On December 1, 2017, the newly appointed National Labor Relations Board (“NLRB”) General Counsel, Peter Robb, issued a memorandumstyled GC Memorandum 18-02 (the “Memorandum”), which provides insight into his likely agenda as General Counsel. While the Memorandum is relatively brief, it suggests that Mr. Robb may seek to revisit some of the policy decisions rendered by President Obama’s NLRB. The Memorandum instructs the NLRB’s Regional Offices to seek “alternative analysis” from the NLRB's Division of Advice regarding 15 separate issues before issuing Complaints, including matters that involve employer handbook rules; joint employer status; off-duty employee's access to property; protected work stoppages; expanded application of an employee's Weingarten rights; disparate treatment of represented employees during contract negotiations; establishing a duty to bargain before imposing discretionary discipline where parties have not executed initial collective bargaining agreement; dues checkoff; and appropriate remedies. The Memorandum also rescinded seven prior General Counsel Memoranda. Employers will be encouraged to note that the Memorandum expressly rescinds General Counsel Memorandum 15-04, which had barred employers from promulgating a host of seemingly innocuous rules in employee handbooks on the grounds that the rules could conceivably chill employees from exercising their Section 7 rights. Moreover, the Memorandum ended a number of initiatives that were pursued by President Obama’s NLRB, including efforts to extend NLRB decisions to electronic systems regularly used in the course of work. Employers have a number of reasons to be optimistic about the Memorandum, as it seems to portend a more employer-friendly agenda than the previous administration. However, the full implications of Mr. Robb’s tenure will more clearly be seen via Complaints that are proffered and NLRB decisions that are rendered. We will continue to report on NLRB cases and decisions here, so stay tuned.

In a post-Defend Trade Secrets Act world, employers have a host of civil remedies available to them for the misappropriation of trade secrets under both state and federal law. To obtain relief, an employer must establish that the information it claims is subject to trade secret protection is, in fact, protected as confidential and secret. Below we outline five actions an employer might consider to demonstrate it has taken the necessary measures to protect the secrecy of its confidential information. Written agreements with employees who have access to trade secrets.These agreements may contain confidentiality, non-disclosure, non-solicitation, or non-competition provisions. To be effective, it is critical that such agreements define clearly what constitutes “confidential information,” and include a clause affirmatively requiring the return of such “confidential information” upon the termination or resignation of the employee. Written policies governing employee conduct.Employers should set forth clear rules for marking and maintaining confidential information, such as written instructions related to copying and sharing of confidential information. Employers can also include restrictions on the sharing or disclosure of confidential information in employee handbooks or other policies that are shared with all employees. Limiting employee access to trade secrets.This may include limiting physical access to documents stored in hard copy, by, for example, limiting locations where the confidential information is maintained, locking those locations, and tracking individuals accessing the information. Employers should also take care to protect electronically-stored information by, for example, employing password protection on documents and databases containing confidential information, restricting access to such documents on external devices, and implementing security monitoring measures. Limiting outsiders’ access. Similarly, employers should limit outsider access to areas housing confidential physical documents and devices with access to electronically stored information. Depending on the information, this may include the use of security guards or cameras, perimeter fencing, visitor badges with log in and out procedures, and security card access to certain areas. Controls on public dissemination.Employers may consider designating an employee to review and approve publicly disseminated information, including publications, presentations, promotional materials, and website content to ensure trade secret information is not inadvertently disclosed. Employers should also carefully evaluate the scope of information shared in meetings with potential partners or customers, and may further consider requiring meeting participants to enter into non-disclosure agreements if confidential information must necessarily be shared. Employers should remember that any security measures should be regularly monitored, audited, and updated to maintain their effectiveness. Efforts to maintain these procedures may pay dividends should the employer have to pursue a former employee for trade secret theft.

The Bakery & Confectionery Union and Industry International Pension Fund (“B&C Fund”) has been underfunded for many years. Indeed, since the bankruptcy of Hostess Corporation in 2012, the B&C Fund’s financial position has worsened. The assets of the B&C Fund currently comprise only 37 percent of its liability. Stated differently, the B&C Fund has only 37 cents to pay for each dollar of vested benefits to employees and retirees. Employers also continue to leave the B&C Fund, and the demographics of the B&C Fund reflect a high ratio of retirees in relation to active employees. The B&C Fund’s actuaries estimate that the fund will become insolvent 13 years from January 1, 2017. In an effort to address its funding deficiency, the B&C Fund has invited contributing employers to a meeting to be held in December 2017 regarding a possible new “two-pool” program. The two-pool program will likely be similar to the program adopted by the New England Teamsters Pension Fund. Thus, employers who join the new pool will likely pay a withdrawal liability amount, possibly on a discounted basis, for past unfunded liability. They will then join the “new pool,” which will be funded at a very high rate—with reduced benefits—to prevent future unfunded liability problems like those in the present plan. In theory, employers who join the new pool will be shielded from additional liability payments should the B&C Fund become insolvent and suffer a mass withdrawal. A new two-pool proposal might offer benefits for contributing employers to the B&C Fund, although it is unlikely to be a panacea for the Fund’s long term financial problems. Nevertheless, the B&C Fund’s two-pool proposal may mark the first significant proposal by a large multiemployer pension plan since the proposal suggested by the Central States Pension Fund was rejected by the Pension Benefit Guaranty Corporation (“PBGC”) and The Treasury Department during 2016. Employers that contribute to the B&C Fund should explore any new two-pool program carefully. Among other things, employers should ask whether a discount of present withdrawal liability will be offered to employers who enter into the new pool, either for an initial lump sum payment or for payment over time. Employers should also determine whether the B&C Fund and the PBGC will provide written assurances that employers who pay current withdrawal liability as a condition to entering the new pool will be shielded from additional withdrawal liability should the B&C Fund face insolvency and mass withdrawal in the future. Lastly, employers should inquire whether there will be a partition plan included in the two-pool program that will separate benefits for “orphaned” employees of Hostess and other employers who are no longer contributing to the B&C Fund. Stay tuned to the Polsinelli at Work blog, where we will provide further updates regarding the “two-pool” program as they become available.

This week, the United States Supreme Court heard oral argument in Digital Realty Trust, Inc. v. Somers to consider whether the Dodd-Frank Act (“Dodd-Frank”) protects internal whistleblowers and, more broadly, regulatory agencies’ power to interpret federal statutes. The Court’s decision could impact an employer’s ability to terminate employees who report concerns of malfeasance internally, and give agencies the power to circumvent Congress’ legislative authority. In Digital Realty, the employer terminated an employee after he internally reported alleged corporate malfeasance. The employee then filed suit, claiming that his termination violated Dodd-Frank’s anti-retaliation provision. Dodd-Frank prohibits retaliation against a “whistleblower” – defined as any individual who provides information relating to a violation of securities laws to the Securities and Exchange Commission (“SEC”), in a manner established, by rule or regulation, by the SEC. In 2011, the SEC interpreted Dodd-Frank’s “whistleblower” definition to include those who make internal reports.  The SEC’s interpretationis impactful – since 2012, 83% of whistleblowers who have received judgments first reported internally to their company and then later to the SEC. The employer in Digital Realty moved to dismiss the employee’s Dodd-Frank retaliation claim, arguing that Dodd-Frank only protects those who provide information to the SEC and not those who internally report violations. The district court denied the employer’s motion and the Ninth Circuit affirmed. If the Supreme Court agrees with the Ninth Circuit, employers may be subjected to further litigation when terminating employees who have internally reported concerns related to Dodd-Frank. Moreover, regulatory agencies could perceive they have greater leeway to interpret legislation. As political affiliations within agencies change, so too could the agencies’ interpretations of statutes. Under such a scenario, employers would need to pay close attention to agency interpretations to minimize legal exposure. Conversely, the Court could strictly interpret Dodd-Frank and limit agencies’ powers, giving strength and certainty to express legislative enactments. Regardless, employers should be mindful of the Court’sDigital Realty decision because it will impact whistleblower litigation and may provide a preview to this Court’s treatment of future employment law cases. Keep watching the Polsinelli at Work blog for more updates regarding this matter.

On November 26, 2017, New York City will join other cities, such as San Francisco and Seattle, when its predictive scheduling laws take effect and require retail employers to give employees a minimum amount of advance notice of their work schedule. Covered retail employers will be required to provide employees with written schedules at least 72 hours before the first shift on the work schedule and to conspicuously post the schedule at least 72 hours before the beginning of the scheduled hours of work. Employers must also update the schedule and directly notify affected employees after making changes to the work schedule, as well as transmit the work schedule electronically, if that is how schedules are regularly communicated. Which Retailers Are Covered? This legislation applies to “retail businesses,” which are defined as entities with 20 or more employees engaged primarily in the sale of consumer goods at one or more stores within the city. The good news for small retailers is that the law does not impact single location, “mom and pop” shops that have fewer than 20 employees. For purposes of the legislation, “employees” are defined as full-time, part-time and temporary employees (including seasonal/holiday workers). If the number of employees fluctuates (over the holidays, for example), the number of employees is determined for the current calendar year based upon the average number of employees who worked for compensation per week during the preceding calendar year. If the employer operates a chain business, then the total number of employees in that group of establishments must be counted. “Consumer goods” means products that are primarily for personal, household, or family purposes, such as appliances, clothing, electronics and groceries. What This Means for Retail Employers This holiday season, the flexibility of retail employers when scheduling shifts to meet day-to-day business needs is about to change, just as retailers hit the busiest time of the year. Retail employers will not be permitted to: Schedule an employee for an on-call shift; Cancel a regular shift for a retail employee within 72 hours of the scheduled start of such shift; Require a retail employee to work with fewer than 72 hours’ notice, unless the employee consents in writing; and Require a retail employee to contact a retail employer to confirm whether or not the employee should report for a regular shift fewer than 72 hours before the start of such shift. The law also requires retail employers to provide an employee, upon request, with his/her work schedule, in writing, for any week the employee worked within the prior three years. Upon request, retail employers will also be required to provide the most current version of the work schedule for all employees at that work location, regardless of whether changes to the work schedule have been posted. What Remains the Same for Retail Employers Some important scheduling flexibility will remain intact for retail employers. For example, employers will still be able to give an employee time off at the employee’s request and/or allow an employee to trade shifts with another employee. Retail employers may also make changes to employees’ work schedules with less than 72 hours’ notice if the employer’s operations cannot begin or continue due to matters beyond their control, such as: Threats to the retail employees or the retail employer’s property; Failure of public utilities or the shutdown of public transportation; Fire, flood or other natural disaster; or State of emergency declared by the president of the United States, governor of the state of New York or mayor of the city. Penalties for Violations Employers are subject to penalties equal to the greater of $500 for each affected employee or the employee’s actual damages. For failing to provide and post work schedules, employers are subject to penalties of $300 for each affected employee. Other remedies are also available, including injunctive and declaratory relief, and attorneys’ fees. Conclusion When the law takes effect on November 26, New York will be the latest city to enact a predictable scheduling law, but it will not likely be the last. San Francisco, Seattle and other municipalities have enacted similar laws and the trend continues to grow. National retailers that rely on fluid personnel schedules should check the jurisdictions in which they operate to ensure they are in compliance with applicable law.

Employers across the country should think twice before asking job applicants about their salary history. As we reported earlier this year,  a number of state legislatures (and some local governments) considered legislation this past session designed to prohibit inquiries into wage history, in an effort to fight wage discrimination and the gender pay gap. Philadelphia's ordinance is currently on hold pending a legal challenge. However, New York City's law became effective on October 31, 2017, and the city recently released guidelines for both employersand employees regarding proper--and improper--inquiries.  Albany County, New York also recently banned inquiries regarding wage history; the ordinance was signed by the County Executive on November 6, 2017 and will become effective 30 days after filing with the New York Secretary of State. Likewise, San Francisco enacted a salary history ban ordinance this summer. A ban on such inquiries will go into effect for the entire state of California effective January 1, 2018. Asking about applicant's salary history in Oregon is prohibited effective October 2017 (although some provisions of the law will not be effective until 2019) and the law in Puerto Rico also became effective earlier this year. Delaware's statute becomes effective in December 2017. Moreover, the Illinois legislature passed a salary history ban this past term, but Governor Bruce Rauner vetoed the legislation. The Illinois House of Representatives voted to override the veto, but earlier this month the Senate failed to obtain the votes needed to override the veto. Governor Rauner stated that he was not opposed to the legislation, but wanted the law to more closely match what had been enacted in other states, such as Massachusetts, where an employer may ask about wage history after an applicant has been offered a job. Governor Rauner's objection to the Illinois legislation highlights a significant issue for employers: differences between laws enacted in various jurisdictions where a company may have employees. While the law in one jurisdiction (such as Delaware and New York City) may allow an employer to ask an applicant about salary expectations, the law in other jurisdictions is not so clear. Similarly, while California and New York City allow employers to take voluntarily disclosed salary history into account, laws in other jurisdictions are silent as to whether (and how) voluntarily disclosed salary history may be used by the employer. It is widely expected that the Illinois legislation will be reintroduced in the upcoming legislative session. In addition, a number of other states (including Idaho, Maryland, New York, Rhode Island, Texas and Virginia) will likely re-visit the issue during their respective 2018 legislative sessions. Consequently, employers wishing to act proactively should consider taking the following steps as part of their routine interviewing and hiring practices: Eliminate wage history questions from job applications, especially those that are used in multiple jurisdictions; Train both hiring managers and human resources personnel regarding what inquiries are permissible in a given jurisdiction, taking into account that in some instances an applicant may reside in a state with a different law than that of the physical location of the company headquarters or the individuals involved in the hiring decision; Evaluate how wages are set for particular positions and create salary bands based on market wage conditions; and Create a system of documenting when an applicant voluntary discloses salary information to insure compliance with laws.

With the smells of turkey, stuffing, and cranberry sauce about to fill kitchens across the country next week, people are getting ready for the holiday season. And as Norman Rockwell has taught us, nothing says the holidays more than a blanket of snow on the ground. But what happens when that blanket of snow prevents employees from reporting to work? Or, even worse, causes an employer to shut down its business for the day? Do you, as an employer, still have to pay your employees? As with most compensation issues, the answer depends on whether the employee is exempt or non-exempt. If weather conditions cause an employer to shut down operations and close, exempt employees are still entitled to pay for the duration of the closing, assuming the business is closed less than a workweek. The rationale is that the exempt employee is available for work, but it is the employer who has made the work unavailable to the employee. On the other hand, when an employer closes shop due to inclement weather, non-exempt employees are not entitled to wages during the closing. Of course, the employer has the discretion to allow non-exempt employees to use PTO during the closing. But what happens when the employer remains open despite inclement weather, and the employee does not report to work? If the employee is classified as non-exempt, the same rules apply – the employee is not entitled to wages during the absence, but the employer has the discretion to allow the non-exempt employee to use PTO for the absence. As for exempt employees, the answer can be a little more complicated. An exempt employee who stays home even though the employer is open for business is not entitled to pay for that day because the employee chose to remove him or herself from the workplace for personal reasons. If the employer has a PTO policy and the employee has accrued time, the employee can use PTO to cover his or her absence. In the event the employee has no accrued PTO available, the employer can reduce the employee’s pay for the absence—in full-day increments only—without violating the salary-basis test of the FLSA. However, this assumes that the exempt employee performs no work during the day while away from the office. If the exempt employee performs any work from home (e.g., answering emails, taking calls, working on the computer, etc.), the exempt employee is working and, thus, is entitled to his or her full salary for that day. Now, if the employee only works from home during some of the work day and takes some work time off, the employer may make deductions from the exempt employee’s PTO bank for the time not worked. However, the employee must still be compensated for the entire day of work – even if the employee does not have enough PTO in his or her bank to cover the partial day. It is imperative to ensure employees are properly compensated during inclement weather – particularly exempt employees so there is no risk of losing the exemption. Of course, it is recommended to engage qualified wage and hour counsel to help you navigate this tricky compensation area.

In recent months, we have written about the limits Article III places on plaintiffs bringing Fair Credit Reporting Act (FCRA) claims. (Seehere, here, and here). In October, two federal district courts further illustrated these limits by dismissing FCRA actions based on lack of Article III standing. In Saltzberg v. Home Depot, U.S.A., Inc., 2017 WL 4776969 (C.D. Cal. Oct. 18, 2017), the plaintiff completed the employer’s disclosure and authorizations forms, which consisted of two pages. The plaintiff alleged that the background check authorization was invalid because the two forms constituted one document and thus the employer violated the FCRA’s standalone disclosure requirement.See 15 U.S.C. § 1681b(b)(2)(A)(i). The court dismissed the plaintiff’s claim for failure to allege Article III standing. It concluded that the plaintiff’s complaint merely contained “an allegation of a statutory violation, not an injury-in-fact.” Such a “violation of the FCRA is insufficient without connecting it to a concrete injury.” A Florida federal district court reached a similar conclusion in Riley v. United Parcel Serv. of Am., Inc.,Case No. 6:17-cv-00254, Dkt. 58 (M.D. Fl. Oct. 2, 2017). In Riley, the employer made a conditional offer to the plaintiff, which it subsequently rescinded based on the results of a background check. The plaintiff brought FCRA claims against the employer for failure to provide him with: (a) a pre-adverse action notice before rescinding the offer; (b) a copy of the background report; and (c) a description of rights under the FCRA. While the employer’s background check provider furnished this information to the plaintiff, he contended that disclosure from the provider “cannot take the place of the notice UPS was required to provide[.]” The plaintiff claimed to have suffered a concrete injury because the employer failed to provide the requisite information, and the employer’s non-compliance “deprived him of the opportunity to learn of the charges against him and … tell[] [the employer] his side of the story.” The employer moved to dismiss, arguing that the plaintiff lacked Article III standing because he did not allege his consumer report was inaccurate, and he received all of the required information, albeit it not from the employer. The court granted the employer’s motion because the plaintiff did not adequately allege “a harm or a material risk of harm that Congress identified or intended to curb when it passed the FCRA.” It reasoned that the plaintiff did not sustain a cognizable “informational injury” because “he was already in possession of [the required] information” even though he received it from a third party. Moreover, the court disregarded the plaintiff’s “conclusory assertion that he had no opportunity to learn of the charges against him or that he was prevented from discussing the contents of his consumer report with [the employer] before it revoked its conditional job offer.” What This Means for Employers As discussed previously on this blog, courts throughout the country continue to address the contours of Article III standing in the context of the FCRA. Compliance is the best defense to such actions, and employers should analyze their background check disclosure and authorization forms to avoid costly class litigation. Employers faced with FCRA litigation should consult with experienced counsel to explore the potential for early dismissal based on lack of Article III standing.

On November 7, 2017, the U.S. House of Representatives voted on and passed the Save Local Business Act, H.R. 3441 (the Act). If passed by the Senate and signed into law by President Trump, the Act would reverse a National Labor Relations Board (NLRB) decision that expanded the definition of what entities can be considered “joint employers” for purposes of the National Labor Relations Act (NLRA). The House’s passage of the Act is welcome news for entities that may have been considered “joint employers” pursuant to the NLRB’s 2015 standard set forth in Browning-Ferris Industries of California Inc., which expanded joint employer liability to employers that exercised or possessed “indirect control” over aspects of another employer’s workforce, such as contractors, franchisees, or staffing agency employees. If signed into law, the Act would undo the NLRB’s Browning-Ferris decision and amend both the NLRA and the Fair Labor Standards Act (FLSA) to provide that an employer is only jointly liable for a business partner’s violation of law when it exercises “direct control” of the partner’s workers. This more limited definition encourages employers to enter into profitable relationships with business partners because there is less fear of becoming liable for the other employer’s bargaining responsibilities and employment law violations. Note the Act faces a tough road in the Senate, where it will need the backing of at least eight Democrats to avoid a filibuster. A companion bill has yet to be introduced in the Senate. The Act marks the latest effort to reverse the controversial Browning-Ferris decision, which is currently on appeal in the D.C. Circuit. It also comes as the U.S. Supreme Court has been asked to take up a decision expanding joint employer under the FLSA. We will continue to monitor the Act’s progress, as well as the Browning-Ferris case as it winds its way through the courts.

Many states allow businesses to require employees to sign agreements restricting their competitive activities following the termination of employment. Such restrictive covenant agreements, including non-competition and non-solicitation agreements, can be great tools to protect an employer’s business interests. Business owners should keep the following in mind to increase the chances that the restrictive covenant agreements are enforced: What is the employer’s protectable interest? An employer generally must set forth a protectable interest to justify the prohibitions contained in a restrictive covenants agreement. Protectable interests can include trade secrets, customer relationships and customer-related information, and confidential business information. If an employee does not have access to confidential business information or trade secrets, or does not have access to client information or contact with clients, a restrictive covenant agreement may not be enforceable against that employee.  Are the geographic, temporal, and/or customer restrictions contained in the restrictive covenant reasonable? Overbroad restrictions will generally not be enforced. For example, a restrictive covenant preventing an employee from working anywhere within the United States following the end of his or her employment is often not enforceable (with limited exceptions). Likewise, a restriction preventing an employee from contacting any/every customer of the business may also not be enforceable with respect to customers with whom the employee had no material contact during his or her employment.        Did the employee receive adequate consideration for entering into the agreement? In some states, continued employment is not sufficient consideration for a restrictive covenant agreement. In other words, in those states, the restrictive covenant agreement must be supported by additional consideration separate and apart from continued employment to be enforceable.  Also, remember that restrictive covenant agreements should be signed by both the employee and a representative of the company to be a binding contract. While restrictive covenant agreements can be useful tools to protect your business, they are considered restraints of trade, and courts may look for reasons to either lessen their impact or strike them outright. Carefully drafted agreements are more likely to be enforced, protecting a business from former employees who may seek to exploit the knowledge gained and relationships cultivated on behalf of a new employer.

Neither Title VII nor the Missouri Human Rights Act (the “MHRA”) expressly prohibits discrimination on the basis of sexual orientation. In a prior post, we discussed a developing theory adopted by courts and administrative agencies that extends Title VII protections of sex discrimination to LGBTQIA individuals on the basis of nonconformance to gender stereotypes. The Missouri Court of Appeals recently held for the first time that the MHRA similarly supports a sex-stereotyping theory and that “[s]ex-based stereotyping can give rise to an inference of unlawful discrimination.” In Lampley v. Missouri Commission on Human Rights, an employee filed a Charge of Discrimination alleging that his employer discriminated against him on the basis of sex. The employee alleged that, as a gay male, his behavior and appearance contradicted the stereotypes of maleness held by his employer, and the employer treated him differently from employees who conformed to gender stereotypes. The Missouri Commission on Human Rights (“MCHR”) terminated its investigation into the employee’s complaints and did not issue a right to sue letter on the grounds that it lacked jurisdiction over the claims because they were based on sexual orientation. The employee petitioned the trial court for administrative review, which granted summary judgment in favor of the MCHR on the grounds that sexual orientation and gender stereotyping are not recognized under the MHRA. The Court of Appeals for the Western District of Missouri acknowledged that claims of discrimination based on sexual orientation are not covered by Missouri law. Reversing the trial court, the Court of Appeals held that the MHRA does, however, prohibit sex-based stereotyping that deprives persons of rights based on traits unique to one’s sex (real or perceived). The Court of Appeals found that the employee’s sexual orientation was merely incidental to the underlying claim of sex discrimination. Whether the employee is “gay neither precludes nor insures his MHRA protections.” The Court of Appeals further held that: "If an employer mistreats a male employee because the employer deems the employee insufficiently masculine, it is immaterial whether the male employee is gay or straight. . . . a sex stereotyping analysis does not create a new suspect class, but simply recognizes the manifold ways sex discrimination manifests itself. The MCHR seems to fear that gay and lesbian employees will assert sex stereotyping in lieu of a sexual orientation claim. That is, the MCHR fears sex stereotyping will be a mere pretext. But the issue before this court is simply whether material issues of fact prevent the entry of judgment as a matter of law. Whether the claim is mere pretext is a question for the trier of fact." The case was remanded to the trial court with instructions for the MCHR to issue a right to sue letter, which will allow the employee to pursue his claims in court. The MCHR may request rehearing or transfer to the Missouri Supreme Court for further review. This ruling potentially broadens the scope of actionable claims under the MHRA. Employers should review and consider revising their policies and procedures regarding non-discrimination, harassment, equal employment, and benefits to conform to recent decisions regarding sex-stereotyping and other legal developments.

On October 30, 2017, the U.S. Department of Labor (DOL) filed an appeal in the United States Court of Appeals for the Fifth Circuit of the August 31, 2017 ruling by the United States District Court for the Eastern District of Texas that invalidated proposed revisions to the Fair Labor Standards Act (FLSA) overtime regulations. Judge Mazzant of the ED of Texas previously issued a nationwide injunction preventing implementation of the regulations that were to take effect on December 1, 2016. According to a DOL statement, “On October 30, 2017, the Department of Justice, on behalf of the Department of Labor, filed a notice to appeal this decision to the U.S. Court of Appeals for the Fifth Circuit. Once this appeal is docketed, the Department of Justice will file a motion with the Fifth Circuit to hold the appeal in abeyance while the Department of Labor undertakes further rulemaking to determine what the salary level should be.” The regulations would have approximately doubled the minimum salary requirement for an employee to meet the requirements of the executive, administrative, and professional exemptions to the minimum wage and overtime requirements under the FLSA (the so-called “white collar” exemptions). Employers applauded when Judge Mazzant issued the nationwide injunction. Employers were further encouraged when the DOL published a Request for Information (RFI) regarding the overtime final rule in July of 2017. The comment period for the RFI has ended, and the DOL is reviewing those submissions. Based on the statement issued, the DOL’s appeal appears designed to provide additional time to rewrite the overtime rule and potentially render the Fifth Circuit litigation moot. We continue to monitor these developments and will provide information and analysis as it becomes available.

On September 7, 2017, the U.S. Court of Appeals for the Eleventh Circuit determined that different treatment based on an employee’s breastfeeding is prohibited by the Pregnancy Discrimination Act (“PDA”). In Hicks v. City of Tuscaloosa,No. 16-13003, the plaintiff worked for a police department, and only eight days after she returned from job-protected pregnancy leave, the plaintiff was reassigned from the narcotics task force to the patrol division. Along with a reduction in pay and different job duties, the plaintiff’s new position as a patrol officer required that she wear a ballistic vest all day, which was not required in her prior position in the narcotics task force. Before plaintiff began work in the patrol division, her doctor wrote a letter recommending that she be considered for alternative duties because the ballistic vest was restrictive and could cause breast infections that would lead to an inability to breastfeed. The police chief offered the plaintiff a safe beat with access to lactation rooms and priority in receiving breaks. However, the police chief refused to consider the request for alternative duty and informed the plaintiff that she could either wear a specially fitted vest or not wear a vest at all. The plaintiff viewed specially fitted vests as ineffective because of the gaping holes they left, and believed that not wearing a vest was too dangerous. Accordingly, she resigned that day and subsequently filed suit. Among other issues, the Eleventh Circuit addressed whether the plaintiff was constructively discharged when presented with alternative options for ballistic vests. The court observed that Title VII of the Civil Rights Act, as amended by the PDA, prohibits discrimination “on the basis of pregnancy, childbirth, or related medical conditions.” The court was tasked with determining whether breastfeeding qualified as a “related medical condition[],” and found that it did. The court explained that the PDA includes a broad catchall phrase, and that it is “a common sense conclusion” that breastfeeding is a gender-specific condition covered by that phrase. Indeed, breastfeeding “clearly imposes upon women a burden that male employees need not – indeed, could not, suffer.” The court also emphasized the U.S. Supreme Court’s prior conclusion that the entire purpose behind the PDA is to guarantee women the basic right to participate fully and equally in the workforce, without being denied the right to full participation in family life. When holding that the PDA covered physiological conditions post-pregnancy, the court observed that the PDA would be rendered a nullity if women were protected during pregnancy, but could be thereafter terminated for breastfeeding attendant to that pregnancy. The Eleventh Circuit added the caveat, however, that its ruling did not require that employers provide special accommodations to breastfeeding workers. The plaintiff in Hicks had not sought a special accommodation, but rather “alternative duty,” which her employer had previously granted to employees with temporary injuries. This decision is a critical reminder to employers to act with caution when pregnant or breastfeeding employees request job-related accommodations. Failure to act in conformance with the PDA risks exposure to legal liability, so employers would do well to consult with counsel during the interactive process.

On October 23, 2017, a National Labor Relations Board (NLRB) Administrative Law Judge (ALJ) ruled that Heartland Coca-Cola Bottling Co. (Heartland) unlawfully fired a union steward who uttered profanity during a meeting attended by company executives and employees. While the company argued the union steward was terminated for violating a work rule prohibiting misconduct, the ALJ determined the union steward’s comments were sufficiently related to his fellow union members’ working conditions, and remained protected activity under the National Labor Relations Act (NLRA). The case arose when Heartland experienced a backlog of customer orders and told its employees, who were represented by the Teamsters, they would have to work “extensive overtime.” In early March, 2017, Heartland needed workers to assist with back orders on a Friday, which typically was a group of employees’ day off. Problematically for Heartland, the company inadvertently did not provide the group of workers with advance notice of the need for overtime. Without such advance notice, Heartland could not require the employees to work on their scheduled day off. The Teamsters suggested Heartland ask for volunteers to work. No one volunteered, so Heartland convened a meeting to discuss the need for employees to work overtime. During the meeting, the union steward spoke. He urged his fellow union members to “step up” and help, and then added, “If you come in, do your business, do what you need to do, and if they [Heartland] lie to you and you’re still doing 16 hours, f--- ‘em.” The union steward was fired soon thereafter, and the Teamsters filed unfair labor practice charges, contending the union steward was terminated for engaging in statutorily-protected activity. The ALJ sided with the Teamsters. When ruling the union steward was unlawfully terminated, the ALJ explained that an employee who discusses terms and conditions of employment during a meeting with management is engaged in protected activity. Furthermore, the union steward’s use of profanity did not destroy this protection, as the profanity was not “sufficiently egregious or opprobrious.” Moreover, the comments occurred in a meeting with employees and management, and were tied to the union steward’s discussion of the employees’ conditions of work. Accordingly, the unfair labor practice charge was sustained, and the ALJ required Heartland to reinstate the union steward without prejudice to his seniority. Heartland was also required to compensate the union steward for any “search for work” or “interim employment expenses, regardless of whether those expenses exceed his interim earnings.” This decision reminds employers to tread carefully when considering whether to reprimand or otherwise discipline an employee for crass or profane speech in the workplace. To the extent the employee may have advocated on behalf of themselves and others regarding terms and conditions of employment, that speech, however untoward, could be protected. Disciplining or terminating that employee would risk an unfair labor practice charge.

As the 2017 California legislative session comes to an end, employers are faced with new employment laws added to the labyrinth of California employment compliance. Governor Brown recently signed into law six new statutory obligations that take effect on January 1, 2018*: 1. Ban on Salary Inquiries- Applicant’s Prior Salary History (AB 168): California is the eighth state and/or local government to prohibit inquiries into an applicant’s salary history. AB 168 enacts Labor Code section 432.3, which makes it unlawful for California employers to ask job applicants about their salary history, including benefits and/or other compensation information. California employers were already precluded from using an applicant’s salary history to justify a pay disparity (Labor Code section 1197.5). However, the addition of section 432.3 creates potential liability for employers if they ask about salary history when interviewing, extending job offers and/or deciding how much to pay applicants. To the extent that an applicant voluntarily provides their salary history, an employer may consider the information, but should do so with great care to avoid any hint of impropriety which could lead to a potential claim. Section 432.3 makes California the first state to require an employer to provide the pay scale of a position to an applicant upon “reasonable request.” The law is silent as to what constitutes a “reasonable request.” We expect to see guidance from the legislature and/or the courts in the coming months to identify the specific facts and/or circumstances that would trigger this employer obligation. 2. Parental Leave for Small Employers and Parental Leave Mediation Program (SB 63) The California Family Rights Act (“CFRA”) has long provided child bonding parental leave to employees at companies with 50 or more employees. However, California Senate Bill 63 (codified as Section 12945.6 of the California Government Code), the “New Parent Leave Act,” extends CFRA rights to employees working at locations with at least 20 employees within a 75 mile radius. Identical to CFRA, an employee under the New Parent Leave Act must have at least 12 months of service with a covered employer and at least 1,250 hours of service during the 12-month period prior to his/her leave to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption or foster care placement. The new statute also establishes a parental leave pilot mediation program through the Department of Fair Employment and Housing (“DFEH”) for the resolution of claims related to parental leave. Specifically, the program permits an employer to demand mediation within 60 days of receiving a “right-to-sue” letter from the DFEH. Until 2020 (when the trial period of the program is currently scheduled to end), an employee will be prevented from pursuing a private civil action until the mediation is complete or the parties determine that mediation will be fruitless. 3. “Ban The Box”-Conviction History of Applicants (AB 1008) California officially joins the ever-growing list of states that have adopted “ban-the-box” laws limiting employers’ ability to review and/or consider an applicant’s prior criminal conviction history. As a result, the California Fair Employment and Housing Act (“FEHA”) has been amended to prohibit employers with 5 or more employees from inquiring into, seeking disclosure of, or considering an applicant’s conviction history until after the applicant receives a conditional offer of employment. Specifically, this new “ban-the-box” law prohibits California employers from making hiring decisions based on an applicant’s criminal conviction records. Few exceptions apply, limited to the following positions and/or circumstances: (1) criminal justice agencies; (2) farm labor contractors; (3) criminal background check, conviction history or restriction of employment based on an applicant’s criminal history as required by state, federal or local law. The state-wide “ban-the-box” provision mimics the “fair chance” process that is required in San Francisco before an employer can deny employment based on an applicant’s conviction history. To the extent that California employers do not comply with this new legislation and the accompanying “fair chance” process, they will be at risk for claims under the FEHA. Accordingly, an applicant denied employment based on conviction history may file a claim for violation of the FEHA before the DFEH. 4. Additional Harassment Training on Gender Identity, Expression & Sexual Orientation (SB 396) Senate Bill 396 requires California employers with 50 or more employees to expand their mandatory biennial sexual harassment prevention training for supervisory/managerial employees to include the topics of gender identity, gender expression and sexual orientation. This training must include practical examples to address such harassment. Covered employers must also post a DFEH-approved poster for all employees to review regarding transgender rights. 5. Immigration Worker Protection Act (AB 450) Governor Brown recently signed legislation limiting the coordination between local and state law enforcement and federal immigration officials. To mirror this commitment to the undocumented worker, Governor Brown also signed into law Assembly Bill 450, “the Immigration Worker Protection Act” (“the Act”), which prohibits employers from allowing federal immigration enforcement officials to access non-public areas of a work place without a judicial warrant. The Act also prohibits an employer from voluntarily allowing an immigration enforcement agent to access, review or obtain employee records without a court order or subpoena, with the following exceptions: (1) employment Eligibility Verification forms and other documents for which a Notice of Inspection has been provided to the employer; or (2) instances where federal law requires employers to provide access to records. The Act requires employers to provide affected employees sufficient notice of an agency’s inspection, which must meet specific content requirements in order to be compliant. Employers who violate the provisions of the Act may face civil penalties of up to $10,000 per violation. Accordingly, employers should review the Act and seek guidance from legal counsel. 6. Expansion of the Labor Commissioner’s Authority For Retaliation Claims (SB 306) SB 306 will provide the California Labor Commissioner greater authority to investigate and assure compliance with anti-retaliation laws by: (1) Permitting the Division of Labor Standards Enforcement (“DLSE”) to investigate an employer without any complaint of retaliation it if “suspects” that retaliation occurred through its adjudication of a wage claim, field inspection or other inquiry. (2) Authorizing the DLSE to obtain injunctive relief when it finds “reasonable cause” to believe that an employer has engaged, or is engaging in, unlawful retaliation. (3) Providing a fast-track method (mirroring the procedure for unpaid wage claims) for the DLSE to enforce violations by removing the DLSE’s burden to initiate civil actions. Rather, the DLSE/Labor Commissioner may now issue a citation directing an employer to take corrective actions. If the employer disagrees with the order, it may seek review through an administrative hearing before the Labor Commissioner within 30 days of the citation. (4) Imposing penalties up to $20,000 for any “willful” refusal to post a notice to employees, to hire, promote or otherwise restore a current or former employee to a position, and/or to comply with a court order to stop the offending activity. (5) Permitting an employee to initiate a civil action for retaliation in violation of Labor Code section 1102.5 and seek temporary or preliminary injunctive relief, which must be issued when “reasonable cause exists to believe a violation has occurred.” The 2017 Legislative Session brings many changes for California employers of all sizes. Employers should review these new obligations, set a plan for compliance, and prepare for enforcement of these new requirements. *The legislative updates discussed in this blog represent a partial list of the new employment laws that were passed during the 2017 California Legislative Session.

Since its inception more than a dozen years ago, California’s Private Attorneys General Act (PAGA) has been criticized for how it has been used by plaintiff’s counsel to secure (sometimes) large attorney’s fees awards and penalties from employer-defendants for relatively minor Labor Code violations. Despite political pressure from the California business community, the Legislature has done little to reform the statute. Governor Jerry Brown proposed policy and procedural changes to PAGA as part of his January 2016 state budget, but those proposals were reduced to modest changes. In 2017, several PAGA reform bills were introduced but fizzled out before legislative hearings were held. As a result of the Legislature’s inability to effect changes to PAGA, and with support from California’s business community, three different versions of PAGA reform initiatives were filed with the Attorney General’s office on October 5. These initiatives are collectively known as the “Worker Protection and Lawsuit Accountability Act.” Version 1 This proposed initiative would, among other things: Repeal PAGA in its entirety. Give the Labor Commissioner sole authority to issue citations for civil penalties (other than where a civil penalty is specifically provided by statute). Distribute all civil penalties with a 50-50 split: 50 percent to the employee(s) and 50 percent to the Labor and Workforce Development Agency. Protect employers from penalties where they acted in good faith reliance on an administrative regulation, order, ruling, approval, or interpretation of the Labor Commissioner. The wholesale repeal of PAGA is unlikely. However, two additional versions of the initiative were submitted to the Attorney General’s office, each imposing certain obligations and limitations on attorneys who handle PAGA claims. Version 2 This proposed initiative would: Prohibit a plaintiff’s attorney from contracting for or collecting a contingency fee on PAGA cases. Require plaintiffs’ attorneys be compensated on an hourly basis and at a rate that may not exceed 150 percent of the rate charged by the Attorney General. Require that plaintiffs’ attorneys’ billed hours be subject to court review and approval. Provide that a PAGA action may only be brought by an employee who has personally suffered an actual injury under each and every action contained in the complaint. Limit discovery in PAGA cases to information regarding employees in the same job classification and the same geographic location as the representative. Require all complaints for violation of labor laws be submitted under penalty of perjury. Provide that in any year in which an attorney files a PAGA lawsuit, the attorney shall complete an additional eight hours of legal ethics training. Version 3 The final proposed initiative mirrors the second, with the following slight differences: Only a “willful” violation of the law will subject an employer to PAGA penalties. Contingency fees for Plaintiffs’ attorneys handling PAGA cases will be limited to 25 percent for the first $100,000 awarded, and 12.5 percent for damages collected above the $100,000 threshold. While these initiatives are likely to be viewed as positive developments for employers, it could be years before Californians vote on any of these PAGA reform initiatives. We will keep you informed as additional steps are made in this process.

Recently, the Equal Employment Opportunity Commission (“EEOC”) has focused on filing lawsuits relating to an employer’s obligations under the Americans with Disabilities Act (“ADA”) when using pre-employment medical exams. During the month of September, the EEOC filed suit against Huntington Ingalls Industries in the U.S. District Court for the Eastern District of Virginia,* and against Consolidated Edison Company of New York, Inc. in the U.S. District Court for the Southern District of New York.** These cases concern different aspects of the ADA’s requirements: Huntington Ingalls focuses on providing an accommodation during the medical exam itself; Consolidated Edisonrelates to the use of a medical exam to deny employment. The EEOC’s growing interest in this area of law makes clear that employers would do well to revisit their obligations under the ADA. Employers often make use of pre-employment medical exams to determine an applicant’s suitability for employment. Employers should take caution, however, because their obligations under the ADA differ based on the stage of the employment process.*** First, an employer is prohibited from requiring an applicant to undergo a medical examination prior to an offer of employment, even if the examination is job-related. The employer may conduct a medical exam after the employer has extended the individual a contingent offer of employment – regardless of whether the exam or inquiry is related to the job in question – so long as the employer does so for all prospective employees in that particular job category.  Critically, an employer can only revoke an offer of employment based on the results of a medical examination if the reasons for the revocation are “job-related and consistent with business necessity.” Employers should exercise caution when seeking to revoke an offer of employment based on the results of a medical examination, as a misstep can create legal liability. When doing so, employers should be able to (1) provide evidence that all applicants in the job category in question are subject to examination; and (2) explain, with documentation, the specific ways in which revocation of the offer is job-related and consistent with business necessity (i.e. the individual is unable to perform the essential job functions or he or she poses a “direct threat” to himself, herself, or others). With the EEOC’s increased focus on such cases, employers would be wise to review their medical examination procedures to ensure they comply with the ADA.  Failure to do so could result in costly and protracted litigation. * U.S. Equal Opportunity Employment Commission v. Huntington Ingalls Industries, Civil Action No. 4:17-cv-00113 (E.D. Va. 2017). ** U.S. Equal Opportunity Employment Commission v. Consolidated Edison Co. of New York, Inc., Civil Action No. 17-cv-7390 (S.D.N.Y. 2017). *** See generally 29 CFR § 16430 et seq.

While the FMLA provides for protected time off, it does not provide for paid sick leave.  However, paid sick leave laws are gaining popularity at the state level.  Rhode Island is poised to become the eighth state, in addition to the District of Columbia, to approve a paid sick leave law for employees, if the law is signed by the governor as expected. Paid sick leave laws – as opposed to the Family Medical Leave Act that provides certain employees up to 12 weeks of unpaid, job-protected leave per year – typically grant employees a minimum number of paid sick hours or days each year, and govern the permissible reasons for employees to take such leave. Below is a snapshot of the states that have passed paid sick-leave laws and what you should know about them: Rhode Island If signed into law, as expected, Rhode Island’s paid sick leave law will go into effect on July 1, 2018. Requires employers with 18 or more employees to provide employees with paid sick leave as follows: Up to 24 hours of paid, protected leave in 2018 32 hours of paid, protected leave in 2019, and 40 hours of paid, protected leave every year thereafter. Employers with fewer than 18 employees do not have to provide paid sick leave, but are still required to provide protected unpaid leave in the same amounts as listed above. Employers can also issue employees their full allotment of leave at the start of each year to avoid tracking an employee’s accrual of paid sick leave. For employers that already provide paid sick leave in an amount equal to or greater than what is provided for in the law, no change in existing policies will be required. Washington Starting January 1, 2018, employers in Washington will be required to provide their employees with paid sick leave. Most employees will accrue paid sick leave at a minimum rate of 1 hour of paid sick leave for every 40 hours worked (including part-time and seasonal workers). Any unused paid sick leave of 40 hours or less must be carried over to the following year. Accrual of paid sick leave may begin on the 90th calendar day after the start of employment. Arizona Effective July 2017, Arizona’s law requires 24 hours of paid sick leave annually for employers with 14 or fewer workers, or 40 hours of paid sick leave for entities with 15 or more employees. An employer can request proof or documentation of necessary time off only after an employee has been absent three days in a row. Employers must document accrued paid sick leave for each worker and post notices, and pay stubs must show the amount of paid sick leave used and the amount available for use. Employers must maintain paid sick leave records for 4 years. Vermont Beginning in 2017, Vermont employers with 6 or more employees must allow workers to earn paid sick leave, accruing 1 hour of earned paid sick leave for every 52 hours worked. Employers with 5 or fewer employees must begin offering paid sick leave in 2018. Employers can limit the amount of earned paid sick leave accrued to 24 hours per year in 2017 and 2018. However, beginning in 2019 the cap increases to 40 hours per year. At the time of hire, Employers are required to inform new employees of the law and must display a required posting. Oregon Oregon’s paid sick leave law applies to all employers with 10 or more employees. Employers must provide up to 40 hours of paid sick leave per year. Employees start to accrue one hour of paid sick leave for every 30 hours worked, or 1-1/3 hours for every 40 hours worked, immediately when an employee begins working, but new employees may be required to wait until their 91st calendar day of employment touse paid sick leave. An employer can “front-load” – or give 40 hours of paid sick leave all at once at the start of the year – and avoid tracking accrual rates, carryover entitlements, and usage. California California’s law requires employers to offer a minimum amount of paid sick leave based on an accrual rate of 1 hour of paid sick leave for every 30 hours worked, or offer employees a lump sum at the beginning of each year that equals three days (24 hours) of paid sick leave. Employers must document how many days of paid sick leave employees have available on their pay stub, or on a separate document that is issued with an employee’s paycheck. Employees can roll over up to 48 hours of accrued, untaken paid sick leave (which can be limited to 24 hours per year). Employers must have a system in place to calculate, track, and report each employee’s paid sick leave balance, provide a written copy of the sick leave policy to employees at the time of hire, and display a poster explaining the sick leave policy. Employers must keep paid sick leave records for up to three years. Massachusetts All employers must provide a minimum rate of 1 hour of sick time for every 30 hours worked, up to 40 hours of sick leave per year. Only employers of 11 or more employees must provide earned sick time that is paid. Smaller employers do not have to provide paid leave, but are still required to provide protected leave in the same amounts as listed above. The law applies to full-time, part-time, seasonal, and temporary employees, but not independent contractors. Washington D.C. All employers with one or more employees are covered by the earned sick leave law. Employers with 100 or more employees must provide 1 hour of paid leave for every 37 hours worked (not to exceed 7 days per calendar year); Employers with at least 25, but not more than 99 employees, must provide 1 hour of paid leave for every 43 hours worked (not to exceed 5 days per calendar year); Employers with 24 or fewer employees must provide 1 hour of paid leave for every 87 hours worked (not to exceed 3 days per calendar year). The law covers both full and part-time employees, and temporary and contract workers. Connecticut In 2012, Connecticut became the first state in the nation to provide paid sick leave. The law applies to businesses that employ 50 or more individuals, and provides non-exempt “service workers” with paid sick leave that accrues at a rate of 1 hour per 40 hours worked, limited to a maximum of 40 hours per year (the law excludes most manufacturing and certain tax exempt organizations). Service workers must have worked an average of at least 10 hours a week in the most recently completed calendar quarter to be eligible, and cannot begin using accrued sick leave until they have completed 680 hours of employment. At the time of hire, employers must give notice of the law, the amount of sick leave provided, that retaliation for use of sick time is prohibited, and that an employee may file a complaint with the Labor Commission for a violation. Employers should be aware more than 28 cities or local jurisdictions also have sick leave ordinances in place, including New York, Chicago, San Diego, Los Angeles, and San Francisco.

Employers considering selling their business spend large amounts of time preparing the books, improving EBIDTA, fine-tuning marketing strategies, and reducing redundancies, among many other tasks, to improve the sale price. Yet six skeletons in the employment closet, discussed below, could cause serious problems during due diligence and halt an impending sale-of-business transaction: Does your handbook present a healthy company?A company’s employee handbook is often the first place the employment law specialist looks to assess the health of a company. For example, if the company does not have a harassment policy, an equal employment opportunity policy, an immigration compliance policy, or a disability accommodation policy, questions arise regarding whether these laws and related best practices have been followed by the company. Further, a company may have policies that are unlawful, which could cause the buyer’s specialist to request additional information and documents to further investigate the company’s practices. Accordingly, the company should review and update its handbook on a regular basis, especially if there is a significant change in the law that should be reflected in the company’s policies. Are your workers properly classified? The on-going struggle of whether to classify a worker as an employee or an independent contractor remains a highly litigated area in employment law. With a larger workforce, problems in this arena could implicate significant monetary liabilities. Companies should ensure they have carefully reviewed and determined whether workers are properly classified as employees or independent contractors. This area of law is a current target of U.S. Department of Labor investigations, and improper classification could result in civil money penalties. Are employees properly classified as exempt or nonexempt? Similar to the above misclassification problem with independent contractors, misclassifying employees as exempt can have expensive repercussions including back wages, liquidated damages, and attorneys’ fees that could scare a potential buyer away. Companies should examine job descriptions, which should be up to date and accurate, to confirm that the company’s exempt employees are performing exempt duties, and ensure that company is satisfying the salary basis test and the required salary threshold. Do your employee-related agreements have key provisions? Depending upon the structure of the company and the importance of certain key employees, “change in control” provisions and related severance consequences in executive employment agreements may be important for the company’s continued viability post-closing, which is of importance to any buyer. If the ability to enforce the restrictive covenants binding the company’s employees is an important asset to a buyer, ensure such agreements are in place, and have proper assignment clauses (to the extent permitted under applicable state laws). In addition, companies should review current employment agreements and consider other tools, such as retention agreements, to keep key employees in place. Beware of systemic issues!Potential exposure to a class action suit claiming systemic violations of law will impact the sale of a business because of cost considerations and the potential for pubic notoriety. Companies should address and resolve current and former employee complaints and perform periodic employment audits to avoid being blind-sided by class action claims. Do you have a collective bargaining agreement with a labor union? In most cases, if the selling company is subject to an existing relationship with a labor union, the National Labor Relations Act requires the selling company to notify the union concerning the transaction and to provide a meaningful opportunity to bargain with the union over the effects of the sale. The “decision” to sell is oftentimes described as being within management’s prerogative. However, sometimes the “decision” to sell is limited by contractual language contained within the parties’ collective bargaining agreement. To avoid any surprises, companies should determine whether the agreement contains a “successors” clause, which provides that the agreement is binding on successors. Although a successors clause does not automatically bind a purchasing employer to the terms of an existing collective bargaining agreement, a union could seek a preliminary injunction enjoining the employer from selling its business pending arbitration over the employer’s duty to assure that the purchaser would assume the terms of the collective bargaining agreement.

On October 2, 2017, the United States Supreme Court heard oral argument in Epic Systems v. Lewis, which considers the import of the National Labor Relations Act (NLRA) on the enforceability of class action waivers under the Federal Arbitration Act (FAA). According to some estimates, approximately 25 million employees are covered by arbitration agreements that prohibit class actions or other joint proceedings. Thus, the Supreme Court’s decision is likely to have a significant impact on employment and labor relations throughout the country. Summary of Oral Argument Questioning during oral argument hinted at a divide down ideological lines. In one interesting exchange, Justice Breyer appeared to tip his hand: The [NLRA] protects the worker when two workers join together to go into a judicial or administrative forum for the purpose of improving working conditions, and the employers here all said, we will employ you only if you promise not to do that. … That’s the argument against you. …I haven’t seen a way that you can, in fact, win the case … without undermining and changing radically what has gone back to the New Deal,that is, the interpretation of Norris-LaGuardia and the NLRA. Notably, Justice Gorsuch (perhaps following the example of his quiet and contemplative colleague Justice Thomas) did not ask a single question during argument. Substantively, the Court focused on the nature of the right protected by Section 7 of the NLRA. According to Petitioners, Section 7 protects employees’ right to decide to bring class or representative actions. However, it does not govern the rules applicable in the judicial or arbitral forum. As Petitioners characterized it, the “Section 7 right … gets you to the courthouse, it gets you to the Board, it gets you to the arbitrator. … But once you’re there you're subject to the rules.” Framed this way, the arbitration agreement merely operates “to set the rules for the forum of arbitration when you get there.” Just like an employer can contest the appropriateness of class proceedings based on failure to satisfy the requirements of Rule 23 (e.g., numerosity, commonality, etc.) without running afoul of the NLRA, it can also do so based on the existence of a bilateral arbitration agreement. In contrast, Respondents contended that Section 7 prohibits employer interference with concerted activities, including requiring an employee to sign an agreement that precludes class proceedings in all forums. Justice Alito seemed skeptical of this formulation, appearing to find scant substantive distinction between enforcing an agreement precluding class proceedings and a procedural limitation on employees’ ability to engage in collective litigation. Justice Kagan attempted to address Justice Alito’s skepticism, stating: Section 7 doesn’t extend to the ends of the Earth. If there are three employees who go out jointly rioting in the streets, they run up against antiriot laws and they go to jail just like everybody else. What Section 7 does and what Section 8 does is to establish a set of rules that deal with how employers can deal with employees. And one of the things that Section 7 and Section 8 say in concert, if you will, is that employers can’t demand as conditions of employment the waivers of concerted rights. And that's all you're saying here. Justice Kennedy, the Court’s most frequent swing vote, suggested that class waivers may not significantly impact employees’ ability to collectively enforce employment rights. Justice Kennedy presented the following scenario: [T]hree people … can[] go to the same attorney and say please represent us, and we will share our information with you, we have three individual arbitrations, but you represent all three of us, they can do that. … [T]hat is collective action. … [T]hey are proceeding concertedly. They have a single attorney. They are presenting their case. It is going to be decided maybe in three different hearings. … [M]any of the advantages of concerted action can be obtained by going to the same attorney. Sure, the cases are considered individually … While the availability of one method of collective employee action would not normally render valid a mandatory waiver of another, Respondents did not contend that employees were entitled to bring class proceedings in court. Respondents embraced the more modest proposition that so long as “joint legal action is available in one forum, that would be sufficient.” To the surprise of many, General Counsel for the National Labor Relations Board (NLRB), Richard Griffin, agreed that an arbitration provision that selects an arbitral forum that renders class proceedings onerous, if not impossible, would be enforceable. This is illustrated in the following colloquially with Chief Justice Roberts: CHIEF JUSTICE ROBERTS: Let’s say … the rules of the arbitral forum says you can proceed individually, but you … proceed collectively, but only if the class represents more than 50 people. Is that all right under your theory? MR. GRIFFIN: That’s a rule of the arbitral forum, and the employee takes the rules of the forum as they find them. … CHIEF JUSTICE ROBERTS: The arbitral forum has rules, just like the Federal Rules of Civil Procedures. And what you’re saying is … once you get into federal court, of course you’ve got to follow the rules of the forum. And we have arbitral forums as well. MR. GRIFFIN:And I’m saying those rules are equivalent, that … the employee takes the rules of the forum as they find them. What is prohibited [] under the National Labor Relations Act is an agreement by the employer that’s imposed that limits the employee’s right to take the rules … So it would be okay if the forum said that. Justice Alito highlighted that a decision adopting the rule advanced by the General Counsel would be pyrrhic victory for the NLRB. “[I]f that’s the rule, you have not achieved very much because, instead of having an agreement that says … no class action, no class arbitration, you have an agreement requiring arbitration before the XYZ arbitration association, which has rules that don’t allow class arbitration.” The Board’s General Counsel appears to have belatedly recognized the import of his concession at oral argument. On October 4, Griffin sent a letter to the Court correcting the position he articulated at oral argument, writing: I am writing to correct an inaccurate response I gave at oral argument yesterday in response to the line of questioning from Chief Justice Roberts … My responses, to the extent they indicated any difference from the responses given by employees’ counsel, Mr. Ortiz, to the questions of Chief Justice Roberts … were a result of my misunderstanding the Chief Justice’s questions and were inaccurate; Mr. Ortiz correctly stated the Board’s position and there is no disagreement between the Board’s and the employees’ position on the answers to those questions. The above summary just scratches the surface of the October 2 oral argument. Not only did the Court and parties contemplate the issues above, they discussed a variety of other topics, including whether class waivers are akin to “yellow dog” contracts, and the operation of the FAA’s “savings clause.” The Court’s decision will have a significant impact on the enforceability of widely-used class action waivers and potentially pending class litigation. Employers should pay close attention to Polsinelli at Work Blog in the coming months, as we will provide in-depth analysis when the Court issues its opinion.

A recent decision rendered by the Third Circuit Court of Appeals serves as a timely reminder that employers must consider the legal implications of the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) when litigating workers’ compensation claims. In Zuber v. Boscov’s, the Court determined that a release obtained in a workers’ compensation case did not act as a bar to later-asserted FMLA claims. The case arose when former employee Craig Zuber sustained an injury on the job and filed a workers’ compensation claim against his employer, Boscov’s. Workers’ compensation benefits were awarded. Shortly thereafter, Zuber’s employment was terminated. Zuber and Boscov’s entered into a settlement agreement in connection with Zuber’s workers’ compensation proceedings. Three months later, Zuber sued Boscov’s, alleging FMLA interference and retaliation, and retaliation under Pennsylvania common law. The district court granted Boscov’s motion to dismiss on the grounds that the settlement agreement released all claims, including FMLA claims. The Third Circuit reversed. Although the FMLA regulations were amended in 2008 to expressly permit settlement or releases of FMLA claims based on past conduct without approval by the U.S. Department of Labor (DOL) or a court, the Third Circuit held that the settlement agreement between Zuber and Boscov’s did not release Zuber’s FMLA claims. The Third Circuit’s decision is based on Pennsylvania contract principals and its interpretation under those principals of the contract’s language. In essence, the Court read the language to mean that the parties intended to only release the work injury claim and damages arising there from. The ruling comes as no surprise given the fairly narrow language in the release; specifically, the release language did not contain general language, such as a clause releasing “any and all claims against Boscov’s,” and it did not expressly mention the FMLA. The ruling does, however, remind employers of thiskey, unstated takeaway: Workers’ compensation claims are inherently tied up with ADA and FMLA issues. Employers and their HR and legal professionals must consider whether an employee’s rights and an employer’s obligations under the FMLA and/or ADA may be triggered, even though an employee is only seeking workers’ compensation benefits. Zuber’s allegations are such an example. He claimed that Boscov’s failed to notify him of his FMLA rights after he reported his injury to Boscov’s, and that Boscov’s failed to designate his absences as FMLA-protected leave, then retaliated against him for exercising his FMLA rights. Potential FMLA and ADA claims must be front of mind when litigating workers’ compensation claims, especially because workers’ compensation counsel are often different from counsel later retained to handle FMLA and ADA lawsuits. Admissions and evidence amassed for workers’ compensation purposes can create FMLA and ADA hurdles down the road if not approached strategically. If done right, workers’ compensation proceedings can significantly benefit employers in later FMLA and ADA litigation.

The Fair Credit Reporting Act (FCRA) continues to cause issues for employers that run afoul of its provisions when reviewing consumer background reports as part of the hiring process. Most recently, a proposed class action was filed against Starbucks Corporation. On September 20, 2017, plaintiff Kevin Wills filed a proposed class action in federal court in Georgia, alleging that Starbucks rejected job applicants after reviewing the applicants’ respective consumer background reports without first providing them with a copy of their reports or notifying them of their rights, in violation of the FCRA. The plaintiff seeks to certify a nationwide class of Starbucks job applicants who were denied at least five days’ notice of an adverse employment action based on their consumer background reports. As a reminder, the FCRA requires employers to: Certify to job applicants that consumer background reports will be used for a “permissible purpose”; Provide written disclosure and receive written authorization from job applicants before obtaining consumer reports; Provide notice to job applicants, including a copy of the consumer background report relied upon and notice of the applicant’s rights under the FCRA, before making any adverse employment decisions; and Provide job applicants, orally, in writing, or electronically, with an adverse action notice after making any adverse employment decisions based on a consumer background report. In addition, state laws may restrict an employer’s use of consumer background reports, especially credit reports, when making employment decisions.

It appears to be a common scenario: An employee becomes ill, exhausts his or her Family and Medical Leave Act (FMLA) provided leave, and then requests more leave as a “reasonable accommodation.” Must an employer grant additional leave? On September 20, inSeverson v. Heartland Woodcraft, Inc., the Seventh Circuit Court of Appeals answered that it does not. In this case, the plaintiff employee suffered back problems and exhausted his FMLA leave. He subsequently requested two additional months of leave beyond his FMLA leave allotment to undergo surgery. The employer declined the request, and told the employee that his employment would end when his FMLA leave expired. However, the employer made clear the employee was free to reapply for employment when he was cleared by a physician to return to work. The employee sued the employer pursuant to the Americans with Disabilities Act (ADA), claiming the employer did not reasonably accommodate his disability when it failed to grant him an additional leave beyond that provided by the FMLA. When rendering its decision, the court observed that the ADA is an anti-discrimination law, not a medical leave entitlement, and that a “reasonable accommodation” under the ADA is limited to measures that will allow an employee to work. An employee needing “long-term medical leave” cannot work and is therefore not a “qualified individual with a disability” under the ADA. Stated another way, because the employee here could not work, he was not a “qualified individual with a disability,” and was thus not subject to the ADA’s protections. Moreover, extended leave is not a reasonable accommodation because it does not give the employee the means to work, but rather excuses his not working. However, the court emphasized that its decision applied to long-term absences and that additional time off beyond that required by the FMLA for intermittent or short-term leave (no more than a couple of days or a couple of weeks) might be considered a reasonable accommodation in certain circumstances. This decision gives employers with employees who request long-term medical leaves some measure of comfort. Yet the Seventh Circuit’s ruling is likely not the final say on the matter, and could be appealed to the U.S. Supreme Court. Employers that are considering taking employment action against employees on long-term leave would do well to consult able counsel prior to doing so, as running afoul of the ADA or FMLA could prove costly.

On August 2, 2017, the Senate confirmed Marvin E. Kaplan, President Trump’s first nominee to serve on the National Labor Relations Board (NLRB). Prior to joining the Board, Kaplan spent the majority of his career in government practice, most recently as the chief counsel of the Occupational Safety and Health Review Commission (OSHRC). Along with the confirmation of William Emanuel on September 27, 2017, President Trump’s second nominee to the NLRB, it was widely expected that the NLRB would now consist of three pro-management members – Kaplan, Emanuel and Chairman Phillip Miscimarra. In his first decision as a member of the NLRB, however, Kaplan voted with Mark Pierce, and contrary to Miscimarra, when denying an employer’s request to stay an upcoming union election. In PCC Structurals, Inc.,Case 19-RC-202188 (Sept. 22, 2017), an unpublished decision, the employer sought to stay an election scheduled for September 22, 2017, or in the alternative, to impound the ballots. The Board denied each of the employer’s requests by a 2-1 vote. Miscimarra dissented on the basis of his disagreement with the Board’s “quickie election” rule, which was implemented in April 2016. When ruling for the Union, Kaplan “expresse[d] no view with respect to whether he agrees or disagrees with the revisions made by the [Quickie] Election Rule…” This is just the first decision in which Kaplan has participated and his position on these and other issues will be clarified as additional decisions are released. We will keep you posted on future decisions.

When a company receives information concerning potentially hidden wrongdoing, the old axiom, “the cover-up is worse than the crime,”becomes top of mind. To be sure, this principle should be a guiding force when an employer conducts a workplace investigation of reported misconduct. Below are five things every employer must know when misconduct in the workplace is reported. 1.    Conduct an Investigation A properly conducted investigation can reveal the nature and extent of any wrongdoing, result in accountability for individual(s) involved, and foster a safe, inclusive, and healthy work environment for company employees. The business and financial benefits of conducting an appropriate workplace investigation are equally compelling. Indeed, the difference between exposure to financial liability stemming from employee misconduct or avoiding such risk often rests in whether and how the employer handled an investigation. For example, proper and thorough investigations decrease the likelihood that the employee complaining of misconduct will file a charge of discrimination with the EEOC or other agency. Additionally, evidence the employer conducted a thorough investigation of purported misconduct or malfeasance can mitigate the threat of a punitive damages award. Moreover, certain defenses to liability are unavailable to employers that fail to conduct investigations. Specifically, the ‘Farager/Ellerth’ defense—which can shield an employer from liability in harassment cases—requires an employer conduct a prompt, appropriate investigation of the alleged misconduct. 2.    Begin the Investigation Promptly Investigations into misconduct should begin as soon as reasonably possible after the alleged misconduct is reported to preserve certain defenses. While no explicit rule for “promptness” exists, courts have often held that an employer’s response must occur within days of receiving notice of the alleged issue. The Ninth Circuit Court of Appeals, for example, held that an employer’s response was sufficient when it began an investigation into reported sexual harassment within three days. Conversely, the Southern District of New York held that an investigation that was initiated four weeks after a harassment complaint was not sufficiently ‘prompt.’ The purpose underlying these response rates is for the company to consider the reported conduct, determine the facts and, where appropriate, take action. 3.    Determine Who Should Conduct the Investigation In general, most businesses face three choices with respect to who performs the investigation: (1) internal employees/business people, (2) in-house counsel, or (3) outside counsel. Executives, for example, should almost never conduct investigations of serious misconduct because they may become fact witnesses subject to questioning at deposition or trial. Further, business people may often be seen as biased towards the employer and against the complainant. In-house lawyers have the benefit of familiarity with the personnel, structure, and policies of the business being investigated, but also may be viewed as biased. In addition, while in-house counsel may attempt to cloak the investigation in the privilege, many courts have found the efforts of in-house counsel to be “business” advice, not legal advice. By contrast the ultimate results of an investigation undertaken by outside lawyers may be more easily protected—if necessary—by the attorney/client privilege. 4.    Know the Basics before Meeting with Witnesses Employers should know and understand certain basic tenets before interviewing witnesses as part of a workplace investigation. For example, the interviewer should inform each witness/employee that their statements may not be completely confidential. Employers may wish to instruct the witness to maintain the confidentiality of the interview and investigation to protect the attorney-client privilege, prevent subsequent witnesses from learning of the investigation, and minimize the possibility of leaks. However, the National Labor Relations Board (NLRB) has held that blanket confidentiality mandates are unlawful and that an employer must provide a “legitimate business justification” for any such confidentiality instruction. These justifications may include preventing evidence from being destroyed, protecting witnesses, or avoiding a cover-up. Similarly, if counsel for the company is conducting the investigation, the witnesses should be advised that the lawyer represents the company, not the witness, and that any attorney-client privilege belongs to the company, not the witness. Finally, if possible include a third person in the interview who can take notes and, if needed, resolve any future disputes about what may have been said. 5.    Craft Policies for Effective Investigations Well-drafted policies governing workplace investigations can be crucial to their ultimate effectiveness—both during the investigative process and afterwards. An employer that lacks policies or procedures governing investigations risks generating an incomplete and poorly-done inquiry that may not stand up to scrutiny. Such policies also serve as training tools for the inexperienced and can provide needed guidance. Ultimately, having guideposts in your company policies for investigative procedures will prove beneficial in both the short and long term.

The Ninth Circuit Court of Appeals has created a circuit split with the Eighth Circuit Court of Appeals by rejecting the U.S. Department of Labor’s (DOL) interpretation of Fair Labor Standards Act (FLSA) regulations, and issued a restaurant-friendly decision regarding the application of the “tip credit” when paying regularly tipped employees. As discussed previously, the restaurant industry has experienced an increase in lawsuits relating to servers’ duties and the 80/20 “rule”. In Marsh v. J. Alexander’s, the Ninth Circuit addressed consolidated actions filed by servers and bartenders, who alleged that their employers improperly claimed a tip credit and failed to pay the required minimum wage. Plaintiffs alleged their “sidework”, which generally consisted of making tea or coffee, cutting lemons and limes, rolling silverware, and refilling ice or glasses, were non-tip generating activities that took over 20 percent of their work hours. Plaintiffs claimed as a result they were owed regular minimum wage for the time spent performing those tasks. The FLSA’s regulations provide that individuals employed in “dual occupations” cannot be paid using a tip credit for hours worked in the non-tipped occupation. For example, someone employed as a server and as a dishwasher for a restaurant cannot be paid using the tip credit for hours worked as a dishwasher. Furthermore, the DOL’s guidance states that an employer may not take the tip credit for time spent on duties not related to the tipped occupation because such an employee is “effectively employed in dual jobs.” The Ninth Circuit concluded that the DOL’s guidance attempted to create a de facto new regulation because the FLSA’s regulations’ focus is on dual jobs, whereas the DOL’s guidance interpreting said regulations speaks to duties a server may have throughout a shift. Because the dual jobs regulation is concerned with when an employee has two jobs, not with differentiating between tasks within a job, the court determined the DOL’s guidance is invalid. Until the U.S. Supreme Court resolves the circuit split, employers must ensure they understand how the 80/20 rule is applied in the applicable jurisdiction. Contact the wage and hour attorneys at Polsinelli with any questions, who are ready and willing to assist.

Employers often spend time and resources on well-crafted policies, but then do not communicate and train to the policies. Time and again, employers are reminded to review and update their HR policies. Of course, it is important for employers to update policies because statutes change; regulations are revised; and case law is reinterpreted. A new and/or revised employee handbook may need to be rolled out. However, issuance of a handbook – no matter how current – may not sufficiently inform employees of the policies. Often overlooked is the need to train and re-train employees, supervisors and managers, about the policies, and how they are to be implemented. Human resource policies without training can, and often do, create problems for employers almost as significant as having no policies at all.  For example, employer drug and alcohol policies often state that employees will be tested if there is “reasonable suspicion” of drug or alcohol abuse or that the employer will conduct random testing. Yet, how many employers provide instruction to their supervisors about what to look for to establish “reasonable suspicion”? How is the random testing conducted? Policies without regular, on-going training by qualified instructors set traps for employers. If employment litigation occurs, the employee’s counsel will likely inquire about implementation of the employer’s polices and instruction around important questions that arise in the workplace. Lackluster training (or no training at all) permits counsel to argue that the employer may not seriously enforce the policies, and as a result the employer is indifferent to the very policies it claims to promote. Employers should not only review and regularly revise human resources policies, but also conduct recurrent training by qualified experts on these policies.

Earlier this week, the U.S. District Court for the Northern District of California granted Nike’s motion for summary judgment and dismissed a class action alleging unpaid wages brought by workers who complained they were not paid for time going through “security checks.” Specifically, the Court determined in Rodriguez v. Nike Retail Services, Inc. that the time they were forced to wait in security checks to have their bags or jackets inspected prior to exiting the store was de minimis and non-compensable. Rodriguez set forth evidence (primarily deposition testimony from store managers) that security checks could take up to “a few minutes at a time.” In contrast, Nike produced a study of more than 700 hours of security footage, which explained that the vast majority of employees who exited the store spent approximately 18 seconds waiting for their bags or jackets to be searched when exiting. When opposing Nike’s summary judgment motion, Rodriguez argued the de minimisdoctrine was inapplicable to his claims brought pursuant to the California Labor Code (CLC). However, the Court quickly disposed of this argument, ruling the de minimis doctrine applies to the class claims. Despite the California Supreme Court’s silence on the issue, California courts of appeal and the Ninth Circuit Court of Appeals both previously (and regularly) applied the de minimis doctrine to CLC wage claims. Rodriguez also sought to exclude Nike’s expert report. To do so, Rodriguez hired an expert witness to attack the methods by which Nike’s study was produced, as well as its findings. Yet Rodriguez’s expert did not supply any evidence that would contravene Nike’s study, and the Court held the lack of contrary evidence did not create a “battle of experts” or a fact issue that would allow Rodriguez to survive summary judgment. Finally, the Court turned to the evidence before it, and determined that any wait time upon exiting was in fact de minimis. The Court specifically addressed the deposition testimony of store managers, some of whom testified employees could wait up to a few minutes for security checks prior to exiting. But Nike’s study showed such wait times of a few minutes were irregular, and the average wait time was less than twenty seconds. As a result, the aggregate amount of “compensable time” spent waiting in security checks was small. Moreover, given the administrative difficulty in recording between 20 seconds and two minutes of total wait time in security checks, the Court held the de minimis doctrine applied and granted summary judgment to Nike. This decision confirms the continuing viability of thede minimis doctrine and provides employers another arrow in their quiver when defending against similar “wait time” claims. Even so, employers in retail settings would do well to monitor employee wait times should such employers make use of “security checks” to ensure any wait time is under a minute. To the extent such wait times last longer than one to two minutes on average, employers may wish to consider setting up a mechanism to track such time.

Hurricane Harvey and Hurricane Irma serve as a reminder that employers have some legal obligations to employees during natural disasters. Employers should have a plan in place when preparing for a natural disaster, such as an inclement weather policy, a communications plan and a crisis management plan, and should be mindful of the below tips when creating a crisis management plan to avoid employment-related lawsuits and/or agency action after a disaster. Employee Safety Employers must exercise caution if asking employees to assist with preparing for and cleaning up after a natural disaster. Employers are responsible for the safety and health of their workers and for providing a safe and healthy workplace, which includes protecting workers from anticipated hazards associated with preparing for and cleaning up after a natural disaster. Employees who lack the proper training to perform such work face significant risk and may fail to heed necessary precautions when assessing or cleaning up damage to the workplace. Alternatively, employers may do well to consider contracting with a professional disaster recovery service to minimize risk to employees post-disaster. Employers should review the Occupational Safety and Health Administration’s (OSHA) guidance for handling hazardous conditions before a natural disaster strikes and incorporate that guidance into their crisis management plan. Visit the U.S. Department of Labor’s Occupational Safety and Health Act (OSHA)’s website for additional information on workers’ rights, employers’ obligations, and other services required under OSHA. Compensating Workers for Work Performed Exempt Employees: Employers may have to close their business in the middle of a workweek or pay period due to a natural disaster. When this occurs, employers are required under the Fair Labor Standards Act (FLSA) to pay an entire weekly salary to exempt employees who are paid on a salary basis if they work any portion of the workweek. Nonexempt Employees: Employers are generally not required under the FLSA to pay nonexempt employees if the employer is unable to provide work to those employees during a natural disaster. Instead, hourly workers must be paid for the actual time they work. Actual work:Employees may be forced to take on new responsibilities to aid in preparing for or cleaning up after a natural disaster. For example, a security guard may be tasked with cleaning up debris after a storm. Although the security guard’s duties don’t typically include cleaning up the store, the employer must compensate the guard for all time worked. An employer must compensate an employee for performing any activity that is primarily and necessarily for the benefit of the employer. Volunteers: After a natural disaster, employers may receive offers from employees to volunteer with the employer’s recovery process. An employer must exercise caution when deciding whether to allow workers to “volunteer” with such efforts, as employers may be required to compensate “volunteers” who perform work that can be construed as compensable time worked. In addition, private non-profit organizations must compensate employees who “volunteer” to perform the same services they ordinarily perform in the regular course of business. Working remotely: After a natural disaster, employers may have no choice but to allow their employees to work remotely. Even if working remotely isn’t typically permitted, employers may wish to implement a mechanism to capture time worked at home before and after a disaster strikes. If the employer doesn’t have a proper mechanism to capture and record time worked remotely, then it can be exposed to liability under the FLSA, state or local wage and hour laws, and obligations under specific employment contracts. Requests for Leave Employers typically receive an influx of requests for time off from employees immediately before and after a natural disaster. Although employers are not required to provide employees time off in all circumstances, such as to clean up damage to their personal property, there are certain situations in the aftermath of a disaster in which an employee may qualify for time off under the Family Medical Leave Act (FMLA). Post-disaster, employers should be mindful of employees’ need to take legally-protected leave. The trauma and stress of the storm or the storm’s aftermath may trigger anxiety, depression, or a mental illness, not to mention possible physical injury, and the employee may be eligible for FMLA leave to care for herself or a close family member. In addition, the employer may also be required to provide leave as an accommodation pursuant to the Americans with Disabilities Act (“ADA”). Takeaways There are a number of employment-related issues employers must consider when creating an inclement weather policy or crisis management plan. Consult with Polsinelli’s Labor and Employment attorneys before creating your policy or plan to minimize employment-related risks.

Missouri’s new Right-to-Work legislation, signed by Governor Eric Greitens on February 6, 2017, was scheduled to go into effect on August 28; however, labor union leaders have obtained over 300,000 signatures on a Petition, which, if validated by the Secretary of State, will force a state-wide referendum on whether the bill should become law. Since only 5 percent of registered voters in six of Missouri’s eight Congressional districts need to sign the Petition to force a referendum, it seems almost certain that enough signatures have been submitted. Under the Missouri Constitution, once sufficient signatures are submitted to the Secretary of State, the issue must be submitted “to the people.” This means, assuming the Secretary of State validates the submitted signatures, the legislature’s Right-to-Work legislation will be “on hold” until the state-wide vote in the referendum. The Petition states, and the Missouri Constitution provides, that the vote will occur at the next general election, which is in November, 2018. However, the legislature could move the vote to an earlier date, such as the primary election in August, 2018. Observers of organized labor further speculate that unions may initiate a second petition drive to place an amendment to the Missouri Constitution on the ballot, which could restrict the legislature from passing Right-to-Work legislation in the future. The fight over Right-to-Work in Missouri continues.

The discussion in the wake of the United States Supreme Court’s ruling in Spokeo Inc. v. Robbinshas focused on an employer’s ability to obtain dismissal of a claim under the Fair Credit Reporting Act (“FCRA”)—where the plaintiff or class alleges nothing more than a “bare procedural violation,” absent of any concrete injury or real harm. As detailed in prior posts, Spokeo clarified that a statutory violation of the FCRA alone does not create an injury in fact sufficient to support standing; a plaintiff must allege something more by way of real harm resulting from the purported violation. Some courts, including the Fourth Circuit Court of Appeals, have followed Spokeo to the letter and dismissed such claims, concluding no discernable concrete injury to the plaintiff existed, and, therefore, the plaintiff lacked Article III standing to pursue the claim. However, courts in California, Missouri, and Washington have recently accepted a tangential, aggressive argument that could be troubling for employers defending FCRA claims: that upon removal, a court must remand the case to the state court from which it originated because the plaintiff or class has not alleged a concrete injury in fact sufficient to establish Article III standing to allow the case to proceed in federal court. And because the removing party bears the burden of establishing federal jurisdiction, with all doubts being resolved against removal, this argument is gaining some traction, resulting in the remand of FCRA claims to proceed in state court. Even more problematic for defendants is the result if remanded to state court. Because the state courts are not constrained by the Article III requirements for standing, and state standing requirements can be less demanding, a claim for a “bare procedural violation” of the FCRA may survive a motion to dismiss in state court where it may not have in federal court, or in certain state courts, but not others. With the growing popularity of this maneuver among FCRA plaintiffs, it is important that employers ensure compliance with the FCRA in all employment decision-making processes involving consumer reports. If litigation should result, employers should work with counsel to make strategic decisions regarding removal or early-filed motions to dismiss to allow for the strongest defense possible to these “no-injury” FCRA claims.

On August 8, 2017, the United States District Court for the District of Connecticut held in Noffsinger v. SSC Niantic Operating Co., LLC d/b/a Bride Brook Health & Rehab Ctr. that federal law does not preempt the Connecticut Palliative Use of Marijuana Act (PUMA). PUMA prohibits employers from firing or refusing to hire qualified applicants or employees who are legally prescribed medical marijuana, even following a positive drug test. This case of federal first impression may have wide-ranging implications for employers that conduct drug testing in states that have legalized medical marijuana and have laws that protect medical marijuana users from adverse employment decisions based solely on their use of medical marijuana. Plaintiff Katelin Noffsinger was prescribed a daily dose of Marinol (capsulated synthetic marijuana) to treat symptoms arising from post-traumatic stress disorder, which she took only at night. Bride Brook, a nursing home, extended an offer of employment to Noffsinger, contingent upon passage of a drug test. Noffsinger disclosed her Marinol prescription to Bride Brook, and, as anticipated, tested positive for marijuana metabolites. Thereafter, Bride Brook rescinded her job offer. Noffsinger filed a lawsuit against Bride Brook alleging a violation of PUMA’s anti-discrimination provision. Bride Brook moved to dismiss, and argued that PUMA is preempted by the Americans with Disabilities Act (ADA), the Controlled Substances Act (CSA), and the Food, Drug and Cosmetic Act (FDCA) based on the theory of “obstacle preemption,” whereby state laws are preempted if they “stand as an obstacle to the objectives of Congress.” The court denied Bride Brook’s motion, and held that PUMA did not create an “actual conflict” with any of the three federal statutes. First, the CSA did not preempt PUMA because the CSA does not prohibit employers from hiring or employing individuals who use illegal drugs. Second, the ADA did not preempt PUMA because, while the ADA allows employers to prohibit the illegal use of drugs in the workplace, PUMA does not authorize individuals to use marijuana while at work, and the ADA does not address use of drugs outside of the workplace. Finally, the FDCA did not preempt PUMA because the FDCA does not regulate employment, but PUMA does. The Noffsinger decision creates further complications for employers that conduct drug testing for marijuana, particularly in states that have enacted laws that protect medical marijuana patients from adverse employment actions based solely on their use of medical marijuana. While the Noffsinger decision is not binding on other courts, courts in other jurisdictions with similar medical marijuana statutes might follow its lead. Therefore, employers may wish to reevaluate policies that either automatically deny employment to, or require termination of, an employee following a positive drug test resulting from the employee’s use of prescribed medical marijuana.

Despite the National Labor Relations Board’s (“NLRB”) increasing scrutiny of common workplace policies, including those prohibiting employees from secretly recording conversations in the workplace (i.e., no-recording policies), two recent cases suggest employers may establish overriding business interests justifying restrictions on workplace recordings and provide guidance on crafting policies that don’t run afoul of the National Labor Relations Act (NLRA). In June 2016, the Second Circuit Court of Appeals affirmed the NLRB’s ruling (discussed here), that Whole Foods Market Group, Inc. (“Whole Foods”) violated the NLRA by maintaining an overbroad no-recording policies. Whole Foods Market Group Inc. v. NLRB, 2nd Cir., Nos. 16-0002-ag, 16-0346 (June 1, 2017) (Summary Order). The NLRB has held that the “mere maintenance” of overbroad bans on workplace recordings violates the NLRA because they impermissibly chill employees in exercising their Section 7 rights. Whole Foods’ policies prohibited employees from recording staff meetings or other workplace conversations without prior management approval or consent of all involved, and contained no exception for workplace recordings protected by Section 7, such as recordings of picketing or unsafe working conditions. Therefore, the Second Circuit agreed with the NLRB that employees could reasonably interpret the policies to prohibit protected activity, and the policies unlawfully interfered with employees’ rights under Section 7 to engage in concerted activities. Importantly, the Court stopped short of holding that “every no-recording policy” would violate employees’ Section 7 rights. Indeed, the Court ruled that Whole Foods’ justification for its policies, promoting open dialogue among employees, did not outweigh the “chill” such policies could have on employees’ exercise of their protected rights. However, a policy placing “some limits” on workplace recording may not violate the NLRA if it is narrowly tailored to further an employers’ business interest. Similarly, the NLRB heard a challenge to a no-recording policy maintained by Mercedes-Benz U.S. International Inc. (“Mercedes-Benz”), which also contained no exception for concerted activity. There, the NLRB declined to find that the policy was facially unlawful at the summary judgment stage, noting that in previous decisions the NLRB has permitted employers to introduce evidence regarding asserted business justifications. Because Mercedes-Benz argued that its policy furthered legitimate business interests – protecting proprietary and confidential information, maintaining safety and production standards, and open communications – the NLRB ruled that Mercedes-Benz could introduce evidence of its business justifications. It remains to be seen whether Mercedes-Benz’s business interests will ultimately justify its no-recording policy in the eyes of the NLRB. While it is difficult to predict how the NLRB will treat no-recording policies, there are several actions employers may take to minimize the risk that a workplace policy prohibiting secret recordings will be found unlawful: Ensure any no-recording policy is narrowly tailored to further legitimate business interests, such as protecting proprietary, confidential, and trade secret information, maintaining safety and production standards, and promoting open employee communications. Include an express statement in any no-recording policy explaining the justifications for the restrictions on workplace recording and clarifying that the policy is not intended to limit employees’ rights to engage in protected activity under Section 7. Consult with counsel before disciplining an employee for secretly recording a workplace conversation or interaction. For further guidance on handling secret employee recordings, click here.

In the fall of 2014, the Occupational Safety and Health Administration (OSHA) conducted an investigation of a treatment center which provided behavioral health care for adolescents and adults in the form of inpatient and partial hospitalization. OSHA determined that the treatment center violated Section 5(a)(1) of the Occupational Safety and Health Act (the “Act”), commonly known as the General Duty Clause, by not having a workplace violence prevention program in place, and assessed a proposed penalty of $7,000 to the employer. An additional $2,000 in penalties were proposed for alleged record keeping and fire safety violations. The employer filed a notice of contest. As often happens when a notice of contest is filed, OSHA and the employer reached a settlement, resulting in a reduction of the proposed penalties to $4,500. The settlement also memorialized the employer’s abatement obligations – which included the implementation and maintenance of a stand-alone written Workplace Violence Prevention Program. The parties agreed that abatement would occur by November 23, 2016, which was 180 days after the parties reached their settlement. On December 19, 2016, a patient at the treatment center punched and scratched an employee, resulting in injuries that were serious enough to warrant 14 missed days of work. When OSHA performed a follow-up inspection in 2017, it learned of the December 2016 incident, as well as two more incidents that occurred after the first of the year. Because of the recurrence of violence in the workplace, OSHA concluded that the employer had failed to adequately abate the workplace violence violation and issued a new citation, with a daily penalty assessed for each day that the violation remained unabated. With the maximum daily penalty in 2016 set at $12,600, what originally was a $9,000 penalty had grown to $197,730 in proposed penalties. The employer has stated its intention to contest this citation. The moral of the story: OSHA takes the threat of workplace violence very seriously, especially in the health care setting. According to data compiled by the Bureau of Labor Statistics, workers in the Health Care and Social Assistance sector (NAICS 62) face a substantially increased risk of injury due to workplace violence. To address this growing concern, OSHA published “Guidelines for Preventing Workplace Violence for Healthcare and Social Service Workers,” which can be accessed here. On December 7, 2016, published a request for information (RFI) seeking comments about possible rule making to specifically address workplace violence from customers/patients in a new OSHA standard. And, although the comment period for the RFI ended in April, 2017, the U.S. Government Accountability Office recently submitted a letter to Secretary of Labor Acosta with a priority recommendation that the DOL complete its study on workplace violence in health care and determine whether regulatory action is needed.

On August 15, 2017, the Ninth Circuit Court of Appeals, in Robins v. Spokeo, Inc., Case No. 11-56843, reversed the district court dismissal of an action, holding that the plaintiff had sufficiently alleged a “concrete injury” to maintain a Fair Credit Reporting Act (FCRA) claim against a consumer reporting agency that had published false information about, among other things, his employment history. The Facts Spokeo, Inc. (“Spokeo”) operates a website that collects consumer data and builds individual consumer profiles. It markets its services to businesses to learn information about prospective business associates and employees. The plaintiff became aware that Spokeo published an inaccurate report about him, which included false information about his age, marital status, wealth, education level, profession and employment status, and listed a photo of a different person. The plaintiff alleged that this false report harmed his employment prospects when he was actually unemployed and caused him emotional distress. The Decision This case went to the United States Supreme Court, which remanded it back to the Ninth Circuit to determine whether the plaintiff suffered a concrete harm, not a mere statutory violation. The Ninth Circuit held that the plaintiff had established “concrete interests in truthful credit reporting” and the errors to his report were significant enough to meet the Supreme Court’s standard. The Ninth Circuit noted that harm to the plaintiff’s ability to search for a job was more than a mere “technical violation” of the FCRA. Caution for Employers This decision impacts employers in at least two ways. First, many employers rely on third-party reporting services for information about prospective employees. With federal and state laws increasingly narrowing the circumstances under which employers may consider credit reports in employment decisions, employers should weigh the benefits of using such reports against the risk of being swept into litigation for relying on a reporting company’s report. Second, this case was filed as a class action. The Ninth Circuit’s analysis of the plaintiff’s “concrete injury” focused on the facts particular to him, e.g., the errors relating to his age, marital status, wealth, education level, profession and employment status, and the use of the wrong photo. Companies that become embroiled in similar litigation should argue that the analysis will require an individualized inquiry not subject to class action adjudication.

On August 2, 2017, the California Court of Appeal issued a decision clarifying the arbitrability of claims under the Private Attorney General Act (PAGA), finding that those seeking “victim-specific” relief can be subject to mandatory arbitration. The California Supreme Court established in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (2014) that PAGA representative actions seeking civil penalties are not subject to mandatory arbitration (the so-called “Iskanian rule”). Since Iskanian, many assumed that all PAGA claims are exempt from mandatory arbitration. The Court of Appeal rejected that assumption in Esparza v. KS Indus., L.P., 2017 WL 3276363 (Cal. Ct. App. 2017), holding that the Iskanian rule only applies to claims where a portion of the recovery is allocated to the Labor and Workforce Development Agency (LWDA). On the other hand, PAGA plaintiffs requesting “victim-specific” relief – such as “an amount sufficient to recover underpaid wages” under Labor Code Section 558 – can be subject to mandatory arbitration. The plaintiff in Esparza brought a PAGA claim seeking “civil penalties” under Labor Code Section 558 in the form of per-pay-period penalties and unpaid wages that are “paid to the affected employee.” Lab. Code § 558 (emphasis added). The employer moved to compel arbitration, arguing that because wages recoverable under Section 558 are “paid to the affected employee” they are “victim specific” and are thus not subject to the ruling in Iskanian. The plaintiff, relying on the plain language of the statute, contended that wages recovered under Section 558 are a “civil penalty” for purposes of PAGA and application of the Iskanian rule. The court rejected the employee’s argument, characterizing it as “based on semantics and not substance.” Substantively, the wage-based recovery under Section 558 does not operate as a true civil penalty (even though referred to as such in the Labor Code) because it is recoverable by the employee in his or her individual capacity. This is in contrast to other “civil penalties” under PAGA, seventy-five percent (75%) of which are payable to the LWDA. The Esparzacourt concluded that “[t]he rule of non-arbitrability adopted in Iskanian is limited to claims ‘that can only be brought by the state or its representatives, where any resulting judgment is binding on the state and any monetary penalties largely go to state coffers.’” Consequently, claims for unpaid wages paid to the employees under Section 558 – even though sought under PAGA – may be subject to mandatory arbitration. However, claims seeking per-pay-period civil penalties paid to the LWDA – are subject to the Iskanian rule and may not be compelled to arbitration. What this means for employers: For employers with well-crafted arbitration agreements, Esparza creates an additional hurdle for plaintiffs seeking to evade class waivers by bringing PAGA-only actions. California employers seeking to limit their exposure to high-risk class or representative actions should review their employment arbitration agreements to ensure they: Apply to the victim-specific claims, including those under Labor Code Section 558; Prohibit class and representative actions to the extent permitted by law; and Contain no legally unconscionable provisions that would interfere with enforcement.

In 2011, the United States Supreme Court issued its landmark decision in Wal-Mart Stores, Inc., v. Betty Dukes, et al., decertifying a putative class of approximately 1.6 million current and former female Wal-Mart employees who claimed gender discrimination in wages and promotions in violation of Title VII. 564 U.S. 338 (2011). The Court reversed the Ninth Circuit’s affirmation of class certification and determined the plaintiffs failed to meet the class “commonality” standard set out in Federal Rule of Civil Procedure 23. Id. at 349-60. The Dukes decision set in motion a number of spinoff regional cases, one of which – barring another grant of certiorari to the high court – met its end somewhat anticlimactically, when the Eleventh Circuit issued its August 3, 2017 order in Love, et. al. v. Wal-Mart Stores, Inc. No. 15-15260. The Love plaintiffs included a sub-group of the Dukes plaintiffs who worked in the southeastern United States. These holdover Dukesplaintiffs were able to refile their claims because of the requirement that federal court discrimination plaintiffs first file with the Equal Employment Opportunity Commission. This rule effectively tolled the statute of limitations during the pendency of Dukes. But critically, under the Eleventh Circuit’s “no piggybacking rule”, tolling is limited to individual claims only, not class claims, which has also been adopted by the Fifth and Sixth Circuits. The Lovecourt previously left little room for argument when it noted in a 2013 order that “[t]he Eleventh Circuit categorically refuses to toll the limitations period for subsequent class actions by members of the original class once class certification is denied in the original suit.” Thus, on October 16, 2015 the individual named plaintiffs and Wal-Mart settled and jointly filed a “stipulation of voluntary dismissal.” On November 6, 2015, the Love appellants, made up of unnamed members of the would-be class, filed a motion to intervene solely to appeal the dismissal of class claims. This motion was denied 13 days later as moot, which, to make matters worse for the appellants, took them outside of their 30-day deadline to appeal the October 16 stipulated dismissal. The Eleventh Circuit thus found the appeal jurisdictionally barred, providing a rather sudden end to the winding multi-year litigation. In light of this tangled and technical history, employers and their counsel should be sure to understand the differences in treatment of class actions and individuals under the relevant rules, regulations, and statutes. Though it can be tempting to move immediately to the standard substantive arguments against numerosity, commonality, typicality, and adequacy of the proposed class, the Wal-Mart cases show that knowing your way around the procedural thicket is another useful skill in avoiding or minimizing the cost of class litigation.

The flu season brings additional challenges to hospitals and other health care providers, as they experience an increase in volume of patients who have the flu or flu-related symptoms or who are at higher risk of serious complications from the flu. Health care providers have implemented flu vaccination polices to protect vulnerable patients as well as employees and their families. However, flu vaccination policies can create a legal risk for health care providers, particularly when those policies mandate vaccination for employees. In a recent case, the EEOC represented three employees who claimed they were terminated for failing to get vaccinated, as they claimed being vaccinated violated their religious beliefs in violation of Title VII of the Civil Rights Act. The court, when denying the employer hospital’s motion for summary judgment, held that the hospital had not shown that it had reasonably accommodated the employees' religious objections to vaccination or that a reasonable accommodation would have caused an undue hardship for the hospital. On the other hand, the court ruled, the EEOC had not proven the opposite. In April 2016, the EEOC sued the hospital, alleging it fired at least three employees whose sincerely held religious beliefs forbade them from getting flu shots--the hospital's policy mandated flu vaccination for employees unless they were granted an exception. The hospital argued that the employees were fired because they missed the hospital's deadline to request an exemption from the policy. The judge observed that the hospital had granted approximately 75% of employees' exemption requests over several preceding years and a jury should decide whether allowing employees to file exemption requests beyond the policy's deadline was a reasonable accommodation. According to the judge, a jury should also decide whether exempting employees who work with "vulnerable [patient] populations" from the vaccination policy would "increase costs to the hospital." A jury would also need to determine whether the employees held sincere religious beliefs that prohibited them from getting a flu shot. Mandatory flu vaccination policies can also create legal issues when an employee's health status could be compromised or harmed if vaccinated. Flu vaccinations can present a serious health risk to an employee with a history of severe reaction to flu vaccines or an ingredient in the vaccine, or has or may have Guillian-Barre syndrome. Health providers with mandatory vaccination policies will inevitably face the question: What do we do when an employee refuses to be vaccinated? To minimize risk, the employer should engage in an interactive dialog with the employee to identify the basis for the refusal and potential accommodations. Many hospitals have allowed an employee to continue to work without vaccination provided the employee wears a mask. Other potential accommodations include transfer to a position with no patient contact or no contact with flu-vulnerable patients, or a leave of absence. Drafting an effective and lawful policy, and consistent application of the policy, are essential to minimizing the legal risks when mandating that employees be vaccinated.

Several circuit courts of appeal have considered a critical aspect of class litigation: does the court or arbitrator decide if arbitration agreements permit class arbitration (the “who decides” question)? The U.S. Supreme Court has not yet resolved this issue. However, the Eighth Circuit, in Catamaran Corporation v. Towncrest Pharmacy,No. 16-3275 (July 28, 2017), joined the Third, Fourth, and Sixth Circuits when holding that courts, not arbitrators, should answer the “who decides” question when the arbitration agreement at issue is silent on the subject. The Eighth Circuit concluded that the “who decides” question is a substantive question of arbitrability rather than a preliminary procedural question, and that courts are thus the proper authority to answer the question (whereas arbitrators decide preliminary procedural questions). Indeed, according to the Eighth Circuit, courts must play a threshold role to determine whether parties have submitted a particular dispute to arbitration because such issues presumptively lie with the courts. The Eighth Circuit reached this conclusion “because of the fundamental differences between bilateral and class arbitration.” The court noted that arbitration is poorly suited to class litigation where the rights of absent members are determined, thereby fundamentally affecting both the nature and scope of the parties’ arbitration. After explaining its rationale, the Eighth Circuit reversed the district court’s order denying Catamaran’s motion for summary judgment because the district court erred when concluding that the question of class arbitration was procedural rather than substantive. The Eighth Circuit remanded the matter to the district court to determine whether a contractual basis for class arbitration exists in the agreements at issue. As mentioned above, the “who decides” question is currently an unsettled and dynamic area of law. Accordingly, employers may wish to consult with counsel prior to drafting arbitration agreements to consider the business and legal ramifications of potentially defending a class action in court versus in arbitration, as well as the language to include in such agreements. And, as always, we will continue to follow this emerging area of law here, so stay tuned.

Massachusetts and 28 states have legalized medical marijuana, and an additional 16 states permit “low THC” use. Federal law, however, still outlaws marijuana use, regardless of ailment or disability. In light of these conflicting laws, how should an employer handle a medical marijuana user who fails an employer’s drug test? While courts in New Mexico, California, and Colorado have held that employers are not required to accept an employee’s medical marijuana usage, a recent Massachusetts decision shows that employers should proceed with caution. On July 17, 2017, the Supreme Judicial Court of Massachusetts held that employers may be required to allow disabled employees to use medical marijuana outside of work. In Barbuto v. Advantage Sales and Marketing, LLC, the plaintiff used medical marijuana at home two to three nights a week to treat her Crohn’s disease, as permitted under Massachusetts’ Medical Marijuana Act. Subsequently, the plaintiff accepted an entry-level position and was presented with the employer’s required drug test. The plaintiff disclosed her medical marijuana use, provided a doctor’s certification, and stated she would not use marijuana before or during work. Initially, the employer stated that failing the drug test “should not be a problem,” but then terminated the plaintiff when the test came back positive. The plaintiff filed suit against the employer for disability discrimination under Massachusetts law (among other claims), which the trial court dismissed, and the plaintiff appealed. On appeal, the plaintiff argued that she was a “handicapped person” due to her Crohn’s disease, and that she was capable of performing the essential functions of her job with a reasonable accommodation – i.e., using marijuana at home. The employer argued that the accommodation was unreasonable because using marijuana violated federal law. The Supreme Judicial Court of Massachusetts found that using medical marijuana was a permissible accommodation when “medical marijuana is the most effective medication for the employee’s debilitating medical condition, and where any alternative medication whose use would be permitted by the employer’s drug policy would be less effective.” The court noted that the potential for violating federal law was inconsequential because the “only person at risk of Federal criminal prosecution for her possession of medical marijuana is the employee.” Thus, the plaintiff should have been permitted to pursue her disability discrimination claim. The court cautioned that its decision did not mean that the plaintiff would ultimately prevail on her claim. The employer still had an opportunity to prove that using marijuana would impose an undue hardship on performance or safety, or would cause the employer to violate contractual or statutory obligations. Employers with employees in multiple states would do well to familiarize themselves with the current plethora of marijuana laws, as states such as Arizona, Delaware, and Minnesota provide that an employee cannot be terminated for testing positive for marijuana, so long as that employee is in possession of a valid medical marijuana card. As the court in Massachusetts made clear, running afoul of state marijuana laws could expose an employer to liability.