position or positions, but not a “Help Wanted” sign or similar communication indicating only generally, without reference to any particular positions, that an employer is accepting applications or hiring.

Did the EEOC really intend to require that a small family-owned restaurant who hangs a “Cooks Wanted” sign in the window has to print the salary range, benefits, etc., on the sign?  Consider a sign at a larger company saying “Drivers Wanted”; how could such a sign even contain all the information that is encompassed in a driver’s position?

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Supreme Court rules CFAA is not available in most employment lawsuits involving trade secrets, NDA’s, non-competes and non-solicits

Resolving a long-running split among the lower courts, the Supreme Court has, unfortunately for employers, held that the CFAA (Computer Fraud and Abuse Act) is not available in most lawsuits against current and former employees involving trade secrets, NDA’s, non-competes and non-solicits. The CFAA is a powerful federal law that allows enhanced remedies for companies who are the victim of someone using their computers “without authorization.” It has, in many jurisdictions, been the frequent basis for lawsuits against current and former employees who use computers and the data on computers, such as customer lists, pricing information and other trade secrets or confidential information, to compete against their employers.

Many jurisdictions had held that, as soon as an employee undertakes a disloyal act — such as violating an NDA, non-compete, or common law breach of loyalty — any subsequent use, including access, of their employer’s computers, including data on those computers, is “without authorization.”

The Supreme Court rejected that position and held, instead, that the CFAA only “covers those who obtain information from particular areas in the computer — such as files, folders, or databases — to which their computer access does not extend. It does not cover those who … have improper motives for obtaining information that is otherwise available to them.”

Why would the Supreme Court strip employers of such a valuable tool for protecting their confidential information? Remember the CFAA was only used in such situations when — and because — the employee violated the company’s rights. The majority was concerned that the CFAA also includes criminal penalties. Indeed the case arose as a criminal prosecution. The majority reasoned that permitting the CFAA to cover those whose use was unlawful due to an “improper motive” would result in a “breathtaking” number of criminal cases. A 3-justice dissent disagreed, but until and unless Congress amends the CFAA, the Supreme Court’s decision has stripped employers of a previously valuable tool.

Employers (and employees) involved in or anticipating lawsuits that include CFAA claims should immediately review the Supreme Court’s decision and its impact on their litigation.

Source: Van Buren v. U.S., case no. 19-783 (6/3/2021).

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CDLE issues Equal Pay Transparency rules under Colorado’s Equal Pay for Equal Work Act

As noted in a prior blog post, the CDLE has finalized a crop of new rules on a variety of topics. This post addresses its Equal Pay Transparency Rules, effective January 1, 2021.  The Equal Pay Transparency Rules focus on issues related to Colorado’s new Equal Pay for Equal Work Act (CEPEWA), especially its requirements for postings related to job openings and promotional opportunities. Highlights of the rules include the following:

  • Job Postings: Rule 4.1 explains the obligation to include in “all job postings, including but not limited to promotions,” help-wanted ad’s and Internet job listings, whether for an hourly or salaried position, “a range of hourly or the salary compensation, and a general description of all of the benefits and other compensation to be offered to the hired applicant,” quoting CRS 8-5-201(2). The CDLE explains this requires including:
    • If “a range thereof” is posted, then it must be no broader than “the lowest to the highest pay the employer in good faith believes it might pay.” The CDLE confirms that an employer may “ultimately pay more or less,” so long as the posted ranges was at the time the employer’s good faith estimate (rule 4.1.2).
    • And, a “general description” of “any bonuses, commissions, or other forms of compensation.”
    • And, a “general description” of all benefits, except “minor perks.” The CDLE explains anything that is tax-reportable will not be considered a “minor perk.”
  • Promotional Opportunities: Rule 4.2 explains the obligation to make “reasonable efforts” to “announce, post or otherwise make known” all “promotional opportunities” to then-current current employees.
    • Content: The information that must be provided for promotional opportunities is the same as for job postings, plus job title and the “means by which employees may apply.”
      • Confidentiality: There is a limited exception for promotional opportunities where the employer can demonstrate a “compelling need to keep a particular opening confidential because the position is still held by an incumbent employee who, for reasons other than avoiding job posting requirements, the employer has not yet made aware they will be separated” (rule 4.2.5(A)). This exception seems oriented to a situation where a company has decided to begin a search to replace a high level employee, such as a C-level officer, who hasn’t yet been told they will be terminated. This exception does not excuse notice forever, it only delays the obligation to provide notice until “any employees are told” of the opportunity; at that point all employees must be told, at least who have the minimum qualifications to do the job or who do a “substantially similar” job. And, this exception is eventually extinguished in its entirety once “the need for confidentiality ends;” in other words, once the CEO is told or the rumor mill distributes the news informally, notice must be provided.
    • To Whom: That information must be provided to all employees. An employer may not limit disclosure to only qualified employees. However, an employer may, after individuals express interest, “screen or reject candidates based on (their) qualifications” (rule 4.2.4).
    • How: An employer satisfies this obligation to “announce, post or otherwise make known” if it discloses the required information in a way that employees can effectively access within the workplace, including on the company’s intranet or by posting a hard copy on a bulletin board, so long as employees are told where to find such information and, if not all employees have access to that location, it is made known to the remaining employees in some other way.
    • When: The deadline for an employer to provide this notice is “the same calendar day and prior to making a promotion decision,” quoting CRS 8-5-201.
    • “Promotional Opportunity”: What constitutes a “promotional opportunity”? This has been one of the chief areas of speculation as employers await CEPEWA’s effective date January 1, 2021. Rule 4.2.5 brings some clarity, though there will definitely be no shortage of litigation on the issue.
      • Rule 4.2.1 defines a “promotional opportunity” as any time “when an employer has or anticipates a vacancy in an existing or new position that could be considered a promotion for one or more employee(s) in terms of compensation, benefits, status, duties or access to further advancement.” Thus a promotion is in the eye of the employee(s), not the employer, and the employee’s reason may be nothing more than a perceived sense of enhanced “status.” A promotion can exist whether it involves a position that is “existing or new.”
        • However, note, the language in rule 4.2.1 includes as an apparent requirement that the opportunity involve a “vacancy.” The importance of that word is not clear. Is it intended to mean that an increase in grade does not constitute a “promotional opportunity”? For example, assume an employee is hired into the position, Technician, at entry level, grade I, then as her skills progress and/or as she acquires seniority, she gains higher pay as a Technician level II, is that a “promotional opportunity” because there was an increase in pay and title, or is it not because there was no “vacancy” involved?
      • Rule 4.2.5(B) discusses “automatic” promotions “after (a) trial period.” No notice is required when a worker’s promotion is due to completion of a “trial period” and where the employee is guaranteed at hire, in writing, that they will be so promoted “within one year” after being hired. That guaranty can be included in any writing, to include an offer letter, an employment agreement, or a policy. The only conditions that an employer can impose are the employee’s “own performance and/or employer needs.”
        • In its prefatory Statement explaining these rules, the CDLE confirmed this exception is very limited and does not include “in-line” or “elevator” promotions. As examples of “elevator” promotions it gives the examples of elevations “from junior to senior positions, or from training to full positions.”
        • Question: Again, consider the hypothetical increase in grade (above). As noted above, there is no vacancy involved in that hypothetical, so arguably under rule 4.2.1, it does not count as a “promotional opportunity,” but does rule 4.2.5 and the prefatory Statement explaining it suggest that, even despite the lack of a “vacancy,” such an enhancement is a “promotional opportunity” for which notice must be given? As noted the progression in grade does bring with it increased compensation and arguably an enhanced sense of “status.”
        • Likewise, consider the common hypothetical that law firms will face. Typically law school graduates are hired as “associate” attorneys. Eventually, as their careers progress, some become “shareholders,” aka “partners” (depending on the firm’s legal entity, corporation or partnership). Is that elevation from associate to shareholder, a “promotional opportunity”? If so, must all law firms disclose to all employees of the firm (shareholder, associate, staff) the compensation ranges for their shareholders?  Here too there is again generally no “vacancy” involved; most firms do not limit elevations to some discrete number of vacancies in their shareholder ranks; there is however an increase in compensation and status.
      • Rule 4.2.5(C) posits an exception for “temporary, acting, or interim hires.” No promotional-opportunity notice is required before hiring a temp, or filling a vacancy with an acting or interim worker. Again though, it is a limited exception available only for 6 months and only if the person is hired without expectation to become “permanent.” “If the hire may become permanent, the required promotion posting must be made in time for employees to apply for the permanent position.”
    • Job Openings and Promotional Opportunities, Extraterritoriality: Rule 4.3 has probably received the most attention from the media. In these final rules, the CDLE walked back its proposed language regarding extraterritoriality. Now, employers need not provide either the job opening or promotional opportunity notice for “(1) jobs to be performed entirely outside Colorado, or (2) postings entirely outside Colorado.” In its prefatory statement the CDLE explains that does not include — in other words, notice is required for — each of the following situations:
      • “remote jobs” that “could be performed in Colorado” (emphasis in original),
      • “and even for (situations involving) non-Coloradoans hired for remote work (who) may move to Colorado after being hired by Colorado employers,”
      • and any “Internet posting accessible in Colorado.”

Employers in Colorado should take time to familiarize themselves with these new rules.

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EEOC publishes YouTube webinar on ADA, Rehabilitation Act and coronavirus

The EEOC published a short 42-minute YouTube video on the ADA, Rehabilitation Act and coronavirus.  The webinar fleshes out the EEOC’s recent coronavirus guidance and identifies certain questions that it believes it is currently unable to answer, including the following:

  • Whether coronavirus (COVID-19) is or could be a disability protected by the ADA?

Questions addressed include, in addition to those raised in the above guidance:

  • Whether an employer can ask an employee if his/her family has tested positive for coronavirus? Here, the EEOC believes that question is too narrow, because it is limited to questions about the employee’s family and as such the EEOC says it believes the question might implicate the Genetic Information Nondiscrimination Act (GINA); therefore, the EEOC urges employers instead to ask if the employee has had any such contact with anyone whom he/she knows to have tested positive.
  • Whether an employer, when disclosing that someone has tested positive, can disclose that person’s identity? The EEOC repeats its position in its above guidance’s instruction that employers, upon learning of a positive coronavirus test result, have some ability to disclose the same within a true need-to-know basis, and that it may be able to disclose to co-workers that someone has tested positive, but it repeats the employer should not generally report the person’s identity. That is true, the EEOC says, even where coworkers may be guessing or attempting to guess at the person’s identity. It gives as an example that the company may report that a person is teleworking without telling his coworker’s that the reason for his absence from the workplace is a positive test result. Likewise the EEOC addresses the issue where an employer may be faced with a concern that disclosing something as general as “someone at this location” or “someone on the 4th floor” has tested positive, is not sufficient information for concerned coworkers; here too, the EEOC restates its position that, even in that situation, the employer should not disclose the person’s identity. 
  • Whether allowing workers to telework during the coronavirus crisis may be later used by a disabled worker requesting the right to telework after the coronavirus crisis? The EEOC answers flatly, no, the fact that an employer allows teleworking during this coronavirus crisis cannot be used as evidence that teleworking might be a reasonable accommodation outside the coronavirus crisis. However in an unhelpful muddling of its answer, the EEOC added that it “could” be somehow relevant to showing that telework was in general feasible at least in some circumstances, theoretically.

The EEOC says that, while teleworking, HR professionals and others with a need-to-know medical information must store information, even at home, in a confidential manner, including not leaving notes where they can be seen. In a frankly absurd moment, the EEOC actually recommends HR professionals consider writing their notes while teleworking “in code.”

The EEOC noted that, during the coronavirus crisis, employers may be having difficulty obtaining doctor’s notes related to ADA accommodation requests and suggests that employers consider whether other documentation might suffice — arguably at least until a doctor’s note becomes available — such as a “health insurance record” or “a prescription.”

While not particularly robust or helpful on some of those difficult questions — and adding to the confusion on some questions — the webinar is nonetheless recommended for HR professionals to review as soon as possible.

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EEOC issues guidance re Pandemic Preparedness in the Workplace

The EEOC issued a guidance entitled Pandemic Preparedness in the Workplace and the Americans with Disabilities Act. While the guidance does not answer some of the more difficult questions posed in the current coronavirus crisis, it does provide guidance on at least some questions employers are facing and are likely to face, including the following:

  • Before an influenza pandemic occurs, may an ADA-covered employer ask an employee to disclose if he or she has a compromised immune system or chronic health condition that the CDC says could make him or her more susceptible to complications of influenza?

No. …

…

  • Are there ADA-compliant ways for employers to identify which employees are more likely to be unavailable for work in the event of a pandemic?

Yes. …

…

Below is a sample ADA-compliant survey that can be given to employees to anticipate absenteeism.

ADA-COMPLIANT PRE-PANDEMIC EMPLOYEE SURVEY

Directions: Answer “yes” to the whole question without specifying the factor that applies to you. Simply check “yes” or “no” at the bottom of the page.

In the event of a pandemic, would you be unable to come to work because of any one of the following reasons:

    • If schools or day-care centers were closed, you would need to care for a child;
    • If other services were unavailable, you would need to care for other dependents;
    • If public transport were sporadic or unavailable, you would be unable to travel to work; and/or;
    • If you or a member of your household fall into one of the categories identified by the CDC as being at high risk for serious complications from the pandemic influenza virus, you would be advised by public health authorities not to come to work (e.g., pregnant women; persons with compromised immune systems due to cancer, HIV, history of organ transplant or other medical conditions; persons less than 65 years of age with underlying chronic conditions; or persons over 65).

Answer: YES______ , NO_______

…

  • May an ADA-covered employer send employees home if they display influenza-like symptoms during a pandemic?

Yes. …

  • During a pandemic, how much information may an ADA-covered employer request from employees who report feeling ill at work or who call in sick?

ADA-covered employers may ask such employees if they are experiencing influenza-like symptoms, such as fever or chills and a cough or sore throat. Employers must maintain all information about employee illness as a confidential medical record in compliance with the ADA. …

…

  • When an employee returns from travel during a pandemic, must an employer wait until the employee develops influenza symptoms to ask questions about exposure to pandemic influenza during the trip?

No. …

…

  • During a pandemic, may an ADA-covered employer ask employees who do not have influenza symptoms to disclose whether they have a medical condition that the CDC says could make them especially vulnerable to influenza complications?

No. …

…

Employers should take the time to review the EEOC’s guidance and familiarize themselves with the nuances of the EEOC’s carefully worded answers. In the foregoing summaries, for brevity’s sake, only the EEOC’s conclusions (like “No”) are cited, but the EEOC’s answers, as indicated by the ellipses (“…”) proceed to qualify its answers.

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In another reversal, NLRB holds employers can issue so-called “gag orders” to protect the confidentiality of workplace investigations

The NLRB has ruled that employers can issue so-called “gag orders” to protect the confidentiality of workplace investigations. A typical “gag order” would be an instruction by the company to employees (and other witnesses) not to discuss matters relevant to an on-going investigation.

The decision triggered a heated dissent from one Board member who argued it will allow employers, in #MeToo type matters, to further keep secret wrongful matters, such as the details of sexual harassment.

In issuing its decision the Board held that such “gag orders” will, still, draw individualized case-by-case scrutiny from the Board when they are “not
limited on their face to open investigations.”

In reaching its decision, the Board applied its new more permissive approach to analyzing handbooks and policies.

Source: Apogee Retail, 368 NLRB No. 144 (12/17/19).

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