BSCR Firm News/Blogs Feedhttps://www.bscr-law.com/?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10en-us15 Jan 2022 00:00:00 -0800firmwisehttps://blogs.law.harvard.edu/tech/rssOSHA Reacts to COVID-19 Pandemic and Issues Vaccine-or-Testing Mandate: What Employers Need to Know (Update)https://www.bscr-law.com/?t=40&an=119548&format=xml&p=5258&stylesheet=blog21 Dec 2021Employment & Labor Law Blog<p><strong>Update 12.21.2021:</strong></p> <p>On December 17, 2021, the Court of Appeals for the Sixth Circuit dissolved the stay issued by the Court of Appeals for the Fifth Circuit on November 12, 2021. All of the petitions challenging the ETS filed across the country had been consolidated in the Sixth Circuit for adjudication.</p> <p>The three-member panel issued a 2-1 decision dissolving the Fifth Circuit&rsquo;s stay. The standard for OSHA to issue its ETS is whether it is (1) necessary to protect employees from (2) a grave danger. The dissent provided a preview of what arguments to expect before the Supreme Court. The dissent pointed out that &ldquo;necessary&rdquo; can mean either &ldquo;useful&rdquo; or &ldquo;indispensable,&rdquo; and which definition is applied may well decide the case. Choosing the latter definition, the dissent found that OSHA had not proved that the vaccine-or-test mandate was &ldquo;indispensable&rdquo; to solving the COVID-19 pandemic. The dissent also questioned whether OSHA could establish that COVID-19 is a &ldquo;grave&rdquo; workplace danger, as opposed to a danger encountered in all aspects of life.</p> <p>The majority countered that Congress could not have intended &ldquo;necessary&rdquo; to require &ldquo;the most narrowly tailored&rdquo; response from OSHA. The majority also credited OSHA&rsquo;s findings that traditional workplaces are particularly ripe for transmission, placing workers at heightened risk while at work, and therefore have established a &ldquo;grave danger&rdquo; of COVID-19 transmission in the workplace. Judge Gibbons wrote a separate concurrence, noting that because OSHA has been tasked by Congress with making policy, the Court should not substitute its judgment for that of the agency.</p> <p>Following issuance of the decision dissolving the stay, OSHA announced via a litigation update that it will not issue citations for noncompliance with any ETS requirement before <b>January 10, 2022</b>, except for the testing requirement. Enforcement of the testing requirements under the ETS will not begin until <b>February 9, 2022</b>, as long as the employer is &ldquo;exercising reasonable, good faith efforts to come into compliance with the standard. For more information about the specific requirements, see our original blog post below.</p> <p>No party has so far indicated that it will petition the Sixth Circuit for rehearing en banc. The deadline to do so is December 31. The challengers to the ETS may be eager for a battle before the high court, rather than to seek rehearing. The Supreme Court has already received numerous emergency applications to freeze the Sixth Circuit decision, and has asked for responses to the challengers&rsquo; requests by December 30. Justice Kavanaugh will handle referral of the case to the full Court for review. However, grant of the application is not a foregone conclusion, as the Court recently rejected a challenge to New York&rsquo;s regulation requiring healthcare workers to receive a COVID-19 vaccine.&nbsp;</p> <p>In the event the Supreme Court accepts the case for review, there is no doubt interpretation of OSHA&rsquo;s enabling act will be front and center. However, in an emergency application filed by a group of 27 state attorneys general (including Missouri and Kansas) assert that the ETS also violates the Tenth Amendment, the Commerce Clause, and the Non-Delegation Doctrine. Religious groups have likewise asserted that the religious exemptions are inadequate and violate the First Amendment and the Religious Freedom Restoration Act of 1993. The state attorneys general requested that the Supreme Court impose an emergency stay of the ETS pending review, or in the alternative, grant expedited review and strike down the ETS.&nbsp;</p> <p><strong> Original Post 11.15.2021:</strong></p> <p>Since President Biden&rsquo;s September announcement that employers with 100 or more employees must require vaccination or weekly testing of their employees, observers have waited anxiously for details from the Occupational Safety and Health Administration. The new Emergency Temporary Standard (ETS), published by OSHA in the Federal Register on November 5, 2021, contains three main components: full vaccination, or weekly testing of employees who are not &ldquo;fully vaccinated&rdquo; (with attendant recordkeeping requirements), and a face covering requirement. These components are discussed in detail below.&nbsp;As employers and practitioners begin to navigate the ETS requirements, they should keep in mind these important points:</p> ►Starting December 5, 2021, unvaccinated employees must wear face coverings.&nbsp;<br /> <br /> ►Starting January 4, 2022, companies must implement and enforce a written mandatory vaccine policy.&nbsp;<i>Alternatively</i>, a company may adopt a written policy that gives its employees a choice to either become fully vaccinated <i>or</i> undergo weekly testing and wear a face covering at work.<br /> <br /> ►An employer&rsquo;s vaccine requirement is still subject to Title VII and the Americans with Disabilities Act. Employees with a sincerely held religious belief or practice contrary to vaccination or people who cannot be vaccinated due to a disability must be accommodated, unless accommodation would cause &ldquo;undue hardship&rdquo; on the employer. The EEOC has provided detailed guidance on what constitutes an &ldquo;undue hardship&rdquo; under the ADA. [<a href="https://www.eeoc.gov/laws/guidance/enforcement-guidance-reasonable-accommodation-and-undue-hardship-under-ada">Enforcement Guidance on Reasonable Accommodation and Undue Hardship under the ADA</a>]&nbsp;&nbsp;<br /> <br /> ►A person is not considered &ldquo;fully vaccinated&rdquo; under the ETS until two weeks after they receive the final vaccine dose (or single dose of the Johnson &amp; Johnson vaccine).&nbsp;Even employees who have received the full dosage will be subject to weekly testing requirements until two weeks has elapsed from the final dose.&nbsp;Employers should encourage workers who plan on getting vaccinated to do so now to avoid the weekly testing requirements.<br /> <br /> ►OSHA intends for the ETS to preempt all inconsistent state and local laws and regulations, including prohibitions on vaccine mandates and mask requirements.<br /> <br /> ►OSHA does <i>not </i>intend for the ETS to supplant collective bargaining agreements with terms that exceed OSHA requirements.<br /> <br /> ►On Friday, November 5<sup>th</sup>, a three-judge panel for the Fifth Circuit Court of Appeals issued an emergency stay of the ETS, citing &ldquo;grave statutory and constitutional issues.&rdquo;&nbsp;Petitioners moved for a permanent injunction and the Court is proceeding with an expedited briefing schedule.&nbsp;It is possible that the entire rule will be struck down by the Court, or that only parts of the rule will survive this permanent injunction stage. It is also unclear whether the stay applies in states outside of the Fifth Circuit (which covers only Texas, Louisiana, and Mississippi) and whether the Court will refer the case to the Multi-District Litigation Panel for consolidation with other cases filed around the country. Another U.S. Circuit Court of Appeals &ndash; the Seventh Circuit &ndash; has weighed in on COVID vaccination requirements, handing down in August a forcefully written opinion upholding Indiana University&rsquo;s vaccination requirement for its new and returning students. We will continue to update this blog as these cases develop. <p><b><br /> Counting Employees</b></p> <p>How do you know if the ETS applies to your company?&nbsp;Consistent with the ETS, counting an &ldquo;employee&rdquo; should be interpreted very broadly.&nbsp;OSHA explains that the 100-employee threshold was determined based on administrative feasibility for the employer, rather than on likelihood of community spread, with smaller businesses being less able to easily absorb additional administrative costs.</p> <p>Under the ETS, all employees must be counted, regardless of where they are located and across however many facilities.&nbsp;The ETS does not differentiate between part-time and full-time employees (independent contractors do not count toward the 100-employee threshold).&nbsp;While remote workers and employees who work exclusively outside are not subject to the vaccine or testing requirements, they do count towards the 100-employee threshold.&nbsp;For example:</p> <p>►A company with 50 full-time and 50 part-time employees at one facility has 100 employees and is subject to the ETS.</p> <p>►A company with 50 full-time employees at one facility and 50 full-time employees at another facility in a different city has 100 employees and is subject to the ETS.</p> <p>►A company with 80 full-time employees at one facility and 20 temporary employees provided by a staffing agency has 80 employees and is not subject to the ETS.</p> <p>►A company with 50 full-time in-person employees and 50 remote workers has 100 employees and is subject to the ETS even though the remote workers are not subject to vaccine or testing requirements, except when visiting an in-person workplace.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>►A franchisor company with 100 employees is subject to the ETS, but an individual franchisee of that company with only 25 employees is not subject to the ETS.</p> <p><b>Vaccination Requirements</b></p> <p>The most groundbreaking element of the ETS is the authority it gives employers with 100 employees or more to require each employee to reach &ldquo;fully vaccinated&rdquo; status, with few exceptions.&nbsp;</p> <p><b>a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><b>Vaccination Status</b></p> <p>Employees who are not excluded from the ETS (that is, employees who are 100% remote or exclusively outdoors) must provide proof of vaccination to the employer. Proof of vaccination may be in the form of a state issued card &ndash; which may be scanned or photographed from a phone and e-mailed &ndash; a QR Code, Apple Wallet ID, or similar electronic vaccination card.</p> <p>If the employee cannot provide proof of vaccination, the employee may provide a signed statement attesting to: (1) their vaccination status (either full or partial); (2) their vaccination card being lost or stolen, and the employee has not been able to secure a copy despite efforts to do so, (3) a description of the facility and the provider of the vaccination; and (4) a declaration, certification, or oath that the statement is true and accurate and acknowledging that providing false information may subject the employee to criminal penalties.</p> <p>Employees who do not meet one of the proof of vaccination requirements must be treated as not fully vaccinated, and they are subject to weekly testing.</p> <p>The employer is required to receive and process requests for medical or religious accommodation and provide accommodation as necessary.&nbsp;&nbsp;</p> <p><b>b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><b>Paid Leave</b></p> <p>The ETS requires employers to provide at least four hours of paid sick leave during the workday for employees to get vaccinated. Employers must also provide a &ldquo;reasonable time and paid sick leave&rdquo; to recover from the side effects of the vaccine for each dose.&nbsp;OSHA estimates the time to recover from vaccine side effects may range from zero to 1.8 days, on average. Employers may require their employees to use banked sick time, but cannot require employees to go into the negative on sick time or use vacation or other banked PTO.</p> <p>Absent a collective bargaining agreement, company policy, or state or local law to the contrary, nothing in the ETS requires employers to provide paid leave to employees who miss work due to being diagnosed with COVID-19.</p> <p><b>Testing Requirement</b></p> <p>Any employee who is not &ldquo;fully vaccinated,&rdquo; including those who decline vaccination or are exempt for medical or religious reasons, are subject to the ETS testing requirement.&nbsp;These employees must provide a negative COVID-19 test every seven days before they may enter the employer&rsquo;s facility.&nbsp;The ETS requires that tests cannot be both self-administered and self-read by the employee.&nbsp;That is, an employee may not purchase an over-the-counter COVID-19 test, perform it on herself, and then provide the results to the employer.&nbsp;An employee may provide a result from a third party (such as a drive thru or community-testing clinic) including a health care provider.&nbsp;Alternatively, the employer may conduct an approved OTC COVID-19 test on-site prior to entry.&nbsp;An approved OTC rapid test kit may be used if a manager observes the employee open the approved kit, perform the test (usually a nasal swab), and the manager observes the results.&nbsp;Employees who do not provide proof of a negative test must be kept off the premises until a negative test is provided.</p> <p>Employees who do not report to a physical workplace at least once every seven days do not need to be tested, but they must provide a negative COVID-19 test before entering the workplace.&nbsp;The test result must be within the previous seven days.</p> <p>Employers are not required to pay for any costs associated with testing, subject to a policy, collective bargaining agreement, or other law.&nbsp;However, some states mandate that employers not pass on costs for medical requirements on to employees.&nbsp;In addition, the ETS has sparked debate about whether insurance companies will cover the cost of employer-mandated testing because the Families First Coronavirus Response Act requires health plans to pay for COVID-19 testing that is deemed &ldquo;medically necessary.&rdquo;&nbsp;Thus, insurance companies will likely consider ETS testing to be a &ldquo;screening&rdquo; that is not medically necessary and thereby avoid covering the cost for the ETS tests.&nbsp;&nbsp; As a result, it is critical that employers and all non-fully-vaccinated employees understand whether an employee&rsquo;s workplace is covered by a state law that forbids an employer from passing on this cost.&nbsp;Employers should also identify locations of low or no-cost COVID-19 testing sites, to ascertain how much out-of-pocket cost may be imposed on the employee.</p> <p><b>Face Covering Requirement</b></p> <p>While the vaccine or testing requirements have dominated the ETS headlines, the ETS also includes a face covering requirement which goes into effect on December 5, 2021.&nbsp;All non-fully-vaccinated employees must wear a face covering while indoors or in a vehicle, except: when the employee is alone in a room with floor to ceiling walls and a closed door; for a limited time while eating or drinking or for security checks; while wearing a respirator or other face mask (such as surgical mask); or when wearing a mask is infeasible or creates a greater hazard than wearing a mask.</p> <p>Under the ETS, face coverings must include at least two layers of fabric, wrap around the ears or head with elastic, and fit snugly around the nose and mouth.&nbsp;Gaiters are not excluded by the ETS, but they must have at least two layers of fabric, fit snugly, and have no large gaps on the sides. The ETS neither requires nor prohibits an employer from paying for face coverings.</p> <p><b>Recordkeeping Requirement</b></p> <p>Employers must maintain a record of each employee&rsquo;s vaccination status, a copy of each employee&rsquo;s proof of vaccination, and/or copies of unvaccinated employees&rsquo; COVID-19 test results for the duration of the ETS.&nbsp;These records must be kept separate from personnel files and be treated as confidential medical records.&nbsp;The employer must also maintain a separate roster of all employee vaccination statuses.</p> <p>While employers are not required to conduct investigations or take steps to verify medical information, any employer who knowingly accepts false medical information is subject to civil or criminal penalties under OSHA&rsquo;s recordkeeping rules.</p> <p><b>Enforcement</b></p> <p>Generally, OSHA enforces its standards by assessing penalties.&nbsp;While states may operate their own Occupational Safety and Health Plans, those states are required to adopt maximum penalty levels that are at least as effective as the penalty levels of the Federal OSHA.&nbsp;OSHA&rsquo;s maximum penalty amounts are:</p> <div align="center"><br /> <table border="1" cellspacing="0" cellpadding="0"> <tbody> <tr> <td valign="top"> <p><b>Type of Violation</b></p> </td> <td valign="top"> <p><b>Penalty</b></p> </td> </tr> <tr> <td> <p>Serious</p> <p>Other-Than-Serious</p> <p>Posting Requirements</p> </td> <td> <p>$13,653 per violation</p> </td> </tr> <tr> <td> <p>Failure to Abate</p> </td> <td> <p><br /> $13,653 per day beyond the abatement date</p> </td> </tr> <tr> <td> <p>Willful or Repeated</p> </td> <td> <p>$136,532 per violation</p> </td> </tr> </tbody> </table> </div> <p><br /> While there are pending efforts, including proposed legislation in some states, to increase the penalty maximums by more than 15%, even the current penalty levels will likely deter employers from attempts to sidestep the ETS, in light of the sheer volume of potential penalty exposure based on the number of non-fully-vaccinated employees who may be considered separate and repeated violations at any given company.&nbsp;As a practical matter, however, OSHA may lack the capacity to aggressively enforce the ETS given that the standard is expected to apply to more than 100,000 companies.&nbsp;Thus, OSHA will likely conserve its resources to enforce ETS-related penalties on larger, big-name, companies that may serve as cautionary tales in the news.</p> <p><b>Final Takeaways </b></p> <p>Time is of the essence. Employers and practitioners should take the following steps <i>now,</i> to ensure ETS compliance:</p> <p>►provide employees with ample notice of the face covering mandate which goes into effect on December 5, 2021, and the January 4, 2022, vaccination deadline.&nbsp;Remember, employees who are not two weeks past their final vaccine dose are not &ldquo;fully vaccinated&rdquo; and are subject to weekly testing after January 4, 2022.&nbsp;<b>For recipients of the Moderna and Pfizer vaccines, this means the first dose should be administered by November 23, 2021, to avoid any weekly testing;</b></p> <p>►determine what will be included and administered as part of the employer&rsquo;s testing program, which should be included in the employer&rsquo;s written policy.&nbsp;When developing its testing program policy, an employer should consider whether testing will be provided at the employer&rsquo;s premises, whether employees will be required to independently schedule tests, and whether employees may bring an OTC test with them to be administered at work;</p> <p>►prepare a written policy that requires either vaccination or a weekly testing option, and distribute the policy to employees;</p> <p>►determine how employees will be required to provide proof of vaccination or negative tests (e.g., an online portal, submit to HR or a specific manager, via e-mail);</p> <p>►collect vaccination records from fully and partially vaccinated employees;</p> <p>►consult with local health officials, hospitals, or clinics about hosting on-site vaccination events or conducting on-site COVID-19 testing; and</p> <p>►prepare for receiving and processing religious and medical exemption requests and train front-line managers on how to identify and handle such requests. Exemption requests should be treated as requests for reasonable accommodation under Title VII or the Americans with Disabilities Act. The EEOC advises that an employer may deny a request for religious accommodation where the sincerity of the employees&rsquo; belief is questionable, as indicated by inconsistent past conduct, timing of the request or other factors. Employers considering denying religious requests must exercise extreme caution.</p> <p>The ETS may be modified after the notice-and-comment period, or by legal challenge.&nbsp;Baker Sterchi attorneys will continue to monitor these developments, and will update this blog on a revolving basis with the most up-to-date information available.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Job Seekers Using Vaccine Mandates to Stand Out from the Crowd: Potential Pitfalls for Employershttps://www.bscr-law.com/?t=40&an=119423&format=xml&p=5258&stylesheet=blog04 Nov 2021Employment & Labor Law Blog<p>Whether due to a government mandate or a self-imposed work rule, every day more employers are requiring employees to be vaccinated against Covid-19.</p> <p>Employers are eager to attract vaccinated employees to open positions. Employers have analyzed the costs they may save by hiring vaccinated workers. Vaccinated employees are less likely to contract Covid-19 or suffer serious health consequences from the virus, and they are therefore less likely to miss time from work. Employers will also save time and administrative costs associated with processing accommodation requests, paying for testing, or providing time off to employees awaiting tests or vaccines. Employers with government contracts are already required to ensure their workers are vaccinated. For employers with 100 or more employees, new OSHA rules will require their entire work force to be vaccinated against Covid-19 as well, by January 4th. (Alternatively, an employee may undergo weekly COVID testing.)</p> <p>Between now and then, vaccinated employees will be in high demand. Some job applicants, sensing employers&rsquo; eagerness for vaccinated employees, have begun including their vaccine status on resumes, job applications, and social media in order to stand out from the crowd. However, regardless of how attractive vaccinated employees may be, consideration of a job applicant&rsquo;s vaccine status in hiring decisions may create pitfalls for employers.</p> <p>Before trying to cut through the red tape of employee vaccinations, employers should be aware that federal and state vaccine mandates require employers to carefully evaluate employee requests for medical or religious accommodations. When an applicant <i>does not</i> list his vaccine status, an employer cannot and should not try to guess why that is. It may be that the applicant has a disability or religious belief that prevents him from being vaccinated. Consideration of vaccine status in hiring decisions may run afoul of the Americans with Disabilities Act or religious protections under Title VII.</p> <p><b>Disability Exemptions</b></p> <p>The Americans with Disabilities Act prohibits discrimination against a qualified individual on the basis of disability, including &ldquo;using qualification standards, employment tests or other selection criteria that screen out or tend to screen out an individual with a disability or a class of individuals with disabilities unless the standard, test or other selection criteria, as used by the covered entity, is shown to be job-related for the position in question and is consistent with business necessity.&rdquo; 42 U.S.C. &sect; 12112(b).</p> <p>Persons with certain disabilities may not be able to be vaccinated. Thus, they would tend to be screened out or disfavored when employers consider vaccine status in hiring decisions. For example, two job applicants are considered for a position. One lists her vaccine status on her resume and the other does not. The hiring manager may want to hire the vaccinated worker because he does not want to run the risk of the &ldquo;headache&rdquo; of dealing with weekly testing or other accommodation. But if the applicant has not been vaccinated due to a disability, she may have a claim for disparate treatment.</p> <p>Furthermore, disparate impact claims are also cognizable under the ADA. To state a claim, a plaintiff must show a &ldquo;facially-neutral&rdquo; policy or practice, a statistically significant disparity, and a causal connection. Consideration of applicants&rsquo; vaccine status probably does not facially discriminate against people with disabilities. However, giving a preference to people who have included their vaccine status could cause people with disabilities that prevent vaccination to be disfavored in the hiring process. If qualified individuals with a disability apply and are rejected at statistically significant rates because of consideration of vaccine status, they may be able to state a claim that the hiring process violates the ADA.</p> <p>The ADA also contains specific provisions for when employers may inquire about medical information. Generally, medical information should not be obtained by the employer until after a conditional job offer is made. Then medical information may be obtained 1) to begin the reasonable accommodation interactive process; or 2) when medical information is obtained from all applicants. Therefore, employers should avoid obtaining or receiving medical information from applicants until <i>after</i> a conditional offer is made.&nbsp;</p> <p><b>Religious Exemptions</b></p> <p>Government vaccine mandates also require accommodation of people whose sincerely held religious beliefs prevent vaccination. Title VII recognizes both disparate treatment and disparate impact claims. The EEOC has tended to interpret &ldquo;sincerely held religious beliefs&rdquo; broadly. Courts have become increasingly willing to evaluate whether a religious belief is sincerely held. However, for employers this is a minefield and should generally be avoided. Inquiries into whether a belief is &ldquo;sincerely held&rdquo; often devolve into claims of harassment.</p> <p><b>Accommodations</b></p> <p>An individual who has not been vaccinated, but is otherwise qualified for the position, can often be reasonably accommodated under the ADA or Title VII. Experience over the last two years has shown that unvaccinated employees can be reasonably accommodated. Reasonable accommodations may include weekly testing (as in the newly issued OSHA ETS), mask requirements, social distancing, installing plexiglass barriers, modified work schedules, or remote work.</p> <p><b>Best Practices</b></p> <p>Under the new OSHA standard and prior federal mandates for government contractors, by early 2022 most employees will be required to be vaccinated or submit weekly negative Covid-19 tests. But this does not relieve employers of the duty to accommodate disabilities or religious beliefs.</p> <p>In order to avoid discrimination claims, employers should:</p> <ul type="disc"> <li>Include in job postings whether compliance with the OSHA ETS or other federal or state mandate is a job requirement, subject to applicable legal exemptions.</li> <li>Include in job postings that applicants should not include their vaccination status on resumes or job applications and that vaccination status will not be considered in hiring decisions.</li> <li>A blind application process &ndash; where photographs, demographic, and other personal data is redacted &ndash; is often the best way to remove bias from hiring decisions. If an employee offers vaccination information, it should be redacted.</li> <li>Wait until after a conditional offer is made to inquire into accommodations for disabilities or religious beliefs.</li> <li>Always store medical information in a separate file and treat it as confidential.</li> </ul>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10I Didn't Agree to That! Court Holds No Arbitration without Offer and Acceptance.https://www.bscr-law.com/?t=40&an=119219&format=xml&p=5258&stylesheet=blog19 Oct 2021Employment & Labor Law Blog<p>The Missouri Court of Appeals recently affirmed a trial court&rsquo;s holding that a mere &ldquo;Acknowledgement of Receipt,&rdquo; attached to an Alternative Dispute Resolution Policy given to the employee upon hire, does not constitute an &ldquo;offer&rdquo; that can bind the employee to arbitrate future employment claims.</p> <p>In <i>Trunnel v. Missouri Higher Education Loan Authority</i>, the Court of Appeals <a href="https://protect-us.mimecast.com/s/rzvrClYppEHV5DrT9Me0X?domain=courts.mo.gov">reasoned</a> that MOHELA&rsquo;s ADR Policy did not create an agreement to arbitrate because MOHELA never extended an offer to be bound by the arbitration process that could be accepted by the employee. When MOHELA hired Trunnel, Trunnel was given two documents, one titled &ldquo;MOHELA Policy Regarding Mandatory Alternative Dispute Resolution/ADR Process&rdquo; (&ldquo;ADR Policy&rdquo;) and the other a one-page document titled &ldquo;Important Acknowledgement of Receipt of MOHELA Mandatory Policy on Dispute Resolution/ADR Process&rdquo;). Trunnel purportedly signed the Acknowledgment of Receipt, but not the ADR Process document itself.</p> <p>In pertinent part, the &ldquo;Acknowledgment of Receipt&rdquo; stated that employees &ldquo;are bound by this Policy even if they do not sign this Acknowledgement form.&rdquo; At the bottom of the form, the signature line states &ldquo;I ACKNOWLEDGE RECEIPT OF THE MANDATORY ALTERNATIVE DISPUTE RESOLUTION/ADR PROCESS POLICY.&rdquo; Trunnel subsequently sued for constructive discharge based on race, sex, and disability and retaliation. MOHELA moved to compel arbitration.</p> <p>The trial court relied on <i>Jackson v. Higher Education Loan Authority of Missouri</i>, 497 S.W.3d 283 (Mo. App. E.D. 2016) to deny MOHELA&rsquo;s motion to compel arbitration. In <i>Jackson</i>, the district court examined the exact same policy at issue, and determined that the arbitration policy signed by employees of MOHELA did not constitute a valid offer that an employee could accept. Rather than presenting an offer that could be accepted or rejected, MOHELA merely published the policy to its employees and required a signature acknowledging receipt of the policy.</p> <p>Following the reasoning of <i>Jackson</i>, the trial court further found that Trunnel merely acknowledged receipt of the published ADR Policy, which was not an offer, and therefore she did not agree to be bound by the terms of the ADR Policy. MOHELA&rsquo;s one argument on appeal was that <i>Jackson </i>was wrongly decided. It argued that the Acknowledgment of Receipt document Trunnel signed contained clear language that a binding agreement was being offered.&nbsp; The Court of Appeals noted that it was persuaded by the <i>Jackson</i> decision and concluded the ADR Policy and Acknowledgement of Receipt documents were merely a publication to employee, as there was no consequence for the failure to sign and nothing was presented to the employee for her acceptance. Further, while not dispositive, prominent use of the word &ldquo;policy&rdquo; was but one factor relied on by the <i>Jackson </i>Court to reach their conclusion, and in <i>Trunnel</i> MOHELA&rsquo;s use of the word &ldquo;policy&rdquo; in lieu of &ldquo;agreement&rdquo; or &ldquo;contract&rdquo; again undermined its arguments that it constituted a contract.</p> <p>Additionally, the Acknowledgement of Receipt form contained no explicit language manifesting an employee&rsquo;s understanding that they were entering into, and bound by, the ADR Policy. The acknowledgment form simply required the employee to confirm they received a copy of the process itself, not that they assented to the terms therein. The Court discussed the Eighth Circuit case <i>Shockley v. PrimeLending</i> (analyzed in our 2019 Blog post: <a href="https://www.bscr-law.com/?t=40&amp;an=96663&amp;format=xml&amp;stylesheet=blog&amp;p=5258">Arbitration Agreements 101: they require - you guessed it - agreement.</a>), and found that &ldquo;an acknowledgement of a review of offered terms alone does not evince an intent to accept those terms.&rdquo;</p> <p>Finally, MOHELA attempted to assert that an offer and acceptance existed with an affidavit from MOHELA&rsquo;s Assistant Director of Human Resources, stating that Trunnel&rsquo;s employment was contingent on signing the Acknowledgement. But the Court afforded little weight to the Affidavit, which contradicted the plain language of the Acknowledgement of Receipt, reasoning that if a signature on the Acknowledgement of Receipt was a condition of employment, there was no need to advise employees that their failure to sign would have no bearing on the applicability of the ADR process.</p> <p>The decision in <i>Trunnel </i>provides important guidance to employers drafting Arbitration Agreements. First, the employee&rsquo;s signature page must clearly state the employee&rsquo;s intention to be bound by the terms of the <i>actual agreement</i> they are signing, rather than just acknowledging receipt of a company policy.</p> <p>Second, employee handbooks generally do not create contractual rights. Arbitration agreements should be executed separately from employee handbooks, lest an employer unwarily create contractual rights it did not intend. Acknowledgement of receipt on an employee handbook will almost never be sufficient to bind an employee to an arbitration provision contained therein.</p> <p>Third, while the Courts have regularly discussed adequate consideration in arbitration agreements (<i>See </i><a href="https://www.bscr-law.com/?t=40&amp;an=116879&amp;format=xml&amp;stylesheet=blog&amp;p=5258">Promises, Promises in Arbitration of Employment Disputes </a>&nbsp;and&nbsp; <a href="https://www.bscr-law.com/?t=40&amp;an=114268&amp;format=xml&amp;stylesheet=blog&amp;p=5258">Missouri Court of Appeals holds an employer may not reserve the right to litigate claims against an employee in court while simultaneously restricting the employee to arbitrate her employment claims.</a>), employers must remember that an arbitration agreement has to contain <b><i>each </i></b>element of a contract including an offer, acceptance, a meeting of the minds, and consideration.&nbsp;</p> <p>Fourth, the Agreement must make it clear to the employee that the employment relationship (or continuation of employment) is contingent upon signing the Agreement. In addition to not constituting an offer or acceptance, a promise is also illusory where signing or not signing the document is of no legal effect.</p> <p>To avoid the pitfalls MOHELA encountered in <i>Jackson</i> and <i>Trunnel</i>, ensure that the signature page and all related documents clearly indicate that the employee agrees to be bound by the provisions of the arbitration agreement. As always, employers who may be considering modifying their arbitration agreements should pay close attention to recent cases discussing the limits of an employer&rsquo;s right to do so. (<i>See </i><a href="https://www.bscr-law.com/?t=40&amp;an=42007&amp;format=xml&amp;stylesheet=blog&amp;p=5258">The Eastern District of Missouri continues the trend of invalidating employee-employer arbitration agreements</a>).</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Returning to Work Post-COVID – Handle with Care, Employershttps://www.bscr-law.com/?t=40&an=118795&format=xml&p=5258&stylesheet=blog14 Sep 2021Employment & Labor Law Blog<p>COVID-19 created unprecedented situations in every type of job, industry, and profession, including the legal field.&nbsp; Change, evolution, and adaptation became commonplace as everyone learned how to navigate the process of operating from both work and home. Essentially, the COVID-19 pandemic turned our working lives upside down for the better part of two years.</p> <p>As more people become fully vaccinated, many are eagerly anticipating a return to &ldquo;normalcy.&rdquo;&nbsp; For most, that includes returning to the office (whether full-time, part-time, or by remote or virtual means). But more than 100 million Americans have worked remotely (at least part-time) since the beginning of the pandemic. And many of these employees hope to work remotely permanently. However, for employers intending for their employees to return to the office, potential pitfalls await.</p> <p>Employees who have learned to enjoy the work-from-home model see a variety of benefits, including:</p> <ol start="1" type="1"> <li>Not having to commute to work;</li> <li>No required dress code (unless you are on a video conferencing call, such as with a Court);</li> <li>The ability to take care of work/projects at home while on breaks from office work;</li> <li>The ability to stay home with a sick family member;</li> <li>The ability to more easily schedule personal appointments around work.&nbsp;</li> </ol> <p>But there are pitfalls to working from home, which include:</p> <ol start="1" type="1"> <li>Potentially having to purchase additional office equipment to effectively do work (e.g., printer/scanners, computer monitor);</li> <li>Taking extra precautions to keep client information safe and confidential;</li> <li>Blurring the lines between being present at work and being present at home;</li> <li>Losing some collaboration, communication, and visibility with your colleagues/team/management;</li> <li>More distractions at home to sidetrack you from getting your &ldquo;office&rdquo; work done.</li> </ol> <p>Recent studies indicate that some categories of employees are less eager than others to return to the office. One such survey [<a href="https://fivethirtyeight.com/features/why-post-pandemic-offices-could-be-whiter-and-more-male/">Who Wants To Return To The Office? | FiveThirtyEight</a>] indicates that women and minorities are less eager to return to in-person work, while white men are the group most eager to return to the office. In many families, women bear the load of being both the primary caregiver, as well as a full-time employee, and providing options to work from home provides potentially more time to devote to both. Another factor that may be at play is an office culture in some workplaces that has given white men a higher comfort level than other groups. Whether it&rsquo;s &ldquo;water cooler talk,&rdquo; &ldquo;the good ol&rsquo; boys club,&rdquo; or the standing Friday afternoon round of golf, certain employees can feel excluded and alienated in the workplace.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>Employers should take note, as return-to-work and remote work policies may someday serve as the basis for disparate impact claims under Title VII or Equal Pay Act claims. If women and minorities are more likely to opt to work from home (or risk termination or quit when return to the office is mandated), then employers must carefully implement policies or practices to avoid violating the law.&nbsp; These policies or practices should be implemented both to comply with the law, and to promote the well-being and job satisfaction of all of their employees.</p> <p><b>Disparate Impact under Title VII</b></p> <p>Disparate impact claims under Title VII can be tricky for employers to defend because there is no intent requirement. To state a claim of disparate impact, a plaintiff must allege a facially neutral policy that causes statistically significant disparities in employment between a favored class and a disfavored class. Here, women or minorities may be able state a claim for disparate impact where a remote work policy caused them to be disfavored.</p> <p>For example, a mandatory return to the office under threat of termination may cause a disparate impact if it causes women and minorities to quit in much higher numbers than white workers or men. The policy itself does not discriminate based on race or sex, so it is facially neutral. However, if it falls more harshly on a particular group, it may support a claim.</p> <p>Disparate impact claims are analyzed under a burden-shifting scheme similar to the familiar <i>McDonnell Douglass</i> framework. If the plaintiff makes a prima facie case, then the burden shifts to the employer to demonstrate that the policy serves a &ldquo;legitimate, non-discriminatory business purpose.&rdquo; Then the burden shifts back to the plaintiff to show that the articulated reason is pretextual.</p> <p>Some employers may have difficulty proving a legitimate business justification for ordering employees to return to the office. Many employers have seen that productivity has remained steady or in some cases increased as more employees work from home. In some cases, it may be more expensive for employers to have workers in the office than working remotely. Therefore, employers seeking company-wide return to work should carefully consider the reasons for doing so.</p> <p><b>Minimizing Impacts on Remote Workers</b></p> <p>A major potential pitfall will be in promotions. Employers <i>must</i> be mindful of the subjective and objective criteria managers employ in determining promotions. Traditional factors such as &ldquo;face time&rdquo; with the boss, being seen in the office early in the morning and late at night, or overall &ldquo;attitude,&rdquo; &ldquo;personality,&rdquo; or &ldquo;fit,&rdquo; may disfavor remote workers. Where these factors would tend to disfavor remote workers, they may work to cause statistical disparities between male and female or white and minority workers.</p> <p><b>Equal Pay Act</b></p> <p>The Equal Pay Act requires that employees of opposite sexes be paid the same for &ldquo;equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.&rdquo;). In the absence of direct evidence of discriminatory intent, the court applies the familiar <i>McDonnell Douglas</i> burden-shifting framework. The plaintiff puts forth a prima facie case, and the employer must show that there exists a legitimate nondiscriminatory factor on which it based the wages paid. Legitimate factors include seniority systems, merit systems, piecework pay rates, for example. The burden then shifts back to the plaintiff to come forward with evidence that the proffered reason was pretextual.</p> <p>Some employers may feel inclined to pay remote workers less than in-office workers. And studies indicate that some workers would be willing to take a pay cut to work from home. However, if disproportionate numbers of women intend to continue working remotely, then pay differentials could potentially support an Equal Pay Act claim. It is not a complete defense that there are also some men who work remotely at lower salaries. Likewise, it is an open question whether working from home versus working in the office would be a legitimate nondiscriminatory factor supporting pay disparities. However, if an employer saves money by having employees work remotely, it will be hard to avail themselves of that defense.</p> <p><b>Planning and Recordkeeping Can Help Avoid Liability</b></p> <p>In crafting a return-to-work policy that works for everyone, for purposes of potential employment-related claims, employers should consider:</p> <ul> <li>Whether an across-the-board return to work policy is necessary or desirable.</li> <li>If individual approval of remote work is practical. A policy should be based on specific, objective (and recorded) criteria such as seniority, performance evaluations, disciplinary history, and productivity. A copy of the determination should be placed in the employee&rsquo;s file.</li> <li>Whether to re-evaluate promotion and job performance criteria, to focus on objective work-related factors, while weeding out unintentionally discriminatory factors (such as face time with the boss, early arrival at work, etc.).</li> <li>Whether remote work may be a reasonable accommodation for disabled workers.</li> <li>How to ensure that remote workers have equal access to career-advancing training, mentorship, and special projects.</li> </ul> <p>There is never a bad time to consider whether office culture can be made more inclusive. As more people return to the office, it is important to ask whether there are employees who are reluctant to return, and why.&nbsp;</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10They're Baaaaccckkkk: New COVID-19 Guidelines for Your Vaxed and Vexed Employeeshttps://www.bscr-law.com/?t=40&an=118480&format=xml&p=5258&stylesheet=blog16 Aug 2021Employment & Labor Law Blog<p>In November 2020, many Americans breathed a sigh of relief, as news broke that an effective and safe vaccine had been developed against COVID-19. As vaccines from Pfizer, Moderna, and Johnson &amp; Johnson began to roll out in early 2021, numerous citizens began to roll up their sleeves for protection against the virus.&nbsp; In May 2021, many COVID-19 related restrictions were abandoned in the continental U.S. (including the dreaded indoor mask requirement) after the CDC advised that vaccinated individuals did not need to wear masks while indoors.</p> <p>Fast forward to August 2021, and the unwelcome spread of the highly contagious Delta variant, and we seem to be creeping back to mandatory mask wearing in many states, as the CDC recently recommended that fully vaccinated individuals wear masks in public indoor settings in areas of &ldquo;substantial or high transmission.&rdquo;&nbsp; This recommendation comes as no surprise with the Delta variant on the rise, coupled with the fact that vaccinated individuals can still become sick from the virus, as well as transmit the virus.</p> <p>So what is an employer to do with these new CDC guidelines?&nbsp; While the new guidelines do not define &ldquo;public indoor settings,&rdquo; such settings were previously differentiated by the CDC from household settings.&nbsp; Hence, it is safe to say these new guidelines apply to businesses outside of individuals&rsquo; homes.&nbsp; Because it is assumed that these guidelines pertain to companies, employers and businesses should consult with the CDC&rsquo;s COVID-19 Integrated County View website (covid.cdc.gov/covid-data-tracker/#county-view) to determine if the areas in which they do business are COVID-19 hotspots with substantial or high transmission.&nbsp; This website is updated by the CDC daily, reflecting locations that have substantial transmission or high transmission over a 7-day period.</p> While CDC guidelines are not considered &ldquo;law,&rdquo; OSHA and the courts could interpret CDC guidelines to be a standard of care.&nbsp; Accordingly, in the event an employer does not abide by the new CDC guidelines, OSHA could cite an employer for not abiding by the guidelines, on the grounds that the employer breached the OSHA &ldquo;general duty clause.&rdquo;&nbsp; In addition, individuals who contract the virus while visiting non-CDC abiding businesses may sue, claiming that the business was negligent by not abiding by the respective restrictions.&nbsp; Although CDC guidelines are just that &ndash; guidelines &ndash; employers and businesses should therefore heed the CDC&rsquo;s guidance&hellip; to the possible dismay of your some of your vaxed and vexed employees.&nbsp;&nbsp;https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Are Non-Competes Doomed after Executive Order 14306?https://www.bscr-law.com/?t=40&an=118353&format=xml&p=5258&stylesheet=blog05 Aug 2021Employment & Labor Law Blog<p>On July 9, 2021, President Biden signed <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/">Executive Order 14306</a>. The EO has inspired headlines warning that non-compete agreements as we know them are doomed. These prognoses are premature. The EO itself does not affect non-compete agreements in employment, but merely recommends that the Federal Trade Commission begin the rulemaking process with the principles of the EO in mind.</p> <p>Section 5(g) instructs that &ldquo;To address agreements that may unduly limit workers&rsquo; ability to change jobs, the Chair of the FTC is encouraged to consider working with the rest of the Commission to exercise the FTC&rsquo;s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.&rdquo;</p> <p>The overall tenor of the EO is that the consolidation of large corporations unfairly restricts competition. To date, the enforceability of non-compete clauses has been almost entirely governed by state law, and state laws dramatically vary on this subject. For example, California law is rather hostile to these provisions, while the laws of Missouri, Illinois, and Kansas are more in the mainstream, allowing restrictions that are appropriately limited in scope and duration.&nbsp; While we have no idea what the FTC&rsquo;s proposed regulation will look like, we can begin to guess by examining state laws on non-compete agreements generally.</p> <p><b>Missouri</b></p> <p>In Missouri, non-compete agreements are enforceable to the extent they protect a legitimate business interest, such as confidential information, trade secrets and customer contacts, and are reasonable in temporal and geographic scope. Importantly, customer contacts are protectable only as to those employees who actually interact with customers and can influence customers&rsquo; decisions. <i>Whelan Security Co. v. Kennebrew</i>, 379 S.W.3d 835 (Mo. banc 2012). A related restrictive covenant, the non-solicitation clause, which prevents employees from snatching up their former co-workers, is presumed enforceable for up to one year, where its purpose is to protect company loyalty, customer goodwill, and related interests. <i>See </i>Mo. Rev. Stat. &sect; 431.202. For more information on Missouri non-competes, see our blog posts&nbsp;<a href="https://www.bscr-law.com/?t=40&amp;an=16548&amp;format=xml&amp;stylesheet=blog&amp;p=5258">Non-Compete Agreements in Missouri: The Missouri Supreme Court (Once Again) Explains it All</a>&nbsp;from December 2012 and <a href="https://www.bscr-law.com/?t=40&amp;an=104551&amp;format=xml&amp;stylesheet=blog&amp;p=5258">Sometimes You Just Can't Compete</a>&nbsp;from April 2020.</p> <p><b>Illinois</b></p> <p>Illinois common law generally resembles Missouri with regard to non-competes. However, in Illinois, non-competes with &ldquo;low-wage employees,&rdquo; an employee who earns the greater of the federal, state, or local minimum wage or $13.00 per hour, are explicitly prohibited by statute. &ldquo;Illinois Freedom to Work Act,&rdquo; 820 ILCS 90/5.</p> <p><b>Kansas</b></p> <p>The landscape in Kansas is also similar to Missouri. In <i>Idbeis v. Wichita Surgical Specialist, P.A.</i>, 112 P.3d 81, 279 Kan. 755 (2005), the Supreme Court of Kansas established guidelines for enforcement that drafters of non-competes should note. In pertinent part, the Court held that non-competes are enforceable if they are not intended to avoid ordinary competition, do not create an undue burden on employees, and does not harm the public welfare.</p> <p><b>What about e-Commerce?</b></p> <p>In the Internet Age, geographic restrictions on non-competes sometimes seem irrelevant. A company headquartered in Kansas City, Missouri, may have a sales representative located in Juneau, Alaska, selling products to customers in Key West, Florida. A geographic prohibition of a 50-mile radius does not make sense. Can&rsquo;t a company just prohibit its employees from going to work for a competitor?</p> <p>These types of non-compete agreements, where a company identifies competitors and seeks to prohibit employees from switching teams, are likely to be an area of focus in the FTC regulations. Particularly in the post-pandemic Big Tech world, where remote work is becoming the norm, companies may seek to protect their employees from being raided by Silicon Valley with global non-competes. The tension is obvious: how will the FTC limit monopolistic raiding behavior by the Googles and Facebooks of the world and protect employees&rsquo; freedom of movement?</p> <p>Employers and practitioners would do well to examine <i>Sigma-Aldrich v. VIkin</i>, 451 S.W.3d 767 (Mo. App. E.D. 2014). There, the Court held invalid a global non-compete that would have forbidden an employee to</p> <p>&ldquo;engage in, provide any services or advice to, contribute my knowledge to or invest in any business that is engaged in any work or activity that involves a product, process, service or development which is then competitive with, the same as or similar to a product, process, service or development on which I worked or with respect to which I had access to Confidential Information while with the Company anywhere the Company markets or sells any such product or service.&rdquo;</p> <p>The Court held that this broad prohibition sought to protect itself from regular competition. For more on <i>Sigma-Aldrich</i>, see our blog post <a href="https://www.bscr-law.com/?t=40&amp;an=34761&amp;format=xml&amp;stylesheet=blog&amp;p=5258">Court of Appeals Affirms Denial of Sigma-Aldrich's Request for Injunctive Relief Against Former Employee</a>. The Court instructed employers to evaluate the employee&rsquo;s specific duties, use of trade secrets in their work, and then identify the protectable interest at stake, then to narrowly tailor the non-compete to protection of those interests. As always, a one-size-fits-all approach to non-competes simply does not work.</p> <p><b>FTC&rsquo;s Rulemaking Authority</b></p> <p>Generally, a properly promulgated agency rule will preempt conflicting state laws on the same subject matter. But as an administrative agency, the scope of the rule is strictly confined to the agency&rsquo;s statutory authority. The FTC can only issue a rule &ldquo;where it has reason to believe that the unfair or deceptive acts or practice which are the subject of the proposed rulemaking are prevalent [&hellip;],&rdquo; that is &ldquo;information available to the Commission indicates a widespread pattern of unfair or deceptive acts or practices.&rdquo; 15 U.S.C.A. &sect;15a(b)(1)-(3).</p> <p>When can we expect this new rule to go into effect? Section 18(a) of the Federal Trade Commission Act includes rulemaking procedures that exceed those of the Administrative Procedures Act. The FTC is required to publish an Advanced Notice of Proposed Rulemaking in the Federal Register with information about the rule&rsquo;s purpose and invite interested parties to comment. The FTC must also seek input from certain House and Senate committees. Then at least 30 days later, the FTC may issue a Notice of Proposed Rulemaking.&nbsp;</p> <p><b>Enforceability of Current Non-Competes After FTC Regulation</b></p> <p>The logic of the EO is somewhat circular, given the law of restrictive covenants in Kansas, Missouri, and Illinois. By law, the FTC only has authority to regulate where there is widespread unfairness. Restrictive covenants are only enforceable to the extent they are reasonable and protect an employer&rsquo;s legitimate interest in protection from <i>unfair</i> competition. So in theory, a non-compete that is enforceable under Missouri, Illinois, or Kansas law should also be enforceable under the FTC regulations.</p> <p><b>Protecting Your Business Interests</b></p> <p>There is no reason for the EO to scare businesses into abandoning non-compete agreements. However, the EO is an important reminder that now is a good time for employers to re-evaluate their non-compete agreements. Are they targeted at a protectable interest, such as customer contacts, trade secrets, and goodwill? Importantly, the EO does not address trade secrets, and Missouri, Illinois, and Kansas have already enacted the Uniform Trade Secrets Act. Employers whose businesses are dependent on trade secrets and proprietary information should consider a trade secrets agreement separate from its non-compete agreement.</p> <p>&nbsp;</p> <p>Ultimately, we will not know what the FTC seeks to regulate until their proposed rule is published. Baker Sterchi Cowden &amp; Rice attorneys will be closely monitoring and reporting on developments in this blog.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Department of Labor Withdraws Employer-friendly FLSA Test for "Employee" Classificationhttps://www.bscr-law.com/?t=40&an=118334&format=xml&p=5258&stylesheet=blog03 Aug 2021Employment & Labor Law Blog<p>On May 6, 2021, the U.S. Department of Labor withdrew the new Trump-era Fair Labor Standards Act independent contractor rule, scheduled to take effect the next day.</p> <p>The rule, entitled &ldquo;Independent Contractor Status under the Fair Labor Standards Act&rdquo; (ICR), was a decided shift to a narrower definition of &ldquo;employee&rdquo; and thereby narrowed the scope of workers who may be entitled to FLSA protections.</p> <p>The FLSA was the first federal law to afford <i>employees</i> a right to a minimum wage and overtime pay, among other benefits.&nbsp; The condensed statutory definition of &ldquo;employee&rdquo; is any individual who is permitted to work by an employer.&nbsp; <i>See</i> 29 U.S.C. &sect; 203 (2019).&nbsp; As the Supreme Court interpreted the FLSA, it became clear that the sweepingly broad language of the Act&rsquo;s &ldquo;employee&rdquo; definition required that employers delineate between &ldquo;employees&rdquo; and &ldquo;independent contractors&rdquo; lest the FLSA be misinterpreted &ldquo;to stamp all persons as employees.&rdquo;&nbsp; <i>See Walling v. Portland Terminal Co.</i>, 330 U.S. 148, 152 (1947).&nbsp; Whether a worker is classified as an &ldquo;employee&rdquo; &ndash; and therefore is entitled to FLSA protections &ndash; or, alternatively, as an &ldquo;independent contractor&rdquo; has been a costly question steeped in debate ever since.&nbsp;&nbsp;</p> <p>Evolving common law and DOL guidance, via Wage and Hour Division opinion letters, are the tools employers have to decipher who is and who is not an &ldquo;employee&rdquo; for purposes of meeting FLSA standards.&nbsp; Employers are often motivated to classify workers as &ldquo;independent contractors&rdquo; to avoid the need to meet FLSA requirements for minimum wages and overtime pay, for example.&nbsp; For the same reasons, workers often prefer to be classified as &ldquo;employees.&rdquo;&nbsp; Which begs the question, why is a worker&rsquo;s classification up for debate?&nbsp; The answer is because every analysis that common law or the DOL provide amounts to a non-exhaustive list of factors, each bearing indeterminate and malleable weight that exposes the factors to legitimate disputes.&nbsp; The Supreme Court and federal courts of appeals are clear, however, on one point: no single factor is dispositive of a conclusion for or against a classification of &ldquo;employee,&rdquo; and a totality of the circumstances must be considered.&nbsp;</p> <p>Over the years, the most commonly applied multifactorial test has been the Economic Reality Test (ERT), a version of which is published by the DOL on the FLSA Fact Sheet (left column below).&nbsp; The would-have-been new test, ICR, modified the ERT (middle and right columns below).</p> <p>Both tests were designed to pinpoint workers who are economically dependent on a potential employer for work.&nbsp; However, unlike the ERT, the ICR would have mandated that two &ldquo;core&rdquo; factors &ndash; nature and degree of control, and worker&rsquo;s opportunity for profit or loss &ndash; take priority, without analysis of the other factors or the totality of the circumstances.&nbsp; By doing so, the ICR necessarily would have narrowed the scope of workers who may have been deemed &ldquo;employees&rdquo; covered by the FLSA umbrella.&nbsp;<br /> &nbsp;</p> <div align="center"> <table border="1" cellspacing="0" cellpadding="0"> <tbody> <tr> <td width="216" valign="top"> <p align="center"><b>Economic Reality Test </b></p> <p align="center"><b>(DOL&rsquo;s FLSA Fact Sheet)</b></p> </td> <td width="407" colspan="2" valign="top"> <p align="center"><strong>Independent Contractor Rule </strong></p> <p align="center"><strong>(not implemented)</strong></p> </td> </tr> <tr> <td width="216" valign="top"> <p>a. The employer&rsquo;s versus the individual&rsquo;s degree of control over the work;</p> </td> <td width="187" rowspan="2" valign="top"> <p><b>Core Factors&nbsp;</b>&rarr;</p> <p>&nbsp;If both core factors point towards the same classification (employee or independent contractor) there is a substantial likelihood that that classification is appropriate and generally no further analysis is required.</p> </td> <td width="220" valign="top"> <p>1. The nature and degree of the worker&rsquo;s control over the work; and</p> </td> </tr> <tr> <td width="216" valign="top"> <p>b. The individual&rsquo;s opportunity for profit or loss;</p> </td> <td width="220" valign="top"> <p>2. The worker&rsquo;s opportunity for profit or loss based on initiative and/or investment.</p> </td> </tr> <tr> <td width="216" valign="top"> <p>c. The individual&rsquo;s investment in facilities and equipment;</p> </td> <td width="187" valign="top">&nbsp;</td> <td width="220" valign="top">&nbsp;</td> </tr> <tr> <td width="216" valign="top"> <p>d. &nbsp;The permanency of the relationship between the parties;</p> </td> <td width="187" rowspan="3" valign="top"> <p><b>Tie Breaker Factors&nbsp;</b>&rarr;</p> <p>If the Core Factors do not point towards the same classification, these three other factors may serve as &ldquo;additional guideposts&rdquo; in the analysis.</p> </td> <td width="220" valign="top"> <p>a. The degree of permanence of the working relationship between the individual and the potential employer;</p> </td> </tr> <tr> <td width="216" valign="top"> <p>e. The skill or expertise required by the individual;</p> </td> <td width="220" valign="top"> <p>b. The amount of skill required for the work; and</p> </td> </tr> <tr> <td width="216" valign="top"> <p>f. Whether the work is &ldquo;part of an integrated unit of production&rdquo;; and</p> </td> <td width="220" valign="top"> <p>c. Whether the work is &ldquo;part of an integrated unit of production.&rdquo;</p> </td> </tr> <tr> <td width="216" valign="top"> <p>g. The degree of independent business organization and operation.</p> </td> <td width="187" valign="top">&nbsp;</td> <td width="220" valign="top">&nbsp;</td> </tr> </tbody> </table> <br /> <div style="text-align: left;"><br /> The ICR was considered a win for employers, but because the DOL withdrew the rule before it took effect and has since published an <a href="https://www.dol.gov/agencies/whd/flsa/2021-independent-contractor">excoriating explanation of the withdrawal</a> &ndash; that the ICR &ldquo;was inconsistent with the FLSA&rsquo;s text and purpose, and would have had a confusing and disruptive effect on workers and businesses alike due to its departure from longstanding judicial precedent,&rdquo; &ndash; it is highly unlikely that the ICR can be resurrected under the current Administration.</div> </div> <p>While advocates of ICR touted that the rule could provide more certainty and predictability for employers and workers alike, the totality of the circumstances approach of the ERT will remain the federal standard, applying multiple factors to any determination of employee versus independent contractor status.&nbsp;</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10EEOC Issues New Guidance for Employers on COVID-19 Vaccinations in the Workplacehttps://www.bscr-law.com/?t=40&an=118035&format=xml&p=5258&stylesheet=blog22 Jul 2021Employment & Labor Law Blog<p>On May 28, 2021, the U.S. Equal Employment Opportunity Commission (EEOC) issued new guidance seeking to clarify significant questions regarding mandating vaccines for employees, reasonable accommodation, and employee incentives for vaccination.</p> <p>In considering mandatory vaccination policies in the workplace, the EEOC advised employers to be mindful of whether certain employees may face greater barriers to obtaining vaccination, and to make sure that any mandatory vaccination program would not disparately affect any protected classes. The EEOC confirmed that an employer may require all employees physically entering the workplace to receive a COVID-19 vaccination, so long it continues to comply with reasonable accommodation obligations under the ADA and Title VII for employees seeking an exemption. Notably, the EEOC remains silent on an employer&rsquo;s ability to mandate vaccination of remote workers. Employers who implement a mandatory vaccination policy must ensure that the standard is job-related and consistent with &nbsp;business necessity.</p> <p>&nbsp;Reasonable accommodation may be required for an employee who declines vaccination due to a disability or sincerely held religious belief, unless doing so would pose an undue hardship on the operation of the employer&rsquo;s business or create a direct threat to the health of others. Employees who are not vaccinated because of pregnancy may also be entitled to adjustments (under Title VII) if the employer makes modifications or exceptions for other employees. These modifications may be the same as the accommodations made for an employee based on disability or religion. (Note, however, that the May 28th EEOC guidance says employers should be alert to and should follow any updated CDC guidance, <a href="https://www.cdc.gov/coronavirus/2019-ncov/vaccines/recommendations/pregnancy.html">and on June 29th, the CDC issued new guidance</a> that essentially encourages pregnant persons to be vaccinated, because they are at above-average risk for Covid-19 infection. While the new CDC guidance may not have the effect of reversing the EEOC&rsquo;s guidance on this point, it at least may muddy the waters.)</p> <p>The EEOC reminded employers that when determining if an employee poses a &ldquo;direct threat,&rdquo; the employer must make an individual assessment of the employee&rsquo;s ability to perform the essential functions of the job and rely on reasonable medical judgment regarding the most current medical knowledge about COVID-19, including factors such as current community spread. Further considerations of the employer&rsquo;s assessment of a &ldquo;direct threat&rdquo; may include: the proximity of the employee to co-workers; whether they work indoors or outdoors; available ventilation; direct interaction with others; how many nearby individuals are partially or fully vaccinated; and whether employees are wearing masks, social distancing, or undergoing routine testing. For employees receiving an exemption from a workplace mandatory vaccination program, employers may continue requiring the use of face coverings, social distancing, and periodic COVID-19 testing. Other examples of reasonable accommodations include: modified work shifts; telework; or a reassignment.</p> <p>The EEOC has further clarified that employers may use incentives to encourage employee vaccinations so long as the incentive is not tied to the employee receiving the vaccine from the employer itself, or any other entity with which the employer may have a contract. Employers may provide incentives upon proof of vaccination from a third party. Employers may not offer incentives to employees for vaccinations received by family members from the employer or its agent. Employers are not allowed to require employees to have family members become vaccinated and must not penalize employees if family members decide not to become vaccinated. While employers are allowed to require documentation or other confirmation of vaccination, the ADA requirements for confidentiality of employee medical information applies such documentation.</p> Though the EEOC has provided some guidance on these issues, many speculate there will be a variety of legal issues that may come up as employers begin to implement return-to-work policies and mandatory vaccination policies in the months to come.&nbsp;https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Do You Have a Record? From Conviction History to EEO-1 Reports, Illinois Imposes New Requirements on Employershttps://www.bscr-law.com/?t=40&an=116883&format=xml&p=5258&stylesheet=blog06 Jul 2021Employment & Labor Law Blog<p>Every year, it seems as though the Illinois legislature imposes more and more requirements on employers for the protection of employees, and 2021 is no exception. This spring, Governor J.B. Pritzker signed into law amendments to the Illinois Human Rights Act (IHRA), the Illinois Business Corporation Act, and the Illinois Equal Pay Act under Senate Bill 1480.&nbsp;The new law provides protections to individual with criminal convictions, and adds requirements on employers to report employee demographic and payroll information to the Illinois Secretary of State.</p> <p>As a refresher, the IHRA protects employees from discrimination and harassment on the basis of sex, race, color, national origin, religion, age, etc. in the workplace.&nbsp;Now, the IHRA protects employees (and potential employees) with criminal convictions.&nbsp;In essence, employers are now restricted from using an individual&rsquo;s criminal record to disqualify an individual from employment or act adversely against an individual with a criminal record unless: (1) there is a substantial relationship between the criminal offense and the employment position sought or held; or (2) an unreasonable safety risk to a person or property exists.&nbsp;The test to determine whether a &ldquo;substantial relationship&rdquo; exists requires the employer to consider &ldquo;whether the employment position offers an opportunity for the same or similar offense to occur&rdquo; or whether circumstances exist that would lead to similar conduct</p> <p>Factors that must be considered by the employer when determining if there is a &ldquo;substantial relationship&rdquo; or &ldquo;unreasonable safety risk&rdquo; include: (1) the amount of time that has passed since the conviction; (2) the number of convictions the individual has; (3) the nature and severity of the conviction in conjunction with the safety and security of others; (4) the facts and circumstances regarding the conviction; (5) the employee&rsquo;s age when convicted; and (6) evidence regarding the individual&rsquo;s rehabilitation efforts.&nbsp;</p> <p>If it is determined that a &ldquo;substantial relationship&rdquo; exists or there is an &ldquo;unreasonable safety risk,&rdquo; the employer may preliminary disqualify the individual from employment based on the conviction.&nbsp;If disqualified, the individual must receive written notice of the decision, which should include the conviction that disqualified the individual, the conviction history report obtained by the employer, and information for the individual to respond to the employer&rsquo;s position on disqualification.&nbsp;The employer must provide the individual with five business days to respond to the written notice.</p> <p>If the employer decides to stand on the disqualification after receiving the individual&rsquo;s response, the employer is required to do the following: (1) provide the individual with its final decision regarding the disqualification in writing; (2) state the conviction that led to the disqualification, including the reasoning behind the decision; (3) inform the individual of any other avenues the individual can take to challenge the employer&rsquo;s decision (if applicable); and (4) advise the individual of his or her right to file a charge of discrimination with the Illinois Department of Human Rights (IDHR).</p> <p>Not only does the new law amend the IHRA, but it also amends the Illinois Business Corporation Act.&nbsp;In essence, the amendment provides that corporations are required to provide substantially similar information that is contained in EEO-1 reports to the Illinois Secretary of State.&nbsp;This requirement is for those corporations that are required to submit an EEO-1 report with the EEOC.&nbsp;Corporations who are required to provide this information in annual reports must include this information beginning January 1, 2023.</p> <p>To ensure females and minorities receive compensation that is not consistently below the wages of white males, the new law amends the Illinois Equal Pay Act of 2003, which requires non-public employers with more than 100 employees to obtain an &ldquo;equal pay registration&rdquo; certificate from the Illinois Department of Labor (IDOL) on or before March 23, 2024.&nbsp;To obtain a certificate, employers need to provide an EEO-1 report to the IDOL, as well as proof of all wages paid to its employees over the prior year.&nbsp;Employers covered by this amendment are required to obtain a recertification every two years after its first submission.&nbsp;This amendment to the Equal Pay Act also provides protections to whistleblowers and the imposition of civil penalties against employers who do not comply with the certification requirements.</p> <p>Undoubtedly, these new amendments impose additional burdens on employers and subject employers to additional liability.&nbsp;Conformance with these new laws is critical to ensure that employers are not subject to penalties or liability under the IHRA and the Equal Pay Act.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Promises, Promises in Arbitration of Employment Disputeshttps://www.bscr-law.com/?t=40&an=116879&format=xml&p=5258&stylesheet=blog29 Jun 2021Employment & Labor Law Blog<p>Employers frequently adopt arbitration programs for resolving disputes with their employees. Arbitration is generally cost-effective and efficient compared with litigation in court. Benefits include reduced discovery costs, shorter time to resolution, and arbitrators willing to make compromise decisions, potentially reducing an employer&rsquo;s overall exposure. But there has also been a corresponding increase in arbitration-related litigation in recent years, and much of it relates to employers&rsquo; desire to retain the right to modify their arbitration programs.</p> <p>In <i>Harris v. Volt Mgmt. Corp.</i>, the Missouri Court of Appeals for the Eastern District reaffirmed that under Missouri law, an arbitration agreement that vests in one party the unfettered right to modify the arbitration program lacks consideration and will not be enforced. The Court affirmed a decision of the circuit court overruling an employer&rsquo;s motion to compel arbitration, finding that the arbitration agreement lacked consideration because Volt&rsquo;s promise to arbitrate disputes with its employees was illusory. Language in the arbitration agreement, which reserved for Volt the unfettered right to unilaterally modify the terms of the arbitration program, was not a promise at all. As a result, the circuit court would not compel the employee to arbitrate her claims, instead her lawsuit to proceed.</p> <p>As a matter of law, an arbitrator&rsquo;s jurisdiction over a dispute requires that a valid contract exists between the parties to refer their disputes to an arbitrator for resolution. Because an arbitration agreement is a contract, the essential elements of a valid contract &ndash; offer, acceptance, and consideration &ndash; must be present. In the employment context, arbitration agreements are generally bilateral. Consideration for the agreement is a mutual exchange of promises between the employer and the employee to arbitrate any disputes that arise from the employment relationship. In a bilateral agreement, mutuality requires that <b><i>both</i></b> the employer and employee agree to refer their disputes to arbitration.</p> <p>The circuit court generally has exclusive authority to decide whether a dispute is procedurally arbitrable, that is, whether a valid arbitration agreement exists. Challenges to the existence of a valid arbitration agreement may include an employee&rsquo;s claims to have never signed the agreement, duress, unconsionability, or any other challenges to contract formation. However, parties may agree to delegate this authority to the arbitrator, as long as the delegation is &ldquo;clear and unambiguous.&rdquo; This &ldquo;delegation&rdquo; clause is a separate agreement within the arbitration agreement, which must also be supported by consideration. Often, parties will incorporate by reference the rules of the American Arbitration Association (&ldquo;AAA&rdquo;) into the arbitration agreement. Section 6.a. of the AAA Employment Rules states that &ldquo;The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope or validity of the arbitration agreement.&rdquo; [<a href="https://www.adr.org/sites/default/files/EmploymentRules_Web_2.pdf">EmploymentRules_Web_2.pdf (adr.org)</a>]. Missouri courts have held that incorporation of this rule into an arbitration agreement can be a valid delegation.</p> <p>In <i>Harris</i>, an employee was terminated, allegedly in retaliation for her seeking orders of protection against her co-workers and for other illegal reasons. Harris subsequently filed a lawsuit asserting claims of wrongful termination, retaliation, and related claims. After the suit was filed, the defendants moved to compel arbitration, asserting that the parties had agreed to arbitrate any disputes arising from the employment relationship. The defendants also claimed that the parties had delegated arbitrability issues to the arbitrator.</p> <p>The arbitration agreement at issue was contained in an &ldquo;Employee Guide&rdquo; provided to all new employees at hiring. The Employee Guide provided employees with &ldquo;general information about Volt&rsquo;s rules, policies, plans, procedures and practices concerning the terms and conditions&rdquo; of their employment. The Employee Guide contained a section entitled &ldquo;Travel expense policy | Arbitration,&rdquo; which stated that &ldquo;[a]ny dispute, controversy or claim which arises out of, involves, affects or relates in any way to your employment&rdquo; must be referred to arbitration. The arbitration would be conducted &ldquo;in accordance with the applicable rules of the American Arbitration Association (AAA).&rdquo; The next page of the Employee Guide contained an &ldquo;Acknowledgement,&rdquo; which employees were required to sign, that contained the following crucial provision: &ldquo;Volt has the right to change, interpret or cancel any of its rules, policies, benefits, procedures or practices at Volt&rsquo;s discretion, upon reasonable notice where practicable. [&hellip;] Except as otherwise stated, I agree to arbitrate any and all disputes related to my employment or assignment(s) with Volt, as discussed in this Guide.&rdquo;</p> <p>The Court held that the employer retained the right to modify any part of the Employee Guide, including the arbitration agreement and the delegation clause. Because that provision purported to give the employer an &ldquo;unfettered right&rdquo; to unilaterally modify the arbitration provision at any time, Volt&rsquo;s promise to arbitrate was illusory. The Court echoed concerns from prior cases that an employer could sense that an arbitration case was going badly, revoke their arbitration agreement, and get a second bite at the apple in court.</p> <p>The Court also rejected Volt&rsquo;s argument that Harris did not separately attack the delegation clause. Generally, a party opposing arbitration must challenge the delegation clause and the arbitration agreement separately. Here, however, the Court permitted Harris to challenge both the delegation clause and the arbitration agreement together, as the challenge to both agreements were premised on the same argument; and Harris explained in her brief that the delegation clause lacked consideration for the same reason as the entire arbitration agreement.</p> <p><b><u>Takeaways</u></b></p> <ul> <li>Arbitration is a matter of contract. Missouri courts have long emphasized that employers should not treat an arbitration agreement as a policy to be unilaterally imposed on employees.</li> <li>When drafting arbitration agreements, employers should use care to ensure that modification rights apply only <i>prospectively</i>. The courts have recognized that &quot;limiting an employer's unilateral right to amend an&nbsp;arbitration&nbsp;agreement to amendments that [(1)] are prospective in application and [(2)] about which employees have been afforded reasonable advance notice may prevent an employer's mutual promise from being rendered illusory.&quot; <i>Patrick v. Altria Grp. Distribution Co.</i>, 570 S.W.3d 138, 144 (Mo. App. 2019).</li> </ul>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10