Key Highlights End of nationwide ban efforts: The FTC has officially moved to dismiss its appeals and voted to vacate its proposed nationwide non-compete ban, signaling the end of its push for a universal prohibition. Shift to targeted enforcement: While dropping the broad ban, the FTC remains committed to scrutinizing non-competes on a case-by-case basis, particularly in industries like healthcare and staffing where such agreements are prevalent. Immediate employer impact: On Sept. 10, 2025, the FTC sent letters to large healthcare and staffing employers urging a review of non-competes and restrictive agreements, indicating an enforcement focus in those sectors, alongside a broader public inquiry open until Nov. 3, 2025. Guidance for compliance: Commissioner Meador outlined key factors that the FTC will consider when assessing non-competes, including wage and skill level, scope and duration, less restrictive alternatives and market power — making it essential for employers to review and refine their covenants to align with federal scrutiny and evolving state laws. On Sept. 5, 2025, the FTC moved to dismiss its appeals of injunctions blocking the enforcement of the non-compete ban it sought to implement nationwide last year. That same day, the FTC voted 3-1 to take steps to vacate the ban. These moves mark the end of the FTC’s efforts to implement a universal ban on non-competes, following a change in administration and FTC leadership. However, recent FTC actions suggest the agency remains focused on non-compete agreements, especially in the healthcare and staffing industries. Renewed scrutiny: Rather than pursuing a blanket ban, the FTC is pivoting to case-by-case enforcement and targeting covenants that it views as unfair or anticompetitive. On Sept. 10, 2025, the FTC sent letters to several large healthcare employers and staffing firms urging them to conduct a comprehensive review of their employment agreements — including any non-competes or other restrictive agreements — to ensure they are appropriately tailored and comply with the law. These letters suggest the FTC intends to initially direct its scrutiny of non-competes to the healthcare and staffing industries The FTC’s move parallels state-level action in places like Colorado, Texas and Pennsylvania, which have adopted stricter limits on non-competes in health care, as previously reported by Polsinelli. In addition, the FTC has also launched a public inquiry — open until Nov. 3, 2025 — through which the public may submit information that may be used to inform future enforcement actions. Importantly, this public inquiry is not limited to the healthcare or staffing industries, meaning the FTC’s scrutiny may expand to other sectors. FTC provides roadmap to enforcement priority: In announcing the FTC’s intent to revoke the non-compete ban, Commission Meador issued a statement identifying several contextual and legal factors to help evaluate non-compete provisions: Employee wage and skill level; Deployment in a distribution network (for example, non-competes in the franchise context); Independent contractors; Likelihood of free riding (employer investments in training, employee access to confidential information); Availability of less restrictive alternative; Scope and duration; Market power; and Evidence of economic effects. Impact on current non-competes: Employers should carefully review their non-compete covenants to ensure they are carefully drafted and aligned with both federal and state law. The FTC has made it clear that enforcement is coming — just not through a single sweeping rule. Additionally, in light of the factors from Commissioner Meador, employers should consider their overall non-compete strategy, including which workers are required to enter non-competes and whether alternative tools are available to protect their business interests. Please contact your Polsinelli attorney for help reviewing or updating your agreements and broader non-compete strategy.    

Colorado generally prohibits restrictive covenants, except in narrow circumstances. On May 8, 2025, the Colorado Legislature passed Senate Bill 25-083, which imposes three significant new limitations on the use of restrictive covenants for certain healthcare providers and narrows their application in business sales. These changes will apply to agreements entered into or renewed on or after August 6, 2025. Current Law Overview Under current law (C.R.S. § 8-2-113), non-compete and customer non-solicitation agreements are enforceable only in certain circumstances. For instance, non-competes are enforceable for “highly compensated individuals” when the agreement is reasonably necessary to protect an employer’s trade secrets. However, covenants that restrict a physician’s right to practice medicine after leaving an employer are already void under Colorado law. Key Changes Under SB25-083 Broader Ban on Non-Competes for Healthcare Providers The amendment prohibits non-compete and non-solicitation agreements for certain licensed healthcare providers, even if they meet the "highly compensated" threshold. This includes those who: Practice medicine or dentistry Engage in advanced practice registered nursing Are certified midwives Fall under additional categories listed in C.R.S. § 12-240-113 Liquidated Damages in Physician Contracts Previously, physician employment agreements could include liquidated damages tied to termination or competition. This amendment removes that provision, meaning that: Agreements with unlawful restrictive covenants are unenforceable. Agreements without unlawful provisions remain enforceable and may still carry damages or equitable remedies. It remains unclear whether competition-related liquidated damages are still enforceable under the new law. Expanded Patient Communication Rights Medical providers can no longer be restricted from informing patients about: Their continued medical practice New professional contact information The patient’s right to choose their healthcare provider Confidentiality and trade secret agreements are still allowed, as long as they don’t prevent sharing general knowledge. New Limitations on Business Sale Non-Competes Colorado law has long permitted non-competes in connection with the purchase or sale of a business. SB25-083 narrows this by: Allowing non-competes only for owners of a business interest Placing time limits on non-competes for minority owners or those who received ownership through equity compensation For these individuals, the non-compete duration is capped using a formula: Total consideration received ÷ Average annual cash compensation in the prior two years, or the duration of employment if less than two years. For questions and assistance regarding the upcoming changes to restrictive covenants in Colorado, please contact your Polsinelli attorney.

In November 2020, Colorado voters approved a ballot initiative for a state-run paid family leave benefits program. Under Colorado’s Family and Medical Leave Insurance (“FAMLI”) program, employees and most employers will make contributions into the FAMLI fund, and employees may take 12 weeks of paid leave per year for certain family and medical reasons. Employees who suffer serious health conditions caused by pregnancy or childbirth complications may take up to 4 more weeks of paid leave per year for a total of 16 weeks. Deductions from employee wages for contributions to the FAMLI program begin on January 1, 2023, and employees may begin taking FAMLI leave on January 1, 2024. Although employees cannot take leave until 2024, employers must notify employees of FAMLI benefits by January 1, 2023. Specifically, employers must post a poster available on the Colorado FAMLI Program website by January 1, 2023. The poster must be hung in a prominent and visible workplace location. For employers with remote employees, the poster should be shared electronically with employees. Employers can also prepare for the FAMLI requirements by registering with the My FAMLI+ Employer online system through the Colorado FAMLI Program website. The first premium payments from employers are due April 30, 2023. If you have questions about the FAMLI program, contact your Polsinelli attorney, and continue following the Polsinelli at Work blog in 2023 for more information about the FAMLI program.

On September 11, 2020, the United States Department of Labor (DOL) issued revisions to the Rule implementing the Families First Coronavirus Response Act (FFCRA) to clarify workers’ rights and employers’ responsibilities regarding FFCRA paid leave.  The revised Rule will take effect on September 16, 2020. The Ruling The revised Rule is the DOL’s response to a ruling entered on August 3, 2020, by the United States District Court for the Southern District of New York (District Court) in a lawsuit filed by the State of New York challenging certain provisions of the Rule.  As previously reported, the District Court granted partial summary judgment in favor of the State of New York and ruled that four parts of the Rule were invalid:  (1) the requirement that paid sick leave and expanded family and medical leave are available only if an employee has work from which to take leave (the “work-availability requirement”); (2) the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption; (3) the requirement that an employer consent in order for an employee to take intermittent leave under the FFCRA; and (4) the requirement that an employee submit documentation to their employer as a pre-condition to leave.  Following the District Court’s ruling, employers in New York faced uncertainty as they evaluated whether and how to apply the FFCRA. The Revised Rule In recognition of the “pressing need for clarity in light of the District Court’s decision,” the DOL issued the revised Rule “to reaffirm its regulations in part, revise its regulations in part, and further explain its positions.” Work-Availability Requirement The revised Rule first reaffirms the work-availability requirement, explaining that an employee may only take paid sick leave or expanded family and medical leave under the FFCRA to the extent that any qualifying reason is a but-for cause of his or her inability to work.  Thus, if an employer has no work for the employee to perform, the employee is not entitled to paid sick leave or expanded family and medical leave under the FFCRA. Employer Approval for Intermittent Leave Likewise, the revised Rule reaffirms that employer approval is needed to take intermittent FFCRA leave in all situations in which intermittent FFCRA leave is permitted.  On this point, the DOL explained that the employer-approval condition balances the employee’s need for leave with the employer’s interest in avoiding disruptions to operations. According to the DOL, the employer-approval condition allows both employers and employees flexibility in agreeing upon telework and scheduling arrangements that may reduce or even eliminate an employee’s need for FFCRA leave by reorganizing work time to accommodate the employee’s needs related to COVID-19. The Definition of “Health Care Provider” With regard to the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption, the revised Rule adopts an amended regulatory definition including: (1) the FMLA definition of “health care provider” (any employee who is a health care provider under 29 CFR 825.102 and 825.125), and (2) any other employee who is capable of providing health care services, meaning he or she is employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated and necessary to the provision of patient care and, if not provided, would adversely impact patient care. While the DOL’s expanded definition of “health care provider” is broader in scope than the classic FMLA definition of “health care provider,” the DOL made clear that it is not enough that an employee works for an entity that provides health care services.  Certainly the revised definition includes nurses, nurse assistants, medical technicians, and any other persons who directly provide patient services, and would also include individuals whose work impacts diagnostic, preventative, and treatment services, such as lab technicians.  Other employees covered by the revised definition include those who provide services that if not provided would adversely affect patient care.  The Supplementary Explanation that precedes the revised Rule explains that examples include, individuals who bathe, dress, hand feed, or take vital signs of patients, individuals who set up equipment for medical procedures, and individuals who transport patients and samples.  The DOL also provided a non-exhaustive list of employees who are excluded from the definition of “health care provider,” including IT employees, building maintenance staff, human resources personnel, cooks, food services workers, records managers, and billers.  According to the DOL, the services provided by these employees may be related to patient care but they are too attenuated to be integrated and necessary components of patient care.  As such, healthcare employers should immediately evaluate the revised Rule and its impact on their leave decisions. Timing of FFCRA Documentation Finally, the revised Rule clarifies that an employee is not required to submit documentation concerning the need for leave prior to taking paid sick leave or expanded family and medical leave, but rather should submit documentation as soon as practicable.  The DOL notes that in most cases, the requirement to submit documentation will be when the employee provides notice of the employee’s need for leave.  However, when the need for expanded family and medical leave is foreseeable, such as when an employee receives advance notice of a school closure, the employee is likewise required to provide notice as soon as practicable, which would occur before taking leave. Updated FAQs In addition to issuing the revised Final Rule on September 11, 2020, the DOL updated its FAQs to reflect its new guidance concerning the application of the FFCRA. Next Steps for Employers It is yet to be determined whether the revised Rule will satisfy the concerns addressed in the District Court’s ruling, or whether the DOL will face additional challenges by the State of New York or other jurisdictions.  Regardless, employers should apply the FFCRA consistent with the revised Rule and should consult counsel with any questions.  Importantly, health care employers who may have exempted some or all of their employees from the FFCRA based on the DOL’s prior definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption should consult with counsel to determine the new scope of exempted employees and the proper path forward for their organization.

On April 1, 2020, the United States Department of Labor (DOL) issued a Final Rule implementing the Families First Coronavirus Response Act (FFCRA).  Shortly thereafter, the State of New York filed suit against the DOL, arguing that several features of the Final Rule exceeded the DOL’s authority under the FFCRA. Yesterday, the United States District Court for the Southern District of New York granted partial summary judgment in favor of the State of New York and “vacated” four aspects of the Final Rule. Specifically: (1) the “work-availability requirement”; (2) the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption; (3) the requirement that an employer consent in order for an employee to take intermittent leave under the FFCRA; and (4) the requirement that an employee submit documentation to their employer as a pre-condition to leave. The Court’s ruling could have a significant impact on how FFCRA leave is administered in New York, and potentially across the Country if other states follow in New York’s footsteps. First, without the “work-availability requirement,” an employee is entitled to paid FFCRA leave even if an employer is temporarily closed or they are placed on furlough because the employer does not have work.  The Court analogized a furloughed employee to a teacher on paid parental leave who would still be considered to be on “leave” even if school is called off for a snow day. Although the Court invalidated the requirement, on this issue the Court acknowledged that the statutory language on this point was ambiguous, and that the DOL has the authority to issue guidance on the matter.  Further, while the Court held that the DOL’s “barebones explanation for the work-availability requirement is patently deficient,” it did not find that the conclusion was inconsistent with the statute.  As a result, even leaving aside the possibility of a different outcome on appeal, the DOL may be able to address the Court’s concern through a more thoroughly reasoned explanation of its interpretation. Second, the Court’s Order dramatically narrows the scope of the “health care provider or emergency responder” exemption, which allows an employer of an employee who is a health care provider or emergency responder to exclude the employee from taking leave under the FFCRA.  The DOL’s Final Rule defined a “health care provider” much more broadly than the statute as: anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity.  This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. The DOL’s broad definition provided many health care related employers the option to apply the exemption to virtually all of their employees. By vacating the Final Rule’s definition of “health care provider,” the only positions clearly included within the definition are those identified in the Family and Medical Leave Act’s (FMLA) definition of “health care provider,” which is limited to “a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate)” or “any other person determined by the Secretary to be capable of providing health care services.” (A listing of those other persons is available here).  In rejecting the DOL’s definition, the Court acknowledged that the DOL, though the Secretary of Labor, has authority to expand the definition of the term beyond what is set forth in the statute.  However, it required that there be “at least a minimally role-specific determination” with respect to the application of the exemption.  As a result, even absent an effective appeal, the DOL could take steps to refine this definition, in which case it will be more likely to receive deference from a reviewing court. The Final Rule permits employees to take FFCRA leave intermittently only if the employer and employee agree, and even then, only for a subset of qualifying reasons where there is a minimal risk that the employee will spread COVID-19 to other employees. On this point, the Court agreed with the limitation on the reasons for which employees may take intermittent leave but vacated the requirement that an employer must consent to intermittent leave. Accordingly, the ruling would not require employers to grant intermittent leave when there is a risk of spreading COVID-19 to other employees. However, this decision indicates that employers who do not currently permit intermittent leave under circumstances where there is not a risk of spreading COVID-19 may be at risk if they do not do so going forward. Finally, the Court found that the requirement that an employee submit documentation concerning the need for leave as a condition precedent to taking FFCRA leave was inconsistent with the notice provisions contained in the FFCRA. At this point, it is unclear whether the DOL will move to stay the order pending appeal to the Second Circuit.  What is clear, unfortunately, is that employers are once again faced with uncertainty as they evaluate whether and how to apply the FFCRA.  The Court’s opinion does not apply beyond New York, and it does not mean that the problems with the DOL’s Final Rule cannot be remedied, but employers should take notice and consult with counsel to determine the proper path forward for their organization.

On April 1, 2020, the Wage and Hour Division of the Department of Labor (“DOL”) issued temporary regulations (“Regulations”) to implement the Public Health Emergency Leave (“Emergency FMLA Leave”) and Emergency Paid Sick Leave (“Paid Sick Leave”) benefits available under the Families First Coronavirus Response Act (“the “Act”). The Regulations took immediate effect, on the effective date of the Act, and remain in effect through December 31, 2020, when the Act expires. The Regulations expand on the DOL’s guidance or “Families First Coronavirus Response Act: Questions and Answers,” which were issued late the week of March 23 and updated over the following weekend.  In some instances, the Regulations are inconsistent with the DOL’s former guidance – particularly with regard to: (1) The reasons an employee may take Paid Sick Leave, (2) The applicability of the integrated employer and joint employer tests which are used to determine the number of employees for purposes of coverage under the Act, and (3) The documentation employers may request to determine an employee’s eligibility for leave under the Act. The DOL updated its previous guidance or Questions and Answers on April 1, 2020 (here), to conform to the Regulations. A brief summary of several sections that (1) depart from the DOL’s former guidance or (2) provide new information the DOL did not previously address is below. Government Orders The Regulations expand the qualifying reasons for Paid Sick Leave to include containment, shelter-in-place and stay-at-home orders.  However, an employee is only entitled to Paid Sick Leave if the order “cause[s] the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order.” Significantly, the Regulations further broaden “Subject to a Quarantine or Isolation Order” to include: when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them. Advice to Self-Quarantine The Regulations state that an employee has been “advised by a health care provider to self-quarantine due to COVID-19 concerns” for purposes of Paid Sick Leave if: (i) A health care provider advises the Employee to self-quarantine based on a belief that— (A) the Employee has COVID-19; (B) the Employee may have COVID-19; or (C) the Employee is particularly vulnerable to COVID-19; and (ii) following the advice of a health care provider to self-quarantine prevents the Employee from being able to work, either at the Employee’s normal workplace or by Telework. Similarly, the Regulations provide that an employee may take Paid Sick Leave to care for another who has received any of the same recommendations.  On that point, the Regulations explain that to qualify for Paid Sick Leave, the other person must be: an Employee’s immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined. For this purpose, ‘individual’ does not include persons with whom the Employee has no personal relationship. Seeking a Diagnosis With respect to people who suspect that they are ill, the Regulations clarify that if an employee is taking leave because they are “experiencing COVID-19 symptoms and seeking medical diagnosis,” the employee’s Paid Sick Leave “is limited to the time the Employee is unable to work because the Employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test.” Employer Coverage The Regulations provide that all common employees of joint employers or all employees of integrated employers must be counted together to determine coverage under the Act.  We have covered this issue in more detail here. Notice of Need for Leave and Documentation of Need for Leave The Regulations regarding documentation of the need for leave are a departure from the DOL’s former guidance, which suggested that an employer could require a variety of documents with a request for Paid Sick Leave or Emergency FMLA Leave.  The Regulations provide that an employer may not require a notice of the need for leave to include documentation beyond what is listed below. Before taking either Paid Sick Leave or Emergency FMLA Leave, all employees must give their employers documentation that includes: (1)  The employee’s name; (2)  The date(s) for which leave is requested; (3)  The qualifying reason for the leave; and (4)   A written or oral statement that the employee is unable to work because of the qualifying reason for leave. Before taking a Paid Sick Leave or Emergency FMLA Leave, some employees must additionally provide: o   For an employee subject to a federal, state or local quarantine or isolation order related to COVID-19: the name of the government entity that issued the Quarantine or Isolation Order o   For an employee advised by a health care provider to self-quarantine due to COVID-19 concerns: the name of the health care provider who advised the employee to self-quarantine due to concerns related to COVID-19. o   For an employee caring for an individual subject to a federal, state or local quarantine or isolation order or a health care provider’s advice to self-quarantine due to COVID-19 concerns: either (a) the name of the government entity that issued the Quarantine or Isolation Order to which the individual being cared for is subject or (b) the name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19. o   For an employee caring for the employee’s child whose school or place of care is closed or the child’s care provider is unavailable due to a public health emergency) or Emergency FMLA Leave: the name of the employee’s child (or children), the name of the closed or unavailable school or child care provider, and a representation that no other suitable person will care for the employee’s child when the employee takes Paid Sick Leave or Emergency FMLA Leave. In addition to the information specifically identified, the Regulations generally state that an employer may request that an employee provide additional material as needed to support the employer’s request for tax credits pursuant to the Act.  And, the Regulations state that employers are not required to provide an employee’s request for leave if the employee fails to provide materials sufficient to support the applicable tax credit.  With respect to documents required for tax credits, the Regulations refer to https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs (“IRS FAQs”) for more information. Significantly, neither the Regulations nor the IRS FAQs specify any additional information employees must provide an employer to take Paid Sick Leave based on experiencing COVID-19 symptoms and seeking medical diagnosis or for employees experiencing any other substantially similar condition specified by the federal government. While the Regulations answer questions about the process of requesting leave under the Act, the Regulations leave open questions about: Whether employers can require additional documentation substantiating the need for leave after a Paid Sick Leave or Emergency FMLA Leave is approved. Whether the DOL will issue additional Regulations or the IRS will issue additional guidance on the documentation process in the coming weeks. Recordkeeping Finally, under the Regulations, an employer must: Retain all documentation related to an employee’s request for or entitlement to Paid Sick Leave or Emergency FMLA Leave for four years, regardless of whether the leave was granted or denied. Document and keep any oral statements an employee provided to support a request for Paid Sick Leave or Emergency FMLA Leave for four years. Have an authorized officer document that the employer is eligible for the small employer exemption to the Act when the employer denies an employee’s request for Paid Sick Leave or Emergency FMLA Leave (and keep such documentation for four years). Notably, the Regulations provide that a small employer must post a notice regarding the Act, even if the employer determines that it is exempt.

Since the Families First Coronavirus Response Act was signed on March 18, 2020, employers of health care providers have wondered how much of their workforce would be eligible for paid sick leave and emergency FMLA leave. (Our prior blog post on this topic is available here.) Just in time for the April 1 effective date of the FFCRA, the Department of Labor has provided new guidance. (The guidance is available here) While existing FMLA regulations provided exemptions for a number of specific provider types, many employees of health care facilities would not have been exempt. Under the DOL’s updated guidance, the health care exemption applies to everyone employed at a: doctor’s office hospital health care center health clinic pharmacy post-secondary educational institution offering health care instruction medical school nursing facility retirement facility nursing home home health care provider facility that performs laboratory testing facility that performs medical testing local health department or agency The guidance also includes a catch-all category for employers similar to the listed employers. Further, the guidance allows exemptions for employees of entities that provide services to or maintain the operations of any of the employers listed above. Accordingly, all clinicians and non-clinical staff members working for health care employers or their contractors / vendors are exempt – they do not qualify for either paid sick leave or emergency FMLA leave under the FFCRA. While the definition of health care provider is quite broad, the DOL urges employers to “be judicious” in exempting workers apparently based on its concern that employees could spread COVID-19 if leave is not available. This guidance is an important reminder to employers to consider how their policies may influence whether an employee who is sick will feel incentivized to come to work.

Employers have faced many questions as they prepare for the effective date of the Families First Coronavirus Act (FFCRA).  Many of those questions remained unanswered after the Department of Labor issued its “Families First Coronavirus Response Act: Questions and Answers” on Tuesday, February 23, 2020.  The DOL added to its guidance late Thursday, February 25, addressing some of these outstanding issues: What does it mean to be “unable to work” to qualify for leave under the FFCRA?  An employee is unable to work if the employer has work available for the employee to perform, either at a worksite or remotely, and the employee is unable to perform that work because of a COVID-19 qualifying reason.  A common example is if an employer has telework available, but the employee cannot perform the telework because the employee has a young child who needs supervision because the school is closed due to COVID-19. On the other hand, if the employer’s worksite is shut down, for example under a stay at home order, and the employee’s work cannot be performed remotely, the employee likely does not qualify for leave—the employee is able to work, the work is just not available.  Note, though, that a stay at home order is different from a quarantine or self-isolation order.  Employees under a quarantine/isolation order might be entitled to leave. Do laid off or furloughed employees qualify for leave?  No.  Once an employee is laid off or furloughed, whether before or after April 1, that employee is no longer eligible for leave under the FFCRA.  The same is true even if the employee is laid off or furloughed while on leave provided by the FFRCA.  The same is also true if an employer closes the worksite, before or after April 1, even for a brief or temporary period.  In sum, an employee is not entitled to leave under the FFCRA during the period while the business is closed, even if the closure was caused by a federal, state, or local order.  Similarly, an employee cannot use leave under the FFCRA for hours reduced by an employer, even if the reduction in hours was related to COVID-19. Can an employer require documentation showing an employee’s need for leave?  Yes.  An employer can and should require an employee to provide documentation showing the COVID-19 qualifying need for leave, such as a closure notice on a school website or a copy of a government order placing the employee under quarantine.   Indeed, an employer must require and retain documentation to claim for the tax credit available under the FFCRA.  There are no designated FFCRA forms.  However, an employee requesting emergency FMLA for a COVID-19 qualifying reason that rises to the level of a “serious medical condition” must continue to provide the medical certifications required under the FMLA. Click here for the fact sheet. Can FFCRA leave be used intermittently?  It depends.  If an employee is teleworking, the employee may use emergency FMLA or paid sick leave in any increment the employer agrees to.  If an employee is performing work at the employer’s worksite, the employee may use emergency FMLA or paid sick leave intermittently to care for the employee’s child(ren) whose school is closed or childcare is unavailable because of COVID-19 related reasons with the employer’s permission.  However, an employee must use emergency paid sick leave continuously in full day increments if the employee is subject to an isolation or quarantine order, has been advised by a healthcare professional to self-quarantine, is experiencing COVID-19 symptoms, or is caring for someone isolated because of or suffering from COVID-19 symptoms.  In these situations, the employee must use the emergency paid sick leave continuously until the employee exhausts the leave available or no longer has a qualifying reason for the leave.  Note the DOL’s guidance encouraged flexible, voluntary arrangements when the employee needs leave to care for a child who is out of school or does not have childcare due to COVID-19. Can FFCRA leave be used in conjunction with unemployment benefits?  Not under federal law.  Under federal law, an employee receiving paid leave under the FFCRA is not eligible for unemployment insurance benefits.  However, benefits may be available under state law as states have the authority to offer unemployment benefits to workers whose pay has been reduced. The full text of the DOL’s Q&A is available here.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the “Act”), requiring employers with less than 500 employees to provide Public Health Emergency Leave and Paid Sick Time to employees impacted by the Coronavirus pandemic.  The details of the Act are set out in our earlier Blog post here. Health care providers and first responders on the frontline of the pandemic have a critical need to understand how this requirement impacts their operations during this critical moment.  In evaluating this issue, it is important to note that the two leave requirements, one for child care and the other for illness, arise in different portions of the Act.  The right to Public Health Emergency Leave is set forth in Division C of the Act, which amends the existing statutory text of the Family and Medical Leave Act (“FMLA”).  The right to Paid Sick Time is set forth in Division E of the Act, which creates a new statute known as the Emergency Paid Sick Leave Act. Both of these Divisions address the application of leave provisions to health care providers.  Specifically, the FMLA amendment provides that the Secretary of Labor may issue regulations excluding certain health care providers from the definition of “Eligible Employee”.  The Emergency Paid Sick Leave Act provides that the Secretary of Labor may issue regulations “to exclude certain health care providers and emergency responders from the definition of employee under section 5110(1) including by allowing the employer of such health care providers and emergency responders to opt out.” Additionally, both the FMLA amendments and the Emergency Paid Sick Leave Act allow an employer of an employee who is a health care provider or an emergency responder to elect to exclude a health care provider from coverage under these expanded worker benefits.  The Act provides that the term “health care provider” as it is used in the FMLA amendments shall have the same meaning given to the term under Section 101 of the FMLA.  There is no similar provision in the Emergency Paid Sick Leave Act.  However, employers may look to the FMLA for guidance. The term “health care provider” is defined in Section 101(6) of the FMLA to mean (A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or (B) any other person determined by the Secretary to be capable of providing health care services. The Secretary of Labor subsequently issued regulations expanding this definition to include the following: Podiatrists, dentists, clinical psychologists, optometrists, and chiropractors (limited to treatment consisting of manual manipulation of the spine to correct a subluxation as demonstrated by X-ray to exist) authorized to practice in the State and performing within the scope of their practice as defined under State law; Nurse practitioners, nurse-midwives, clinical social workers and physician assistants who are authorized to practice under State law and who are performing within the scope of their practice as defined under State law; Christian Science Practitioners listed with the First Church of Christ, Scientist in Boston, Massachusetts. Where an employee or family member is receiving treatment from a Christian Science practitioner, an employee may not object to any requirement from an employer that the employee or family member submit to examination (though not treatment) to obtain a second or third certification from a health care provider other than a Christian Science practitioner except as otherwise provided under applicable State or local law or collective bargaining agreement; Any health care provider from whom an employer or the employer's group health plan's benefits manager will accept certification of the existence of a serious health condition to substantiate a claim for benefits; and A health care provider listed above who practices in a country other than the United States, who is authorized to practice in accordance with the law of that country, and who is performing within the scope of his or her practice as defined under such law. The phrase “authorized to practice in the State” means that the provider must be authorized to diagnose and treat physical or mental health conditions. Based on these definitions, it is clear that a large number of employees in the health care industry may be excluded from coverage under the Act at the employer’s discretion. Less clear is whether the Secretary of Labor will adopt regulations excluding all health care providers or allowing health care employers to opt out of Emergency Paid Sick Leave. To date, the Secretary of Labor has not issued express guidance on this issue.

Since negotiations began last week, people across the country have been anxious to know how Congress’s response to the COVID-19 pandemic would impact them. The Senate has just passed the Families First Coronavirus Response Act (“Act”). The Act will impact how employers address the pandemic and how health care providers are paid for some of the services associated with COVID-19. Unemployment Benefits The Act provides $500 million dedicated to providing immediate, additional funding to states for staffing, technology, and other administrative costs, so long as the state meets certain claim processing requirements. For states with a 10% or more increase in their unemployment rate (over the previous year) that comply with all beneficiary access provisions, the federal government will provide 100% of the funding for Extended Benefits, as opposed to the usual 50%. Emergency Paid Sick Leave Act Employers with fewer than 500 employees and government employers must provide employees with an additional two weeks of paid sick leave for certain COVID-19-related instances. Employers must provide paid sick leave to an employee who is unable to work (or telework) due to a need for leave because: 1. The employee is subject to or is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19. 2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 or is caring for an individual who has been so advised. 3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis. 4. The employee is caring for their child due to the closure of their child’s school or place of care, or the unavailability of the child’s care provider, due to COVID-19 precautions. 5. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor. Employees would receive the following amounts of paid sick leave: 1. Full-time Employees – 80 hours 2. Part-time Employees – hours equal to the number of hours that such employee works, on average, over 2 weeks For employees on leave due to being placed in isolation or experiencing COVID-19 symptoms, paid sick leave is paid at their full regular rate, capped at $511 per day and $5,110 in the aggregate. For employees on leave due to the other reasons provided in the Act, paid sick leave is at 2/3 the employee’s regular rate, capped at $200 per day and $2,000 in the aggregate. If an employee works varying hours week to week, the number of hours paid is based on the average number of hours scheduled per day over a 6-month period ending on the date when an employee took leave, or if such information is unavailable, the employee’s reasonable expectation at the time of hiring of the average hours per day the employee would be scheduled to work. After the first day an employee receives paid sick leave, an employer may require the employee to follow reasonable procedures to continue receiving paid sick leave. Sick leave under the Act expires if not used in 2020. State and local paid leave entitlements are not preempted by the Act. Employers are prohibited from discharging, disciplining, or discriminating against an employee who takes leave under this Act or complains or institutes a complaint related to this Act. Employers violating this Act will be considered to have violated the Fair Labor Standards Act (“FLSA”) and will be subject to the respective penalties. The Secretary of Labor may exempt employers with less than 50 employees from the paid sick leave requirements if compliance would jeopardize the business’s viability as a going concern and may also exclude certain health care providers and emergency responders from the definition of eligible employee. The sick time requirements go into effect 15 days after the bill is enacted and expire December 31, 2020. Emergency Family and Medical Leave Expansion Act Employers with fewer than 500 employees must provide 12-weeks of job-protected, partially paid FMLA leave to certain employees prevented from working due to COVID-19. Employees are eligible if they have been employed for at least 30 calendar days (not the 12 months typically required under FMLA). Employers must provide 12 weeks of FMLA leave if an employee is unable to work (or telework) due to the need to care for their minor child because of the closure of the child’s school or care facility, or unavailability of the child’s care provider, due to a declared Federal, State, or local COVID-19 emergency. Employers are not required to provide paid leave during the first 10 days of leave under this section of the Act. Accordingly, pay for the first 10 days would be under paid sick leave. After the first 10 days of FMLA leave, employers must pay an employee no less than 2/3 of the employee’s regular rate of pay under the FLSA for the number of hours the employee would have normally been scheduled to work, up to $200 per day and $10,000 in the aggregate. If an employee works varying hours week to week, the number of hours is based on the average number of hours scheduled per day over a 6-month period ending on the date when an employee took leave, or if such information is unavailable, the employee’s reasonable expectation at the time of hiring of the average hours per day the employee would be scheduled to work. Employees must provide the employer with notice of leave as is practicable. At the end of the leave period, employers must generally reinstate employees to the same or a reasonably equivalent position upon availability. Employers with fewer than 25 employees are not required to reinstate employees under certain conditions. The Secretary of Labor may exempt employers with less than 50 employees from the emergency leave requirements if compliance would jeopardize the business’s viability as a going concern and may also exclude certain health care providers and emergency responders from the definition of eligible employee. The emergency leave requirements go into effect no later than 15 days after enacted and expires December 31, 2020. Employer Tax Credits In order to defray costs, the Act provides a payroll tax credit to employers for “qualified sick leave wages” (i.e., wages required to be paid under the Emergency Paid Sick Leave Act) and “qualified family leave wages” (i.e., wages required to be paid by the Emergency FMLA Expansion Act), subject to certain caps. Employers may claim a credit against Social Security tax liability for each calendar quarter. If the credit exceeds an employer’s social security taxes for a calendar quarter, the excess is generally refundable. Health Care Costs The Act includes several notable provisions aimed at providing coverage for COVID-19 related health care services. Private group and individual health plans must cover COVID-19 diagnostic testing, including the cost of a provider, urgent care, or emergency room visit to obtain the testing, without any patient cost-sharing (this includes deductibles, copayments, and coinsurance). Medicare Part B already covers the cost of a COVID-19 diagnostic test, but the Act expands that coverage to include COVID-19 testing-related services, with no cost-sharing. A “testing-related service” is an outpatient, hospital observation, emergency department, nursing facility, or home service furnished during the COVID-19 emergency that relates to and results in an order for a COVID-19 diagnostic test. Medicare Advantage plans must also cover COVID-19 diagnostic testing and testing-related services without any cost-sharing or prior authorization requirements. Medicaid and CHIP plans are similarly required to cover COVID-19 diagnostic testing and the related visit without any patient cost-sharing. Individuals covered under TRICARE, veterans, and federal civilian workers cannot be charged for any cost-sharing for COVID-19 diagnostic testing and the associated visit. The same is also true for individuals receiving care through the Indian Health Service. During the COVID-19 emergency period, states are permitted to expand Medicaid to uninsured individuals for COVID-19 diagnostic testing and the associated provider visit. Medicaid costs for these individuals will be matched 100% by the federal government. For the period of the public health emergency, the federal government will increase Federal Medical Assistance Percentages (FMAP), the federal funding portion of all Medicaid programs, by 6.2%. Allotments to U.S. territories will also increase. Conclusion Employers, payors and health care providers will need to take immediate steps to adapt to the requirements of the Act. Polsinelli’s Cross-Disciplinary COVID-19 Response Team is at the forefront of these efforts and stands ready to assist.

On May 22, 2019, Colorado’s Governor Polis signed the Equal Pay for Equal Work Act (the “Act”), which brings significant changes to the existing Wage Equality Regardless of Sex Act. C.R.S. § 8-5-101 et seq.  Effective January 1, 2021, the Act will prohibit employers from paying an employee of one sex less than an employee of a different sex for substantially the same work. Employers will also be required to announce or post all opportunities for promotion to all current employees on the same calendar day, and include the hourly or salary compensation, prior to making a promotion decision. Additionally, employers will be required to keep records of job descriptions and wage rate history for each employee for the duration of employment plus two years after the end of employment. Note that wage differentials between employees of different sexes who perform substantially similar work are allowed where the employer can demonstrate that the difference in wages is based upon one or more factors, including: A seniority system; A merit system; A system that measures earnings by quantity or quality of production; The geographic location where the work is performed; Education, training, or experience to the extent that they are reasonably related to the work in question; or Travel, if the travel is a regular and necessary condition of the work performed. Also, the Act will prohibit an employer from: Seeking the wage rate history of a prospective employee or relying on a prior wage rate of a prospective employee to determine a wage rate; Discriminating or retaliating against a prospective employee for failing to disclose the employee’s wage rate history; Discharging or retaliating against an employee for asserting the rights established by the Act; Prohibiting employees from disclosing their wage rates; and Requiring an employee to sign a waiver that prohibits an employee from disclosing their wage rate information. Importantly, the Act will remove the authority of the Colorado Department of Labor and Employment to enforce wage discrimination complaints based on sex and permit aggrieved employees to file a civil action in district court, where a prevailing employee may recover liquidated damages and attorneys’ fees. Employers may wish to consider auditing their existing pay structures to make sure employees are receiving equal pay for equal work in compliance with the Act and would do well to post all opportunities for promotion to all current employees at the same time. Employers with questions regarding the Act, or pay audits generally, should consult with competent counsel.

Many Colorado physician employment agreements and equity agreements require physicians to pay liquidated damages if the physician competes with his/her former employer after leaving the organization.  The payment of damages are a work-around of the Colorado statute on restrictive covenants, which provides that a physician cannot be prevented from practicing through a restrictive covenant, but permits an organization to require a physician to pay for damages caused by termination of the employment or equity agreement, including damages caused by competition. Two recent legal developments suggest that health care organizations should take a look at their agreements that contain damages provisions for Colorado physicians. 1. On March 8, 2018, a division of Colorado’s Court of Appeals announced a decision criticizing a physician liquidated damage provision.  Crocker v. Greater Colorado Anesthesia, P.C., 2018COA33.    Specifically, the decision stated that because Colorado’s statute provides that physicians can be required to pay damages “related to the injury suffered,” a liquidated damages provision must be reasonable compared to the actual damages experienced after the physician’s departure and competition.  In other words, the decision stated that, unlike other liquidated damage provisions, courts should not assess whether the liquidated damage provision was reasonable when signed, but whether the liquidated damage provision is reasonable at the time of enforcement and in comparison to actual damages experienced.  Importantly, the decision did not state that physician liquidated damages provisions are categorically unenforceable.  Moreover, there are grounds for later courts to conclude these statements are non-binding dicta.  Nevertheless, the decision highlights an issue that is likely to be raised in future cases and should prompt health care organizations to act. 2. Effective April 2, 2018, the legislature amended Colorado’s statute on restrictive covenants to ensure access to care for patients with rare disorders.  As a result of this amendment, physicians are permitted to notify and continue to treat or consult for patients with rare disorders when they leave one organization for another.  Additionally, the statute protects physicians and the organizations that employ them from paying damages for notifying and providing treatment or consultations for patients with rare disorders.  Rather than defining criteria for rare disorders, the statute uses a list compiled and maintained by the National Organization for Rare Disorders, Inc. In response to these developments health care organizations should take the following steps: Review the method used when setting the liquidated damages formula or amount. Assess with experienced counsel whether it demonstrates a desire to and is an attempt to reach an amount that is reasonably related to actual damages. Test the liquidated damage formula or amount against actual experience to assess whether the amount is reasonably related to actual damages. Review accounting and other administrative procedures with experienced counsel to ensure that the organization will be able to prove any  actual damages suffered. Assess with experienced counsel whether the liquidated damages formula or amount should be revised in light of the rare conditions amendment. Evaluate whether training should be provided to physicians and administration about revisions to the liquidated damage provisions and the rare conditions amendment.

Medical leaves pose operational and legal challenges for employers. As we have previously addressed, those challenges multiply when the employee’s medical leave stems from a workplace injury and workers’ compensation laws are added to the employer’s compliance challenges. Indeed, such injuries can result in the employee seeking leave for an indefinite amount of time. To avoid the uncertainty and difficulties caused by employee absences of indefinite duration, some employers have implemented a “maximum leave” policy – a policy that limits the total amount of leave (from all laws and policies) that an employee can take in a given period of time. However, even a very generous maximum leave policy could violate the Americans with Disabilities Act (ADA), as some courts have held that extended leave can be considered a “reasonable accommodation” of an employee’s disabling condition. Similarly, the U.S. Equal Employment Opportunity Commission has taken the position that “maximum leave” policies are subject to exceptions in the interactive process and that an employer should reasonably accommodate an employee seeking an exception unless doing so will cause an undue hardship. Below are three steps that an employer can take to reduce the risk of an ADA violation when implementing a “maximum leave” policy. 1. Maintain Flexibility The EEOC has recently obtained multi-million dollar consent decrees and settlements from employers that sought to enforce maximum leave policies with respect to disabled employees.  An employer that implements a maximum leave policy may need to consider granting an employee leave beyond the “maximum” allowed leave as an accommodation under the ADA. Accordingly, employers may wish to consider including a statement in any maximum leave policy which provides that there are situations where leave time beyond the stated limit will be granted. 2. Communicate Carefully with Employees Some employers send form letters to employees who are approaching the end of the maximum leave period, which state that the employee must either return to work at the end of the maximum leave period or face termination. The EEOC’s guidance on maximum leave policies suggests that it may consider these communications to violate the ADA. Employers may wish to consider tempering those letters and adding a request that the employee advise the employer by a date certain if the employee believes they may need further leave as an accommodation. 3. Train Employees Employers may wish to train employees that leave may be granted as an accommodation under the ADA and that a maximum leave policy does not prohibit such an accommodation. In particular, employers would do well to train human resources officials, other employees who implement the policy, and all managers on the need to maintain flexibility regarding maximum leave policies to avoid running afoul of the ADA.

With job candidates posting extensive information on social media and other information available on the Internet, technologists are developing ways to mine and use that data in the hiring process. This field (sometimes referred to as “people analytics”) is marketed as full of promise, including the possibility of identifying unrealized potential, increasing diversity, reducing turnover, improving employee satisfaction, and improving the company and individual performance. However, for employers inclined to embrace people analytics, there are a number of employment law-related issues to consider. 1.    Statistics Are Not Inherently Objective People analytics may help reduce the subjective assessments that are inherent in the interview process. However, to create a tool to predict success on the job or identify “desirable” traits for job applicants, an employer must first define what makes an employee successful or the traits that are desirable. Typically, the logical starting point is an employer’s current workforce. The current workforce may not include “successful” employees as the employer would now define the job or the “desirable” traits for the job going forward. As such, tools based on the current workforce may perpetuate the issues found in the current work environment. Employers may wish to consider whether the data used or the tool itself should be adjusted to counter those tendencies. In addition, employers should consider whether augmenting their own data with data from outside of the company could improve the objectivity of the data. 2.    Correlation Is Not the Same as Causation Analysis of data about existing employees or workers in the industry will likely reveal many interesting connections. It is easy at first to erroneously assume that a connection is causal. For example, even if there is a correlation between playing team sports in school and ultimately succeeding on the job, participating in team sports may not be the reason that the employees are ultimately successful. If the technologist or employer focuses more on the measurable indicator (team sports) than what the measurable indicator reflects (e.g., time management), the predictive value of the tool may suffer and the tool may have unintended effects. Accordingly, technologists and employers should not limit their thinking to finding correlations and should consider what the correlations mean about the applicant or employee’s skills and abilities. 3.    Technologists, HR and Legal Teams Should Partner on People Analytics An employer might save time and reduce legal risk by having technologists develop or implement a people analytics tool alongside the employer’s HR and legal teams. The HR and legal teams can help the technologists avoid creating or implementing a tool that results in discrimination or violates other laws, such as privacy laws and the Fair Credit Reporting Act.

In Acclaim Systems, Inc. v. Infosys, Ltd, et al., the Third Circuit demonstrated that ignorance can sometimes be bliss when it comes to restrictive covenants. In that case, a large cable provider contracted with Acclaim Systems to provide information technology consulting services for a customer relations platform. Partway through the project, the cable provider transferred the work to Infosys. One Acclaim Systems employee and three subcontractors followed the project to Infosys. Each of the four workers had non-competes that prohibited them from working for another company on the cable project. Infosys never learned of those agreements despite asking the workers (including a question on the job application) and asking the staffing company providing the subcontractors. The Third Circuit affirmed summary judgment for Infosys because it could not intend to interfere with non-competition covenants of which it was unaware. This case highlights four important employment practices. 1.    Ask Questions When On-Boarding As the decision in Acclaim Systems demonstrates, asking potential employees, contractors, and staffing companies whether a worker or contracting company has signed any restrictive covenants can be a key strategy to avoid tortious interference claims. In particular, a question on a job application and a covenant in a contract can be important evidence that the employer or contracting principal performed due diligence. Indeed, the decision in Acclaim Systems suggests that a company that does not ask about restrictive covenants to avoid claims of tortious interference could still be liable for tortious interference, particularly in industries like information technology consulting where restrictive covenants are common. 2.    Provide a Copy of Agreements at Departure In addition to verbally reminding workers of any applicable restrictive covenants during exit interviews, companies that obtain restrictive covenants should provide the worker with a copy of the executed restrictive covenant agreement (and should document what was provided). This practice not only ensures that the worker can consult the actual terms (as opposed to his or her potentially faulty memory), but it also makes it possible for the worker to provide the agreement to potential employers and contracting principals. 3.    Notify Subsequent Potential Employers and Contracting Principals As explained in a prior blog post,  contacting potential and subsequent employers and contracting principals can be an important strategy in enforcing restrictive covenants. In addition to verbal contact, companies should consider sending a copy of the agreement containing restrictive covenants to potential and subsequent employers and contracting principals before or even after an alleged breach. 4.    Get Permission to Notify Potential and Subsequent Employers and Contracting Principals A company obtaining restrictive covenants should consider including a provision permitting the company to notify potential and subsequent employers and contracting principals of the restrictive covenants. The company can make the new employer or contractor aware of the worker’s obligations while minimizing the risk of contractual interference or other claims from the worker.

Time off is important to employee morale and productivity. However, because the Colorado Wage Act requires employers to pay for accrued but unused vacation time in an employee’s final paycheck, overly generous policies can be costly. Accrued unused vacation time is not “priceless,” and we offer three legal developments and reasons for Colorado employers to re-visit their vacation and time off policies now. 1. School Activities In 2009, the Colorado legislature passed the Parental Involvement in K-12 Education Act. The legislation requires employers to provide employees with 18 hours of unpaid leave per academic year to attend certain school activities. Many employers made one of three revisions to policies in response:  provisions creating school activities leave; statements that the existing policy was sufficient to meet the statutory requirements; or increased vacation or time off allowances to provide additional time that could be used, among other things, for school activities. Because the statute included an automatic repeal provision, it ended relatively quietly on September 1, 2015. However, many employers did not revise the changes they made to their policies. 2. “Use-it-or-Lose-it” To avoid paying out large amounts to employees at separation, many employers adopted “use-it-or-lose-it” policies. Plaintiffs’ attorneys have long taken the position that such policies violate the Wage Act by forfeiting vacation time that has been earned. In late 2015, the Department of Labor informally announced that it would target employers with “use-it-or-lose-it” policies for enforcement actions. A month later, the Department of Labor issued written guidance that seemed to temper that announcement. The guidance starts with a broad statement that “use-it-or-lose-it” policies are permissible. However, the guidance later clarifies that such a policy violates the Wage Act if it deprives employees of earned vacation time and/or wages in lieu of that time. Since most “use-it-or-lose-it” policies provide no compensation for unused vacation time that is “lost,” the guidance signifies that the Department of Labor will consider such policies to be a violation of the Wage Act. Based on the language of the Wage Act, there is a significant risk that a court would agree. 3. Final Pay Many Colorado employers have abandoned traditional sick and vacation time distinctions for paid time off that can be used for any reason. Because those policies do not distinguish between sick and vacation time, the entire paid time off allowance is considered vacation time that must be paid out in an employee’s final pay check. However, many people involved with payroll and developing policies do not realize the legal impact of such policies. Action Items for Employers Review policies for references to the Parental Involvement in K-12 Education Act, which can now be removed. Consider whether to end school activities leave policies or return time off allowances to the pre-legislation levels. Review “use-it-or-lose-it” policies with counsel and assess risks and alternatives. Consider whether alternatives to lump-sum paid time off policies will better control payouts at separation.

On August 10, 2016, a new pregnancy provision of the Colorado Anti-Discrimination Act (“CADA”) will take effect. While the CADA had previously been interpreted as prohibiting pregnancy discrimination and requiring accommodations for pregnancy, the new provision strengthens and clarifies those protections. Indeed, the amendment will require more of employers and will make it easier for plaintiffs to prevail than federal anti-discrimination law. This greater pregnancy protection, combined with the fact that the CADA was amended in 2013 to allow successful plaintiffs to collect compensatory and punitive damages (remedies previously unavailable under the CADA), make it more likely that employers will face lawsuits under the CADA. Accordingly, employers need to be especially careful to comply with the new amendment. Accommodation The bill requires an employer to provide reasonable accommodations to an applicant or employee for health conditions related to pregnancy or the physical recovery from childbirth under the following conditions: (1) an accommodation is necessary to perform the essential functions of the job, (2) the employee has requested an accommodation, and (3) the accommodation would not impose an undue hardship on the employer. As in the disability context, once an employee requests an accommodation, the employee and employer are required to engage in an interactive process. Importantly, an employer may also require a note from a licensed health care provider before providing an accommodation. While accommodations are to be tailored to the employee, the bill does give examples of reasonable accommodations, including, more frequent or longer break periods, more frequent restroom and refreshment breaks, limitations on lifting, light duty, and modified work schedule. An employer is not required to create a new position or hire additional employees to provide a requested pregnancy accommodation. However, if an employer provides or is required to provide a particular accommodation to another group of employees, the bill creates a rebuttable presumption that the same accommodations for a pregnant employee would not impose an undue hardship on the employer. Employers should also note that to preserve a pregnant employee’s ability to work, the bill prohibits an employer from requiring an employee to accept an accommodation that has not been requested or is not necessary. Similarly, the bill prohibits an employer from requiring an employee to take leave if the employer can provide another reasonable accommodation. Adverse Action The bill also prohibits taking adverse action against an employee who requests or uses a pregnancy accommodation. Significantly, the bill prohibits more employment practices than other sections of the CADA. Other sections of the CADA specifically make it improper to “refuse to hire, to discharge, to promote or demote, to harass during the course of employment, or to discriminate in matters of compensation, terms, conditions, or privileges of employment . . . ” For pregnancy, adverse action is defined as “an action where a reasonable employee would have found the action materially adverse, such that it might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” Accordingly, the bill likely covers a broader range of conduct than the other sections of the CADA. Notice To help educate employees about their rights under the new law, the bill requires employers to give new employees notice of their rights under this section at the start of employment. Further, employers are required to give current employees notice by December 8, 2016. Moreover, employers are required to post a notice in the workplace (along with the other employment law posters). Although the bill does not provide a remedy for an employer’s failure to provide notice to existing or new employees, employers should comply with those provisions. Remedies Before filing a lawsuit, an employee who believes she has suffered an adverse action or improperly denied an accommodation under the new bill must file a charge with the Colorado Civil Rights Commission within six months of the conduct. Once the employee has exhausted the administrative remedies, she may sue for back pay (up to two years reduced by what the employee could have earned with reasonable diligence), front pay, compensatory damages, and punitive damages. Action Plan In anticipation of the new bill taking effect on August 10, 2016, employers should: Review all job descriptions to ensure that they clearly identify the essential functions of each job. Review handbooks and policies to ensure that they clearly define the procedures for an employee to request a pregnancy-related accommodation. Draft the required notice of rights for distribution to current employees on or before December 8, 2016. Draft the required notice of rights for distribution to new employees. Update on-boarding policies and procedures to include providing the required notice of rights. Review the accommodations provided to other classes of employees to understand the accommodations that may be presumed reasonable for pregnancy-related accommodations. Train the employee or employees who will respond to pregnancy-related accommodation requests on the requirements of the bill. Train managers on the requirements of the new bill, including the prohibitions on taking adverse actions against employees who request or use accommodations and the prohibitions on requiring employees to accept accommodations that are unwanted or unnecessary. Update employment law postings to include a notice of rights under the bill.

In Medtronic, Inc. v. Amanda Ernst and Nevro Corporation, a state court forum selection clause in an employment agreement was not enforced, and remand to state court was denied. Because the former employer served the new employer, and the new employer removed the case before the former employee bound by the forum selection clause was served, the court ruled that the employee’s consent to removal was unnecessary and the forum selection clause was not triggered. Further, the court determined that the new employer was not a closely related party that could be bound by the employee’s contractual agreement to the forum selection clause. This case has four important lessons for employers seeking to enforce forum selection clauses in employment agreements. Parties  For many companies, the immediate impulse upon learning that a former employee has violated an employment agreement or restrictive covenant is to sue the former employee andthe new employer. Sometimes the new employer is a necessary party to stop theft and anti-competitive tactics. Other times naming the new employer is simply a matter of principle (or reflex). As the Medtronicorder demonstrates, suing a non-party to the employment agreement, such as a former employee’s new employer, can defeat enforcement of a forum selection clause and should be considered anew for each case. Joint Representation For former employees and new employers defending against lawsuits brought by former employers, sharing counsel can be efficient and cost-effective. As the Medtronicorder demonstrates, although joint representation is just one part of the closely related party analysis, it should be considered when analyzing the enforceability of a forum selection clause.   Service Especially in cases where the former employee and new employer are outside of the contractually selected forum, the same process server may not be engaged to serve the former employee and the new employer. As the Medtronicorder illustrates, it is important to coordinate service on the former employee and the new employer in cases where there is a chance of removal. Choice of Law Because of variations in state employment laws, there may be times when a company could improve its chances of enforcing one clause in a contract (e.g., forum selection and choice of law) by waiving its rights under the other clause. As this blog has pointed out before, getting too greedy can be costly – especially when it comes to enforcing restrictive covenants. Accordingly, companies should make decisions about whether to enforce a forum selection clause on a case-by-case basis. Further, a company should consult employment counsel when hiring in a new state to analyze whether to modify its existing forum selection and choice of law clauses.

On December 21, 2015, an Illinois jury awarded Miller UK Ltd. $73.6 million against Caterpillar Inc.  Miller supplied couplers for Caterpillar’s equipment, and the jury concluded that Caterpillar used its leverage as Miller’s largest customer to demand access to information that Caterpillar then used to manufacturer its own version of the coupler.  As a result of the alleged theft, Miller claimed it had to terminate roughly seventy-five percent of its workforce, close an office, and scale back a new business venture.  This lawsuit was not between an employer and an employee, but it holds important lessons for employers that operate in industries and environments with valuable trade secrets. 1.   Audit Non-Disclosure Agreements Trade secrets laws across the country provide a layer of protection for misappropriated trade secrets.  Non-disclosure and confidentiality agreements can often provide additional protection, by catching disclosures that would not be covered by trade secrets laws. In the New Year, audit company records to confirm that any company or person who has access to the company’s trade secrets and proprietary information has signed a non-disclosure or confidentiality agreement.  If any of these parties did not sign an agreement during the contracting process, get an agreement in place immediately. 2.  Review Materials In the New Year, review the company’s handbooks, policies, offer letters, and employment agreements to ensure that they prohibit theft and misappropriation of trade secrets and proprietary information from third parties (and not just the company). Not only will this hopefully prevent employees from engaging in misconduct for which the company could be held liable (i.e. engaging in misappropriation), it could help the company avoid being held liable for any misconduct that does occur. 3.  Audit Restrictive Covenants To the extent that your company has trade secrets and proprietary information that can be protected through restrictive covenants under applicable law, in the New Year, audit the company’s agreements with employees to ensure that all employees who have access to that information have signed the required restrictive covenants.  If an employee has not signed an agreement, identify what legal consideration will be required to obtain enforceable restrictive covenants. For those employees who have signed restrictive covenants, confirm that the company has signed (if required) and that the company records consist of both the employee’s signature and the body of the agreement that the employee signed.  Finally, review the company’s form restrictive covenants to ensure that they have kept up with the growth and development of the company (i.e. that they protect all of the company’s trade secrets and proprietary information) and with the latest developments in the law. 4.  Resolve In the New Year, resolve to follow the three steps above at least once per year.  As the verdict demonstrates, an ounce of prevention is worth a pound of cure.  Following a regular maintenance schedule is the best way for a company to minimize the risks associated with trade secrets and proprietary information.

Are you impressed by how conclusively the tests on CSI and similar shows solve their investigators’ cases? Apparently the Loss Prevention Manager for Atlas Logistics Group Retail Services, LLC was. When he was charged with the unenviable task of discovering which employee(s) were defecating in the company’s grocery warehouse, he decided to turn to DNA. Atlas hired a lab to swab the cheeks of employees who were scheduled to work when the incidents occurred and compared the DNA of the employees to the DNA that was left behind by the offender(s). The lab did not analyze the DNA samples to identify any propensities for disease, but the testing did identify genotypes and mutations. Two of the employees tested then protested and filed Charges of Discrimination with the Equal Employment Opportunity Commission and filed what, by all accounts, is the first lawsuit under the Genetic Information Nondiscrimination Act (“GINA”) to go to a jury. The employees who sued were not a DNA match with the samples in the warehouse, and they did not allege genetic discrimination. Rather, the case focused on GINA’s prohibition against employers requesting, requiring, or purchasing genetic information, including genetic tests, from and about employees. The statute defines genetic tests as “analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detects genotypes, mutations, or chromosomal changes.” The employees and Atlas filed cross-motions for summary judgment. Atlas argued that the DNA testing it performed was not prohibited by GINA because the testing did not analyze propensity for disease. However, the trial court rejected Atlas’s argument based on the broad wording of GINA. Because the testing analyzed DNA, the trial court found that Atlas had requested or required genetic testing and granted summary judgment for the employees.[2] In June, the trial court held a jury trial on damages. On June 22, 2015, a jury awarded the employees a total of $2.23 million. A whopping $1.75 million of that verdict was punitive damages. The remainder, $475,000, was for emotional distress damages. Atlas may challenge this verdict as exceeding the caps on awards under GINA. Even if Atlas succeeds in reducing the verdict, this case is a cautionary tale for employers. The summary judgment ruling indicates that courts will not take kindly to requesting genetic information as part of a workplace investigation. Further, because GINA prohibits purchasing genetic information, an employer acts at its peril if it pays for genetic testing or test results even if the employee volunteered the sample. Additionally, the jury’s verdict shows that juries expect employers to know and follow the law – and may not be very forgiving of violations. Like any cautionary tale, this tale can only be effective if it is shared. Employers should use this case as an opportunity to remind management, human resources, and risk management employees about the limitations imposed by GINA. In order to avoid violating other laws while complying with GINA, employers should also remind employees of the federal, state, and local laws on audio and visual surveillance.

On June 15, 2015, the Colorado Supreme Court held that the Colorado Lawful Activity Statute does not prohibit an employer from terminating the employment of an employee for off-the-job use of medical marijuana.  However, this may not be the last challenge to Colorado employers’ drug policies. In Coats v. Dish Network, L.L.C., case no. 13SC394, Brandon Coats challenged his termination by Dish Network, L.L.C. after he tested positive for marijuana.  Coats, a quadriplegic, held a license from the State of Colorado to use medical marijuana pursuant to the state’s Medical Marijuana Amendment to the Colorado Constitution.  Coats alleged that he used medical marijuana within the limits of the license, and never on his employer’s premises.  He further alleged that he was never under the influence of marijuana at work. Coats challenged his termination as a violation of the Lawful Activities Statute, C.R.S. section 24-34-402.5, which prohibits an employer from discharging an employee for “engaging in any lawful activity off the premises of the employer during nonworking hours,” subject to certain exceptions.  Dish filed a motion to dismiss the lawsuit, arguing that the use of medical marijuana was not “lawful activity” because it was prohibited under both state law and federal law.  The trial court granted the motion and dismissed the case because Colorado’s Medical Marijuana Amendment created an affirmative defense to criminal charges arising from medical marijuana use rather than making medical marijuana use legal.  Coats appealed to the Colorado Court of Appeals. On April 25, 2013, a majority of the Colorado Court of Appeals held that Coats had not stated a claim for relief under the Colorado Lawful Activities Statute because medical marijuana use was prohibited by federal law and thus was not a “lawful activity” for purposes of C.R.S. section 24-34-402.5.  One Judge dissented from the majority’s opinion, stating that he would have held that the term “lawful” in section 24-34-402.5 refers only to Colorado state law and that medical marijuana use is protected by the Colorado Lawful Activities Statute because such use is lawful under Colorado law. Coats appealed this decision to the Colorado Supreme Court, which issued its opinion on June 15, 2015.  The Colorado Supreme Court began its analysis by determining the generally understood meaning of “lawful.”  The Colorado Supreme Court agreed with the Court of Appeals that the commonly accepted meaning of lawful is “not contrary to or forbidden by law.”  Next, the court concluded that the term “lawful” in the Colorado Lawful Activities Statute is not limited to activities that are permitted by Colorado law.  Instead, the Lawful Activities Statute protects activities that comply with the applicable state and federal laws.  While the court noted that the United States Department of Justice announced that it will not prosecute patients who are using medical marijuana in accordance with state law and that Congress passed an act prohibiting the Department of Justice from using public funds to prevent states from implementing their own medical marijuana laws, marijuana use is still prohibited under the federal Controlled Substances Act.  Because the Court concluded that Coats’s medical marijuana use was not protected by the Lawful Activities Statute, the Court did not address whether Colorado’s Medical Marijuana Amendment makes medical marijuana use “lawful” by conferring a right to such use.  Previous statements by counsel who represent employees in Colorado suggest that, despite the ruling in Coats, they may pursue two avenues to attack terminations based on marijuana use.  First, counsel for employees may challenge terminations of employees who engage in recreational marijuana use under the Colorado Lawful Activities Statute.  Although recreational marijuana use is illegal under federal law just like medical marijuana use, employees may raise challenges under the Lawful Activities Statute based on the language in the Colorado recreational marijuana amendment stating that it is not “unlawful” nor an “offense under Colorado law” for people twenty-one years of age or older to use marijuana for non-medical purposes.  Second, counsel for employees may challenge medical and recreational marijuana terminations as tortious wrongful terminations in violation of public policy.  In other words, employees would argue that they were terminated in retaliation for exercising alleged constitutional rights to use marijuana. Colorado employers should continue to monitor this area of the law.