Labor & Employment Law Updates
This week, the Second Circuit Court of Appeals, which hears appeals from federal courts in Connecticut, New York, and Vermont, held that discrimination based on sexual orientation violates Title VII of the Civil Rights Act of 1964 (“Title VII”).
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Companies seeking to protect trade secrets from former employees’ misappropriation will have to show evidence of irreparable harm in order to obtain a preliminary injunction, based on a Tenth Circuit decision disallowing courts from presuming such harm simply because the company brings claims under the Defend Trade Secrets Act (the “DTSA”) or the Colorado Uniform Trade Secrets Act (the “CUTSA”). The First Western Capital Management Co. v. Malamed decision marks a significant change from previous Tenth Circuit law, and practically makes it harder for a party to get a preliminary injunction in trade secret misappropriation lawsuits.
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In the #MeToo era, consequences of harassment allegations are far-reaching and often take effect without the filing of a lawsuit. Last week Steve Wynn, CEO of Wynn Resorts, stepped down after allegations of sexual misconduct put pressure on his ability to remain in his former position and shares of Wynn Resorts stock plummeted nearly 20%.
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Last month, a federal district court in Pennsylvania held that an employee cannot be held liable under the Computer Fraud and Abuse Act (CFAA) for misusing information because she was authorized to access it in the first place. A description of the CFAA, the Teva Pharmaceuticals case, and practical takeaways follows.
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In January, Colorado lawmakers convened for the 2018 state legislative session. Below is a summary of three noteworthy proposed bills that would impact Colorado employers.
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A federal court has vacated the Equal Employment Opportunity Commission’s (“EEOC”) rules that allow employers to provide incentives of up to 30% of the cost of an employee’s health insurance premiums for employee participation in wellness programs. The effective date of the ruling is January 1, 2019, which gives employers just under a year to ensure compliance.
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On January 5, 2018, the U.S. Department of Labor (DOL) adopted a new test for determining when interns are employees who must be paid in accordance with the Fair Labor Standards Act (FLSA). Although federal courts over the last several years had rejected the Obama administration’s rigid and mandatory six-prong test for whether someone can by properly classified as an unpaid intern under the FLSA, the DOL has now formerly adopted a more flexible primary beneficiary/economic reality test.
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The Tax Cuts and Jobs Act of 2017 (the “Tax Bill”), which President Trump signed into law on December 22, 2017, eliminates companies’ ability to deduct settlement payments in sexual harassment cases, where such payments are subject to non-disclosure clauses (“NDAs”). Under the extremely broad provision, “No deduction shall be allowed” for “(1) any settlement or provision related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or (2) attorney’s fees related to such a settlement or payment.” The prohibition applies to amounts “paid or incurred” after December 22, 2017, meaning that companies currently negotiating sexual harassment claims are affected.
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The United States Department of Labor (“DOL”) has proposed new regulations which would allow employers who do not take a tip credit to open tip pools to non-tipped employees. Employers use tip credits to pay the tipped minimum wage (an amount lower than federal or state minimum wage) and rely upon the tips employees receive to cover the difference between the employees’ tipped minimum wage and the state or federal minimum wage. Under current federal law, employers can require tipped employees to pool or share tips only among employees who regularly and customarily receive tips (i.e., servers, bartenders, and bussers). At the federal level, the current restriction applies regardless of whether the employer claims a tip credit. The DOL proposal would still prevent employers who use tip credits from pooling tips with non-tipped employees.
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The National Labor Relations Act’s (NLRA) test for determining whether multiple businesses are joint employers has been restored to its traditional interpretation by the Republican-Majority National Labor Relations Board (NLRB). In Hy-Brand Indus. Contractors, Ltd., the NLRB overruled Browning-Ferris Indus., one of the Obama-era NLRB’s more contentious rulings, in a 3-2 decision, calling the Browning-Ferris decision “a distortion of common law as interpreted by the Board and the courts.”
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The newly Republican-majority National Labor Relations Board (“NLRB” or “Board”) has wasted no time setting aside controversial Obama-era Board decisions. This week’s blog focuses on last week’s decision in The Boeing Company, which concerns the legality of employee handbook rules. Next week we will discuss the Board’s reversal of the Obama-era rule governing joint employer status.
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The newly-confirmed General Counsel of the National Labor Relations Board (“NLRB”), Peter B. Robb, issued a Memorandum that signals sweeping, management-friendly changes for the NLRB’s Office of the General Counsel. In his Memorandum, the General Counsel announced a wide-range of cases that must be sent to the Division of Advice (which provides guidance on “difficult and novel issues”), for re-analysis.
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Paid leave has been a high-profile issue in Congress this year after President Trump and his daughter, White House aide Ivanka Trump, asked Congress to find ways to consider paid leave for working families. In Colorado, there is currently no requirement for employers to provide paid family and medical leave to their employees. Several bills have been introduced to Congress this year which would allow employees to receive some form of paid leave.
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The #MeToo movement—in which women and men have used social media to share their stories of sexual harassment—has had wide-reaching effects. The movement has exposed harassment by esteemed entertainers, businesspeople, and newsmen, resulted in numerous termination decisions, and, some say, has “destigmatize[ed]” the issue for victims of sexual abuse and harassment.
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In 2018, the federal minimum wage will remain at $7.25 per hour, which has been the rate since 2009. Numerous states, cities, and municipalities have minimum wage requirements that exceed the federal rate. In 2018, the minimum wage rates in 19 states, including Colorado, and the District of Columbia, will increase.
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As companies evaluate their year-end performance, many will decide to close plants or lay off employees in unprofitable divisions. Before doing so, companies should pay close attention to the requirements of the Worker Adjustment and Retraining Notification Act of 1988 (“WARN Act”).
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Last week, the Tenth Circuit upheld a dismissal of an employee’s age discrimination, disability discrimination, and retaliation claims. This decision reminds employers that courts will not allow every claim filed by an employee to proceed.
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On October 30, 2017, the U.S. Department of Labor (“DOL”) appealed the federal district court decision striking down the Obama-Era white collar exceptions, which proposed raising the salary level at which companies must pay overtime to employees from $23,660.00 to $47,476.00 per year. The DOL plans to ask the court to stay the appeal while considering whether to re-write the overtime rule.
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This article discusses recent legislative activity in the U.S. House of Representatives and Senate that reflects a move toward employer-friendly legislation, as well as tighter mandates concerning verification of employees to work in the United States.
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Employers who hire foreign workers are now likely to undergo additional scrutiny. The United States Department of Justice Immigrant and Employee Rights Section (“DOJ/IER”) and the State Department’s Bureau of Consular Affairs (“DOS/CA”) have teamed up in a new effort to combat visa fraud and discrimination against U.S. workers. The aim of the partnership is to protect U.S. workers from discrimination by an employer preferring to hire foreign workers. The agencies will share information about employers that may be engaging in unlawful discrimination, such as by making misrepresentations in their use of employment-based visas.
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