By Shaunda L. McNeill
Tenth Circuit Court of Appeals* recently issued notable opinions on three topics applicable to employers.
By: Shaunda L. McNeill
On August 9, 2018, the Utah Court of Appeals held in Vander Veur v. Groove Entertainment Technologies (2018 UT App 148) that "breach of the implied covenant of good faith and fair dealing may be asserted for the limited purpose of protecting from opportunistic interference an employee’s justified expectations in receiving the fruits of a compensation agreement attendant to the at-will employment relationship after that relationship has been terminated." ¶ 26. Under this holding, employers need to be wary of how and when they terminate an employee – even an at-will employee – who has a compensation agreement.
By: Shaunda L. McNeill
On April 2, 2018, the U.S. Supreme Court declined to review the decision of the Seventh Circuit Court of Appeals in Severson v. Heartland Woodcraft, Inc., 872 F.3d 476 (7th Cir. 2017), which held that multi-month leave is not a reasonable accommodation under the Americans with Disabilities Act (ADA).
By Trenton L. Lowe
The 2018 Utah Legislature concluded on March 8, 2018. Although it was a record year for number of bills introduced, the Legislature passed 533 bills, two short of last year’s all-time record. Below, I summarize the employment-related bills that passed through the Legislature and will go into effect on May 7, 2018.
After years of falling flat, the House of Representatives has passed a bill that will cut the knees off abusive Americans with Disabilities Act lawsuits. The House passed the ADA Education and Reform Act of 2017 on a 225-192 vote. Importantly, the bill would give restaurant and other business owners up to four months (reduced from the original six-month proposal) to comply with the ADA before litigation can be initiated. The bill would also require the Judicial Conference of the United States to develop a model program for alternative dispute resolution like mediation. Bill backers like Rep. Bob Goodlatte, R-Va., the House Judiciary Committee chairman, said the legislation would help put a stop to abuses of the system that amount to shakedowns of small businesses for technical ADA violations.
“The ADA’s private right of action, which was originally intended to be the primary enforcement mechanism to achieve greater access, has instead encouraged a cottage industry of costly and wasteful litigation that neither benefits the business nor disabled individuals seeking more accessibility,” Goodlatte said.
The 2018 Utah Legislature begins on Monday, January 22, and a record number of bills have been filed this year – more than 1,100 – which will make for a busy session for lawmakers. Depending on how you look at it, there are seven bills that affect private employers, while an additional two bills that strictly affect public employees may, if passed, have an effect on private employers in the coming years. I have summarized each of the bills’ most important points and will update them as things change throughout the session.
For assistance navigating how these bills may affect you and your company, contact the Labor & Employment Group at Clyde Snow & Sessions at 801.322.2516.
Earlier this month, the U.S. Supreme Court declined to take up an appeal from the Eleventh Circuit on whether sexual orientation is protected under Title VII of the Civil Rights Act of 1964. Currently, Title VII prohibits employers from discriminating against employees and applicants on the basis of race, color, religion, sex, and national origin. However, in recent years, courts across the country have been asked to determine whether or not sexual orientation is a separate protected class, or, at least, a subset of one of the existing protected classes under Title VII.
In just his first week in office, President Trump, through two new appointments, has initiated an ideology shift at the Equal Employment Opportunity Commission and the National Labor Relations Board. Republicans Victoria Lipnic and Philip A. Miscimarra were appointed as acting chairpersons for the EEOC and NLRB, respectively. Both Lipnic and Miscimarra were appointed to the EEOC and NLRB under President Obama’s tenure, however all signs point to more employer-friendly employment regulations than their left-leaning predecessors.
On November 22, 2016, a federal judge blocked the U.S. Department of Labor’s Final Rule doubling the salary level used to determine whether employees are classified as exempt from overtime under the Fair Labor Standards Act. The Final Rule—which would have raised the salary threshold for executive, administrative, and professional exemptions from $23,660 to $47,476 a year, or $455 to $913 a week—was scheduled to become effective next week on December 1, 2016.
Judge Amos L. Mazzant, of the U.S. District Court for the Eastern District of Texas, issued the emergency preliminary injunction in a consolidated case brought by 21 states, including the State of Utah, and more than 50 business groups. The court found that the Department of Labor’s regulation exceeded the authority granted to it by Congress, which authorizes the Department to define which workers are considered exempt from overtime based on the duties they performed, rather than on salary levels. The preliminary injunction prevents the Final Rule from taking effect nationwide pending the court’s final decision on the merits of the case. In the meantime, employers are no longer required to increase salary levels for exempt employees or reclassify employees from overtime exempt to overtime eligible on December 1st, as they may have previously planned.
It’s that time of year, the tree is decorated, the menorah is lit, and the punch bowl is brimming with holiday cheer. . . . everyone is happy and relaxed at the company party, except you, officer of all things people. The holidays are a great time to come together and celebrate a year of hard work, team building, and company accomplishments. Here are a few tips to navigate the holidays and avoid common holiday party pitfalls.
Prevent Sexual Harassment
What a great time of year for the people of the great state of Utah! Warm fall weather is extending the mountain biking season, and the ski season is just on the horizon. Oh, and I guess there is an election coming up on Tuesday, November 8th. If you are like me, your clear choice might change day to day based on new corruption allegations released by WikiLeaks and other media outlets. I will not disclose who I am voting for in this news alert, but if I did, what could my employer do about it? It could go something like this —
On October 17, 2016 the Equal Employment Opportunity Commission (EEOC) released its Strategic Enforcement Plan for Fiscal Years 2017-2021 (“Plan”) and businesses would be wise to take notice. The Plan is essentially a blueprint for where the EEOC will devote its resources, and establishes which substantive areas of employment will be its top priorities for the next five years. The EEOC has a known track record of following through with the articulated priorities, and as such all employers should be aware of the Commission’s top priorities which are summarized below and numbered in order of their importance to the EEOC:
In this year’s legislative session, the Utah Legislature passed the following three bills that Utah employers should take into account in their workplace policies and procedures:
Amendments to the Utah Antidiscrimination Act (SB 59)
Employers expend a substantial amount of funds towards protecting electronic employee files, contact lists, client files, trade secrets, and other propriety information. Potential intruders into employee electronic files include outside hackers, employees accessing the database beyond their authority, and past employees continuing to access the database. Both federal and state laws provide employers with civil remedies as a result of cyber hacking into their electronic files.
The DOL has cracked down on private for profit companies’ use of unpaid interns. Oftentimes, college students or recent graduates are eager for experience and are willing to work for free. If your “intern” is a benefit to the company, your intern is more than likely an employee and is entitled to minimum wage and overtime. While the DOL has put forth a six part test to analyze whether an intern is really masking as an employee entitled to minimum wage and overtime, see https://www.dol.gov/whd/regs/compliance/whdfs71.htm, a simple rule of thumb is to question whether, if the intern no longer worked for you, would it be necessary to have an employee absorb those tasks. If so, he or she is probably an employee and will need to be paid.
A case in point involves a recent putative wage class action filed in Texas federal court against a fitness boot camp for allegedly requiring recruits to participate in a month’s long unpaid internship program before they become paid trainers. The suit alleges violations under the Fair Labor Standards Act: “This action is appropriate for class or collective action status because ... the internship is always unpaid, it has always required essentially the same type of work of the intern, it has always been treated as an ‘extended audition’ for the role of primary trainer and it has always suffered from the same lack of compliance with [the FLSA],” the lawsuit says.
On June 17, 2016, the California legislature passed SB836 as a part of California Governor Jerry Brown’s approved budget. SB836, which is effective July 1, 2016, and applies to all law suits filed on or after that date, expands government involvement in PAGA claims, and applies to all lawsuits alleging PAGA violations filed after the effective date.
Under existing California law, the Labor Code Private Attorneys General Act of 2004 (PAGA), authorizes an aggrieved employee to file suit to recover specified civil penalties on behalf of the employee and other current or former employees for the violation of certain California Labor Code provisions. PAGA allows the employee to collect these penalties on behalf of him/herself and the California Labor & Workforce Development Agency (LWDA) in the law suit, which penalties would otherwise be assessed and collected by the LWDA.
You may be surprised to know that if your website is not accessible to the visually and hearing impaired you are currently in violation of the Americans with Disabilities Act, otherwise known as the ADA. That’s right—the Department of Justice (DOJ) has deemed websites within the scope of the ADA and a flood of demand letters have been overwhelming businesses ever since. What does this mean exactly? This means that your website needs to be equally accessible to the visually and hearing-impaired as those without disabilities or else you could face costly lawsuits from customers, employees, and the DOJ.
Title III of the ADA prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation.” Places of “public accommodation” are defined by the ADA as including over 5 million private establishments such as, restaurants, hotels, theaters, convention centers, retail stores, shopping stores, laundromats, doctor’s offices, and many more. The language of the ADA led business owners, and even many courts, to believe that in order to be a “public accommodation” covered under the ADA, it needed to be a physical location of business. Unfortunately, the NBA, Target, Patagonia, Ace Hardware, Bed Bath & Beyond, J.C. Penney, Home Depot and many other corporations can attest to just how misguided this belief was.
The highly anticipated U.S. Department of Labor regulations on the “white collar” overtime exemptions were published on May 18, 2016. The Final Rule updates the Fair Labor Standards Act (“FLSA”) regarding executive, administrative, and professional employee exemptions (“White Collar Exemptions”). The Final Rule becomes effective December 1, 2016.
The Final Rule Changes the FLSA by:
Under the Fair Labor Standards Act, may an employer assess a monetary penalty, based on a written policy, against an employee for a non-safety infraction and withhold the penalty from the employee’s wages? For example, may an employer deduct $15 from an employee’s paycheck every time that employee is late to work? The answers to these questions depend entirely on the employee’s classification.
The U.S. House of Representatives recently voted 410-2 on to pass the Defend Trade Secrets Act (DTSA) that would federalize trade secrets law. The bill already passed the Senate last month so the next step is sending the bill to the White House to President Obama signature, which he is expected to sign. The DTSA allows companies for the first time to file civil lawsuits for trade secrets theft under the federal Economic Espionage Act. Currently, the Espionage Act only provides for prosecution of criminal trade secrets theft. Private civil suits must be filed under available state law.
Unlike patents, copyrights and trademarks, trade secrets are governed exclusively by state law, and those laws will vary dramatically from state to state depending on whether the state has adopted the Uniform Trade Secrets Act. The primary intent of the DTSA is to create a consistent federal statutory approach, allowing for the development of more predictable, nationwide case law. It would also give litigants easier access to federal courts, which are arguably better equipped than state courts to handle cross-state and international cases, as well as complex technological issues.