DOL Releases Busy Spring Agenda

600px-US-DeptOfLabor-Seal_svgThe U.S. Department of Labor (DOL) has released its spring 2015 regulatory agenda, which provides a window into what we can expect from the agency over the coming months.  The agenda provides updates on 70 rulemaking measures and suggests that — with President Obama’s term approaching its end —  the DOL is putting its rule-making into high gear.

Here are some highlights from the agenda:

Overtime Pay

The DOL indicates that we should see the proposed rule redefining the white-collar exemption under the Fair Labor Standards Act (FLSA) in June. As we reported last year, President Obama has directed Labor Secretary Thomas Perez to “modernize and streamline” the regulations defining this exemption for executive, administrative, professional, outside sales, and computer employees. We expect that the proposed rule will narrow the white-collar exemptions, resulting in fewer employees qualifying as exempt from overtime requirements.

Use of Technology during Non-Working Hours

Also on the agenda is information seeking – in the pre-rule stage – on “the use of technology, including portable electronic devices, by employees away from the workplace and outside of scheduled work hours.” It appears that the DOL is seeking this information with an eye toward proposing a rule clarifying how this type of 21st Century off-the-clock work is compensated (likely to the benefit of employees).  The request for information is expected in August.

Reporting under the Labor-Management Reporting and Disclosure Act

Lastly, the DOL agenda also indicates that we should expect a controversial final rule on the narrowing of the “advice” exception under the Labor-Management Reporting and Disclosure Act (LMRDA) in December. The LMRDA requires employers and labor relations consultants (or other similar individuals) to report any agreement or arrangement they have to engage in activities to persuade employees concerning the right to organize or bargain collectively.  The LMRDA contains an exception for “advice,” stating that no employer or consultant has to file a report concerning services of a consultant if that consultant just gives “advice” to the employer. The proposed rule would limit the definition of “advice” to “oral or written recommendations,” so that any other activity would need to be reported.  This proposed rule has been on the books for a number of years and continues to face serious opposition from many groups — including the American Bar Association — because it raises critical concerns about attorney-client privilege.  We expect lengthy legal challenges to this rule.

It should be a busy second-half of the year for the DOL. We will keep you updated on any new developments.

Wage Theft Prevention Laws Spread… and D.C. deadline approaches

dc-blogThe District of Columbia has joined New York and California in enacting a Wage Theft Prevention Act.  And while D.C. employers have been required to provide certain notices since late February, the deadline for providing notices to current employees and meeting record-keeping requirements (including keeping more specific time records) is Wednesday, May 27th.

Wage Theft Prevention laws require employers to provide employees with a detailed notice setting out details about their compensation and how they are employed. While in California these notices need only be presented to non-exempt employees, in New York they must be given to all new employees (a requirement that employees be provided with notices annually was recently repealed).

The D.C. law requires that a notice similar to those required in these other jurisdictions  be provided to all current employees by Wednesday, May 27th (a sample of the “Notice of Hire” to be provided to employees notice can be found here).  Employers with employees in the District of Columbia need to act fast to provide these notices and post the required posting regarding the Wage Theft Prevention Act by the deadline.

But that’s not all…. the D.C. law also requires employers to record non-exempt employees’ “precise time worked”, rather than just “hours worked”. While the law doesn’t define “precise time worked,” it presumably requires that the employer record the employee’s start time, end time, and the beginning and end of any break time, rather than simply “eight hours worked.” The law requires that employers maintain these records for all employees who are non-exempt under D.C. standards (which are more employee-friendly than federal standards).

Companies with D.C. employees should confirm that notices are provided, that the required poster is posted and that a method for recording “precise time worked” is in effect by the time employees return from the Memorial Day holiday.

SEC Takes Aim at Confidentiality Agreements

We – and the SEC – think it’s a good time to review your confidentiality agreements.confidentiality-agreement (2)

It’s no secret that the Securities and Exchange Commission (SEC) has had employee confidentiality agreements on its mind for some time now. In the eyes of the SEC, confidentiality agreements, if overly-broad, may prevent or discourage would-be whistleblowers.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended the Securities Exchange Act to include protections and incentives for individuals who come forward with allegations of wrongdoing. Rule 21F-17(a) explicitly prohibits employers from taking action that would “impede” an employee from “communicating directly” with the SEC about a “possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement.”

On April 1, 2015, the SEC announced that it had settled its first enforcement action involving an overly-restrictive confidentiality provision under Rule 21F-17(a). The action primarily focused on a confidentiality statement that employees were required to sign in connection with the company’s internal investigation procedures. The statement read:

I understand that in order to protect the integrity of this review, I am prohibited from discussing any particulars regarding this interview and the subject matter discussed during the interview, without prior authorization of the Law Department. I understand that the unauthorized disclosure of information may be grounds for disciplinary action up to and including termination of employment.

The SEC determined that this statement violated the whistleblower protections under Rule 21F-17(a), even though there was no evidence that any employee was prevented or discouraged from communicating with the SEC because of the language. The company agreed to resolve the matter by: (i) paying a penalty; (ii) agreeing to cease and desist from any future violations, (iii) amending the language of the provision; and (iv) agreeing to make reasonable efforts to contact employees who had already signed the agreement to inform them that they did not need to gain permission from anyone to contact governmental agencies. The SEC approved the following amended language:

Nothing in this Confidentiality Statement prohibits me from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. I do not need the prior authorization of the Law Department to make any such reports or disclosures and I am not required to notify the company that I have made such reports or disclosures.

In light of this ruling (and the NLRB’s activity in this area that we discussed in our post yesterday), we recommend that you review all agreements containing confidentiality clauses – including employment agreements, severance agreements, employee handbooks, settlement agreements, nondisclosure agreements and any other similar agreements. If necessary, these clauses should be revised to include an express statement that nothing in the agreement discourages and/or prevents any individual from communicating with any government agency, including the SEC.

“Spring Cleaning” Item: Review Your Employee Handbook

You may want to include a review of your employee handbook in your “spring cleaning” this year.

National Labor Relations Board Building Sign

Employee handbooks and work policies have been at the forefront of the National Labor Relations Board’s mind recently. The Board has held that a work rule may violate Section 8(a)(1) of the National Labor Relations Act if the rule has a “chilling effect” on employees’ Section 7 activity – whether it be union activity or simply discussing the terms and conditions of employment with one another. According to the Board, a work rule not only violates the Act if it explicitly restricts this protected activity, but also if it: (1) can be reasonably construed by its language to prohibit protected activity; (2) was promulgated in response to union or other protected activity; or (3) was actually applied to restrict the exercise of the protected rights.

Earlier this spring, the Board’s General Counsel issued a detailed report providing examples of unlawful policies as well as their lawful counterparts. The report discusses:

  • Confidentiality Rules
  • Rules Regarding Employee Conduct toward the Company and Supervisors
  • Rules Regulating Conduct Towards Fellow Employees
  • Rules Regarding Employee Interactions with Third Parties
  • Rules Restricting Use of Company Logos, Copyrights, and Trademarks
  • Rules Restricting Photography and Recording
  • Rules Restricting Employees from Leaving Work
  • Conflict-of-Interest Rules

The full text of the report can be found at: http://www.nlrb.gov/reports-guidance/general-counsel-memos.

In light of this report, we recommend that you carefully review all of your policies, with particular emphasis on the ones listed above.

EEOC Issues Proposed Regulations on Employer Wellness Programs

EEOC ImageCan your employees participate in a wellness program through work? Do you offer financial incentives for participating in the program? If so, listen up.

In April, the U.S. Equal Employment Opportunity Commission issued proposed regulations focusing on how the American with Disabilities Act applies to corporate wellness programs. The proposed regulations give some guidance on how to legally use financial incentives to encourage workers to participate in such programs.

Although Title I of the ADA generally prohibits employers from obtaining medical information from employees, it allows employers to give medical examinations to employees and ask about their health if they are part of a voluntary “employee health program.” Before the proposed regulations, the EEOC had not yet determined whether employers could offer financial incentives to encourage employees to participate in such programs or whether offering incentives would make participation involuntary. The new proposed regulations answer these questions — according to the EEOC, employers may offer incentives up to 30% of the cost of the employee-only coverage to employees who participate in a wellness program and/or achieve certain health outcomes.

The proposed regulations (http://www.regulations.gov), in most pertinent part:

  • Define an “employee health program;”
  • Set forth the requirements that must be met for a program to be considered “voluntary;”
  • Detail the 30% of cost incentive limit; and
  • Set forth additional confidentiality requirements of information gathered during participation in wellness programs.

Although these regulations are only proposed and may or may not go into effect as written in the near future, we suggest that you review your wellness programs and corresponding financial incentives in light of the regulations. Please note that under existing laws – even before the introduction of the proposed regulations – you cannot:

  • Require employees to participate in a wellness program;
  • Deny health insurance to employees who do not participate in the program;
  • Take any adverse employment action or retaliate against, interfere with, coerce, or intimidate employees who do not participate in the program; or
  • Deny employees with disabilities reasonable accommodations that allow them to participate in a wellness program and receive any related incentives.

Supreme Court Speaks on Pregnancy Accommodation

supreme court sealOver the next couple of days, we are catching up on some recent developments.  The first one we are going to discuss is the long-awaited decision by the Supreme Court inYoung v. UPS.

In Young, a pregnant employee requested light duty as an accommodation under the Pregnancy Discrimination Act (“PDA”).  The PDA is a subsection of Title VII of the Civil Rights Act of 1964 that requires employers to treat “women affected by pregnancy…the same for all employment-related purposes…as other persons not so affected but similar in their ability or inability to work.”

The plaintiff argued that she should have been given light duty because the defendant, UPS, gave light duty assignments to employees with disabilities under the Americans with Disabilities Act (“ADA”), those with workplace injuries, and those who had lost Department of Transportation (“DOT”) certifications.  UPS argued that it did not act unlawfully because it treated the plaintiff the same way it treated any other employee with physical limitations who did not meet UPS’ requirements for light duty — i.e., who did not have a disability under the ADA, did not have a workplace injury, and had not lost DOT certifications.

In its decision on March 25, 2015, the Court set out a new standard for assessing accommodation claims under the PDA. The Court held that a pregnant employee can make a prima facie case of pregnancy discrimination by showing that she requested an accommodation, that her request was denied, and that others similar in their ability or inability to work have been accommodated.  At that point, the employer must show that it had legitimate, nondiscriminatory reasons for accommodating other employees but not the pregnant employee.  The burden then shifts back to the employee to show that the employer’s reasons are pretexts for discrimination or that the employer’s policies impose a significant burden on pregnant employees which outweighs the employer’s reasons for the policies.

Although the decision did not go as far as some advocates for pregnant employees would have liked, it undoubtedly makes it easier for pregnant employees to bring claims under the PDA. Going forward, employers will be risking litigation if they reserve light duty assignments or other accommodations for only certain classes of employees, at least without a compelling justification for excluding pregnant employees.   In light of this, employers should review their policies and practices regarding pregnancy-related accommodations for consistency.  All requests for accommodation should be taken seriously and employers should gather as much information as possible in evaluating each individual request. Doing so may reduce the likelihood of future pregnancy-related claims, as well as protect employers from potential liability.

For the full decision in Young v. UPS, visit www.supremecourt.gov/opinions/slipopinions.aspx.

Wisconsin becomes the latest “right-to-work” state

wisconsin-webOn March 9th, Wisconsin passed right-to-work legislation banning collective bargaining agreements that require private-sector workers to pay labor fees. The law, which makes Wisconsin the 25th state to pass such legislation, becomes effective immediately.

The legislation bans “union security clauses” — clauses that provide for the termination of an employee who fails to join and pay labor fees to the union — from being included in collective bargaining agreements.

Although this type of legislation started in the southern and western states, in recent years, Indiana and Michigan, traditionally union-friendly states, passed similar right-to-work laws. This type of legislation has proven to reduce state-wide union membership.

It seems unlikely that Illinois will implement right to work legislation in the private sector (at least with the current makeup of the legislature), but it is definitely on the forefront in the public sector.  Last month, Illinois governor, Bruce Rauner, announced a controversial executive order that would prohibit unions from requiring state workers to pay union fees.

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