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Employment & Labor Law Blog Legal updates, news, and commentary from the attorneys of Baker Sterchi Cowden & Rice LLC

EEOC Issues New Guidance for Employers on COVID-19 Vaccinations in the Workplace

July 22, 2021 | Brandy Simpson

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.

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’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  business necessity.

 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’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, and on June 29th, the CDC issued new guidance 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’s guidance on this point, it at least may muddy the waters.)

The EEOC reminded employers that when determining if an employee poses a “direct threat,” the employer must make an individual assessment of the employee’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’s assessment of a “direct threat” 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.

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.

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. 

Do You Have a Record? From Conviction History to EEO-1 Reports, Illinois Imposes New Requirements on Employers

July 6, 2021 | Jessica Holliday

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. 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.

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. Now, the IHRA protects employees (and potential employees) with criminal convictions. In essence, employers are now restricted from using an individual’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. The test to determine whether a “substantial relationship” exists requires the employer to consider “whether the employment position offers an opportunity for the same or similar offense to occur” or whether circumstances exist that would lead to similar conduct

Factors that must be considered by the employer when determining if there is a “substantial relationship” or “unreasonable safety risk” 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’s age when convicted; and (6) evidence regarding the individual’s rehabilitation efforts. 

If it is determined that a “substantial relationship” exists or there is an “unreasonable safety risk,” the employer may preliminary disqualify the individual from employment based on the conviction. 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’s position on disqualification. The employer must provide the individual with five business days to respond to the written notice.

If the employer decides to stand on the disqualification after receiving the individual’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’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).

Not only does the new law amend the IHRA, but it also amends the Illinois Business Corporation Act. 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. This requirement is for those corporations that are required to submit an EEO-1 report with the EEOC. Corporations who are required to provide this information in annual reports must include this information beginning January 1, 2023.

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 “equal pay registration” certificate from the Illinois Department of Labor (IDOL) on or before March 23, 2024. 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. Employers covered by this amendment are required to obtain a recertification every two years after its first submission. 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.

Undoubtedly, these new amendments impose additional burdens on employers and subject employers to additional liability. 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.

Promises, Promises in Arbitration of Employment Disputes

June 29, 2021 | Nicholas Ruble

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’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’ desire to retain the right to modify their arbitration programs.

In Harris v. Volt Mgmt. Corp., 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’s motion to compel arbitration, finding that the arbitration agreement lacked consideration because Volt’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.

As a matter of law, an arbitrator’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 – offer, acceptance, and consideration – 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 both the employer and employee agree to refer their disputes to arbitration.

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’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 “clear and unambiguous.” This “delegation” 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 (“AAA”) into the arbitration agreement. Section 6.a. of the AAA Employment Rules states that “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.” [EmploymentRules_Web_2.pdf (adr.org)]. Missouri courts have held that incorporation of this rule into an arbitration agreement can be a valid delegation.

In Harris, 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.

The arbitration agreement at issue was contained in an “Employee Guide” provided to all new employees at hiring. The Employee Guide provided employees with “general information about Volt’s rules, policies, plans, procedures and practices concerning the terms and conditions” of their employment. The Employee Guide contained a section entitled “Travel expense policy | Arbitration,” which stated that “[a]ny dispute, controversy or claim which arises out of, involves, affects or relates in any way to your employment” must be referred to arbitration. The arbitration would be conducted “in accordance with the applicable rules of the American Arbitration Association (AAA).” The next page of the Employee Guide contained an “Acknowledgement,” which employees were required to sign, that contained the following crucial provision: “Volt has the right to change, interpret or cancel any of its rules, policies, benefits, procedures or practices at Volt’s discretion, upon reasonable notice where practicable. […] 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.”

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 “unfettered right” to unilaterally modify the arbitration provision at any time, Volt’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.

The Court also rejected Volt’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.

Takeaways

  • 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.
  • When drafting arbitration agreements, employers should use care to ensure that modification rights apply only prospectively. The courts have recognized that "limiting an employer's unilateral right to amend an arbitration 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." Patrick v. Altria Grp. Distribution Co., 570 S.W.3d 138, 144 (Mo. App. 2019).

Related Services: Appellate and Employment & Labor

Attorneys: Nicholas Ruble

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About Employment & Labor Law Blog

The BSCR Employment & Labor Law Blog examines topics and developments of interest to employers, Human Resources professionals, and others with an interest in recent legal developments concerning the workplace. This blog will focus on Missouri, Illinois and Kansas law, and on major developments under federal law, and at the EEOC and NLRB.  Learn more about the editor, David M. Eisenberg, and our Employment & Labor  practice.

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