Hunton Employment & Labor Perspectives

As we ring in the new year, California employers face an important new compliance requirement: an updated Whistleblower Rights Notice must be prominently posted in the workplace beginning January 1, 2025.

In an amicus brief filed before the Third Circuit, the EEOC has taken the position that claims of harassment based on gender identity and sexual orientation fall within the scope of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFASASHA”).

“Ban-the-Box” legislation has seen steady growth throughout the country for more than two decades.  Currently, there is no federal legislation on the topic for private employers but a good number of states have limited their ability to inquire about or make decisions based on a prospective employee’s criminal background history.

Last year, the EEOC revealed its Strategic Enforcement Plan (“SEP”) for Fiscal Years 2024-2028.  In the SEP, the EEOC stated that a subject matter priority was “the continued underrepresentation of women and workers of color in certain industries and sectors.”  One such industry focus is on workers in STEM (Science, Technology, Engineering, Mathematics) fields. 

On September 27, 2024, the United States Court of Appeals for the First Circuit (the “First Circuit”) entered judgment in favor of 7-Eleven, Inc. (“7-Eleven”) in Patel v. 7-Eleven, Inc., putting to rest a class action lawsuit 7-Eleven has been defending for more than seven years regarding allegations that its franchisees were actually employees of 7-Eleven, based on the application of the Massachusetts independent contractor statute.

On August 15, 2024, the California Supreme Court held in a unanimous decision that public employers are not “employers” within the meaning of the meal-and-rest-break provisions of the California Labor Code, and the California Private Attorneys General Act (“PAGA”) exempts public employers from penalties for violations of Labor Code provisions carrying their own penalties.  The Court’s ruling substantial limits public employees’ ability to sue for wage-and-hour violations.

On August 23, 2024, the U.S. Court of Appeals for the Fifth Circuit struck down the Department of Labor’s (“DOL”) tip credit rule, known as the “80-20-30” rule, which limits the ability of employers to satisfy a portion of tipped employees’ wages with earned tips.

The EEOC is asking the Ninth Circuit to clarify the U.S. Supreme Court’s new standard for determining the type of harm that constitutes an adverse job action in discrimination cases and to apply that standard or remand the case at issue so the lower court can apply the new standard.

On August 9, 2024, Illinois Governor J.B. Pritzker signed H.B. 3773 into law, requiring all Illinois employers to notify employees and applicants when they use artificial intelligence (A.I.) to make employment decisions.

On April 23, 2024, the Federal Trade Commission (“FTC”) approved a final rule banning most non-compete agreements between employers and their workers (the “Final Rule”). However, in the afternoon of Tuesday, August 20, 2024, Judge Ada E. Brown of the United States District Court for the Northern District of Texas, followed her July preliminary injunction against the rule with a substantive ruling granting summary judgment in favor of the plaintiffs challenging the Final Rule and against the FTC (“Memorandum Opinion and Order”), explaining that “the Court concludes the text and the structure of the FTC Act reveal the FTC lacks substantive rulemaking authority with respect to unfair methods of competition, under Section 6(g). See generally 15 U.S.C. § 46(g); 15 U.S.C. § 57a. Thus, when considering the text, Section 6(g) specifically, the Court concludes the Commission has exceeded its statutory authority in promulgating the Non-Compete [Final] Rule.”  Memorandum Opinion and Order at 22. 

In an unusual ruling, Pennsylvania federal judge Michael M. Baylson (i) invoked a court’s inherent powers to manage its docket in dismissing with prejudice a long-running collective action lawsuit against Uber Technologies, Inc. (“Uber”) but also (ii) awarded—after a second hung jury—victory to Uber on the merits by granting its Rule 50(b) motion for judgement as a matter of law.

The Consumer Financial Protection Bureau (the “CFPB”) has added itself to the list of agencies that view broad confidentiality agreements given to employees with scepticism. In a Circular published on July 24, 2024, the CFPB stated that requiring employees to sign a broad confidentiality agreement could violate Section 1057 of the Consumer Financial Protection Act (the “CFPA").

On July 2, 2024, the Occupational Safety and Health Administration (OSHA) released a long-awaited proposed rule to prevent heat-related injuries and illnesses in the workplace.  OSHA initiated the rulemaking process in October 2021 as part of its ongoing heat-related illness prevention initiative.

Last week, we reported Governor Gavin Newsom had announced that business and labor groups in California had reached a deal to preserve and reform the Labor Code Private Attorneys’ General Act of 2004, Cal. Lab. Code § 2698, et seq. (“PAGA”).  At the time of our report, the text of the new bills had not yet been released, but additional details are now available as the bills race to the Governor’s desk.

This past week, the EEOC filed suit against 15 different employers located across 11 different states. There was one common theme in each action: an employer’s failure to complete EEO-1 Component 1 reports for both 2021 and 2022. By filing these lawsuits, the EEOC is requesting courts to order these employers to fulfill their requirement of providing their company’s workforce demographic data. These suits were filed just ahead of the deadline for employers to file their EEO-1 Component 1 report reflecting data from the 2023 calendar year, which is quickly approaching on June 4, 2024.

In two cases filed in federal courts, workers at retail fast-food chains McDonald’s and Wendy’s are taking advantage of the new protections granted them by the 2022 Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act).

On April 29, 2024, in compliance with President Biden’s October 2023 Executive Order addressing artificial intelligence, the Department of Labor’s Wage & Hour Division (WHD) issued guidance regarding the potential risks posed by employers using AI tools to monitor or augment worker productivity to violate the Fair Labor Standards Act (FLSA).

Although there is no federally-mandated paid leave for U.S. employees in the private sector, states have increasingly required that employers provide various forms of paid leave to their employees.  That trend continues as several states began imposing requirements upon employers to permit employees to accrue and use paid sick leave for certain medical situations for employees or members of employees’ immediate families.  Paid sick leave for employees in the private sector is now required by 17 states, the District of Columbia, and various municipalities around the country.

California lawmakers are considering passing a bill that would give employees the “right to disconnect” by ignoring after-hours calls, emails, and other communications from their employers.  The bill, AB 2751, introduced by Assemblyman Matt Haney (D-San Francisco), would add a Section 1198.2 to the Labor Code that would effectively prevent employers from contacting employees outside of working hours, with limited exceptions.

In a welcome win for defendants litigating claims under the Illinois Biometric Information Privacy Act (“BIPA”), earlier this month a Northern District of Illinois magistrate judge denied a plaintiff’s motion to compel communications between defendant Union Pacific Railroad Company (“Union Pacific”) and the vendors that provided it with fingerprint-activated security gates.  Fleury v. Union Pac. R.R. Co., No. 20 C 390, 2024 WL 1620613, at *4-6 (N.D. Ill. Apr. 15, 2024).  In so doing, the court implicitly affirmed that, in a BIPA lawsuit, the common interest doctrine presumptively protects the communications between biometric technology vendors and their customers, regardless of which entities are named as defendants.  This ruling is a powerful tool in the BIPA landscape for employers (who are typically the customers in this scenario) and other defendants alike because it supports the ability of BIPA defendants to coordinate their defense strategy with entities who share their legal interest.  The opinion is also a good reminder, however, that vendors and their customers should use best practices early on in a BIPA litigation to maximize the scope of the common interest doctrine.

Employers contemplating a forced transfer of a worker will need to grapple with a new standard set out by the US Supreme Court under Title VII of the Civil Rights Act of 1964, the law that makes it unlawful to discriminate against workers based on various protected characteristics. The Supreme Court in Muldrow v. City of St. Louis issued an important ruling that clarifies the evidentiary standard employees must meet when asserting a discriminatory transfer claim against an employer under Title VII.   Prior to the Court’s decision, there was a Circuit split with most courts holding that an employee had to show a significant employment disadvantage to prevail on a claim that their transfer violated Title VII.  In its opinion, the Supreme Court held instead that an employee must show (i) the employer’s action was discriminatory, and (ii) that the employee suffered “some harm” respecting an “identifiable term or condition of employment” to state a claim for discrimination under Title VII.  The majority noted that the Court’s “some harm” standard is a downward departure from the type of evidence that lower courts had traditionally required to show discrimination under Title VII – namely, that an employee must suffer “significant,” “material,” or “serious” harm to have an actionable claim. 

Last week, New York’s Governor signed a bill into law that effectively prohibits employers from accessing employees’ or job applicants’ personal social media accounts. The law goes into effect on March 12, 2024.

On February 8, 2024, the U.S. Supreme Court issued a unanimous opinion holding that a whistleblower with a retaliation claim under the Sarbanes-Oxley Act of 2002 (“SOX”) does not need to establish that their employer acted with “retaliatory intent” to succeed on their claim. An employee must merely show that their protected whistleblowing activity was a “contributing factor” in an adverse employment action against them by their employer. Murray v. UBS Securities, LLC, 144 S.Ct. 445 (2024). An employer’s retaliatory intent or lack of animosity is “irrelevant.”  Id. at 446.

The legal path between employee arbitration agreements under the Federal Arbitration Act (“FAA”) and representative claims under the California Private Attorney General Act (“PAGA”) has been anything but smooth. A new (albeit unpublished and uncitable) case, Piran v. Yamaha Motor Corp., et al., No. G062198, 2024 WL 484845 (Cal. Ct. App. Feb. 8, 2024)(unpub.) (“Yamaha”), helps to illustrate the challenges and unanswered questions lingering in the wake of this rapidly-developing area of law.

Washington, D.C. is the latest in a growing list of jurisdictions to require employers to have “pay transparency” in job postings. Starting in June of 2024, Washington, D.C. will require all employers with at least one employee in the District to post the minimum and maximum projected salary in all job listings or advertisements. The salary projections must be the lowest and highest salary or hourly pay the employer “in good faith believes” it would pay for the role.

In the wake of the #MeToo movement, New York, like other states, enacted legislation aimed at limiting employers’ use of non-disclosure provisions in settlement agreements to resolve claims of workplace discrimination. Recently, Governor Kathy Hochul signed legislation that amends those existing laws to further strengthen the restrictions on non-disclosure provisions in settlement agreements for discrimination, harassment, and retaliation claims. The legislation also extends the statute of limitations for filing such claims with the state enforcement agency. 

The Texas Supreme Court has issued an opinion holding that “third-party testing entities hired by an employer do not owe a common-law negligence duty to their clients’ employees.”  Houston Area Safety Council, Inc, v. Mendez, 671 S.W.3d 580, 590 (Tex. 2023) (“Mendez”).  In a positive development for employers that drug test their employees, the Mendez opinion also supports prior Texas Supreme Court precedent that employers who conduct in-house drug testing do not owe a duty to employees.  Mission Petroleum Carriers, Inc. v. Solomon, 106 S.W.3d 705 (Tex. 2003) (“Solomon”).  In other words, it logically follows that if an employer does not owe a duty to employees for results of drug tests administered in-house, a third-party tester hired by that employer does not owe a legal duty to employees for drug tests. 

On September 29, 2023, the U.S. Supreme Court granted certiorari in Bissonnette v. LePage Bakeries Park St. LLC, a case from the Second Circuit Court of Appeals involving application of the Federal Arbitration Act’s (“FAA”) exemption for transportation workers.

On August 29, 2023, the California Court of Appeal issued a new opinion that, once again, changes how parties litigate and settle claims brought under California’s Private Attorneys’ General Act (“PAGA”).  See Robert Lacour v. Marshalls of California, LLC, et al., 94 Cal.App.5th 1172, 313 Cal.Rptr.3d 77.

A recent opinion out of the Texas 14^th Court of Appeals has raised the bar for employers trying to enforce arbitration agreements electronically signed by employees.  See Houston ANUSA, LLC d/b/a AutoNation USA Houston v. Shattenkirk, No. 14-20-00446-CV, 2023 WL 5437714 (Tex. App.—Houston [14th Dist.] Aug. 24, 2023, no pet. h.).

On June 14, 2023, Texas Governor Greg Abbott signed HB 2127, the Texas Regulatory Consistency Act (“TRCA”), into law. Once the TRCA goes into effect on September 1, 2023, it will preclude all municipalities and counties in Texas from adopting or enforcing ordinances regulating conduct with respect to certain subject matters, including labor.

California employers: take notice.  On July 24, 2023, the Office of Administrative Law approved changes to the Fair Employment and Housing Act (FEHA) regulations governing how California employers can use and consider criminal history in employment decisions.  These new changes, modifying Cal. Code Regs. Tit. 2, § 11017.1, go into effect on October 1, 2023.

The U.S. Supreme Court’s landmark 2020 decision granting anti-discrimination protections for LGBTQ+ workers left room for future challenges by religious employers.

Virginia joined the list of states limiting employers’ ability to include confidentiality and non-disparagement provisions in employment agreements for matters related to sexual harassment.  But the law’s scope seems limited, and does not appear to apply to post-employment severance agreements.

Last week, the Ninth Circuit issued a decision holding that California employers can require employees to enter into mandatory arbitration agreements as a condition of their employment.  In the decision, Chamber of Commerce v. Bonta, No. 20-15291 (9th Cir., Feb. 15 2023), a three-judge panel reversed the Ninth Circuit’s own prior decision and found that Assembly Bill 51 (AB 51), which sought to impose criminal and civil penalties on employers who require employees to enter into such agreements, is preempted by federal law.

On February 9, 2023, the Department of Labor Wage and Hour Division issued a Field Assistance Bulletin concerning the application of certain provisions of the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA) to teleworking employees.  The bulletin provides guidance on compensable time, breaks for nursing employees who are teleworking, and FMLA eligibility rules for remote employees. 

On December 21, 2022, New York Governor Kathy Hochul signed New York State’s pay transparency bill into law.  Effective September 17, 2023, the new law will require employers to disclose the anticipated compensation range for any advertised job posting.  See N.Y. Lab. Law § 194-b.

In Hamilton v. Dallas County, 2020 U.S. Dist. LEXIS 223831, 2020 WL 7047055, at *2 (N.D. Tex. Dec. 1, 2020), a federal district court judge dismissed a lawsuit by female Dallas County detention officers alleging that a gender-based decision related to weekend work schedules violated Title VII of the Civil Rights Act of 1964.  At the root of that case was the fact that, although male and female officers received the same number of days off during a workweek, only male officers were permitted to take both weekend days off.  The female officers complained about the scheduling policy, but the County maintained the policy, citing safety concerns. 

Among the new employment laws in effect this new year is the expansion of the California Fair Employment and Housing Act (“FEHA”) to include “reproductive health decision-making” in the list of classifications protected by the FEHA.  Accordingly, the FEHA now expressly prohibits discrimination, harassment, and retaliation based on employees’ reproductive health-decision-making.  The FEHA also makes it unlawful for an employer to require, as a condition of employment, continued employment, or a benefit of employment, the disclosure of information relating to an applicant’s or employee’s reproductive health decision-making.

In January 2021, the Ninth Circuit upheld a 2018 ruling by the Federal Motor Carrier Safety Administration (“FMCSA”), which found that federal law preempts California state meal and rest break laws as applied to drivers of property-carrying commercial motor vehicles.  A few months later, the United States Supreme Court denied a petition challenging the Ninth Circuit’s decision.  We previously wrote about the Ninth Circuit’s ruling, and the Supreme Court’s denial, in a post that you can read here.

On December 7, 2022, President Joe Biden signed the Speak Out Act (the “Act”), which limits the enforceability of pre-dispute non-disclosure and non-disparagement clauses covering sexual assault and sexual harassment disputes. The bipartisan Act was previously passed by the Senate and the House of Representatives by an overwhelming majority.

A Virginia federal court last week dismissed a plaintiff’s hostile work environment claims because the plaintiff failed to check the “continuing action” box or specifically mention “harassment” or “hostile work environment” in her EEOC charge.

On October 24, 2022, the Ninth Circuit Court of Appeals issued an opinion in Cadena v. Customer Connexx LLC holding that the time employees spend booting up their computers is compensable under the Fair Labor Standards Act (the “FLSA”). The decision reverses a 2021 Nevada district court’s decision that came to the opposite conclusion, holding that time spent initiating computers was not compensable.

The Department of Labor’s Wage and Hour Division is expected to propose new rules on independent contractor classification and overtime entitlement requirements in the coming weeks.  The proposals would alter the qualifications for certain employees to receive overtime payments under the Fair Labor Standards Act when they work in excess of 40 hours in one week.

On September 15, 2022, the United States Department of Labor (“DOL”) announced an update to the Occupational Health and Safety Administration’s (“OSHA”) Severe Violator Enforcement Program (“SVEP”).

Last Thursday, the U.S. Department of Labor (“DOL”) published in the Federal Register its newly-proposed rule regarding independent contractor vs. employee classification under the Fair Labor Standards Act (“FLSA” or the “Act”).  Businesses have anticipated the release of this proposed rule from the Biden administration’s DOL since the DOL withdrew a more employer-friendly, Trump-era independent contractor rule in May 2021 that had not yet gone into effect.

We previously posted about Washington, D.C.’s new law governing non-competes, which became effective on October 1, 2022.  D.C. employers, however, should be aware of a provision buried in the law that has nothing to do with non-competes and requires action by the end of this month.   

Since we last reported on the delay of the District of Columbia’s Ban on Non-Compete Agreements Act of 2020 (the “Act”), the D.C. Council passed the Non-Compete Clarification Amendment Act of 2022 (the “Amendment”), effective October 1, 2022, which significantly rolled back some of the more prohibitive features of the original 2020 version of the Act. 

The Fourth Circuit recently issued a significant decision, Williams v. Kincaid, which held that the Americans with Disabilities Act (ADA) protects individuals with gender dysphoria, becoming the first federal circuit in the country to do so.

On August 16, 2022, the U.S. Court of Appeals for the Seventh Circuit affirmed summary judgment to Wal-Mart Stores East, L.P. (Walmart), who was accused by the Equal Employment Opportunity Commission (EEOC) of engaging in sex discrimination under the Pregnancy Discrimination Act and the Civil Rights Act of 1964 by offering temporary light duty to employees who were injured on the job, but denying a similar accommodation to pregnant employees. 

The Centers for Disease Control (“CDC”) announced major changes to its COVID-19 guidance on August 13, providing additional flexibility for employers seeking a return to normal operations after the pandemic.

Disfavor toward employer/employee nondisclosure agreements (NDAs) has been an increasingly popular sentiment expressed by state legislatures over the last few years, and 2022 has seen the trend continue.  Legislation in some states may void and make unenforceable certain employer/employee nondisclosure agreements; it may prohibit employers from requiring employees to enter into such agreements; or it may outright prohibit employers from executing the agreements, for example in employment contracts and separation agreements.  Just over halfway through 2022, Hawaii, Maine, Oregon, and Washington have issued or amended state laws voiding, prohibiting, or restricting employer/employee nondisclosure agreements.

Earlier this month, the U.S. Supreme Court in Southwest Airlines Co. v. Saxon unanimously held that a ramp supervisor who frequently handled cargo for an interstate airline company was exempt from coverage under the Federal Arbitration Act (FAA) because she belonged to a “class of workers engaged in foreign or interstate commerce.”  9 U.S.C. § 1.

On May 2, 2022, the Supreme Court granted certiorari to Helix Energy Solutions Group Incorporated after Helix lost before the en banc United States Court of Appeals for the Fifth Circuit in a sharply-divided opinion last year.  In Hewitt v. Helix Energy Solutions Grp., Inc., 15 F.4th 289 (5th Cir. 2021), the Fifth Circuit held 12-6 that employers must guarantee their day-rate workers a minimum weekly payment that is reasonably related to the amount those workers actually earn in that timespan for their workers to be exempt from the FLSA’s overtime requirements.  This minimum weekly payment must be a predetermined amount that does not change based on the number of days or hours actually worked, if the employer wishes to enjoy the FLSA’s exemptions to paying its day-rate workers overtime.

On April 9, 2022, Maryland became just the tenth state (in addition to the District of Columbia) to enact a paid family and medical leave law that covers private-sector workers, after overriding Governor Larry Hogan’s (R) veto.

On October 4, 2021, the United States Supreme Court denied certiorari on a petition challenging the Ninth Circuit’s ruling that California’s strict meal and rest period rules do not apply to commercial truck drivers engaged in interstate commerce.  The Court’s denial of the petition leaves in place a decision that came as a welcome sigh of relief for employers in the trucking industry.

On March 14, 2022, the Equal Employment Opportunity Commission (“EEOC”) issued a technical assistance document providing guidance when it comes to claims of discrimination against employees and applicants with caregiving responsibilities in connection with the COVID-19 pandemic (“Guidelines”).  The Guidelines, entitled “The COVID-19 Pandemic and Caregiver Discrimination Under Federal Employment Discrimination Laws”, examine discrimination against employees and applicants based on pandemic caregiving responsibilities, noting that such discrimination may violate Title VII of the Civil Rights Act of 1964 (Title VII), Titles I and V of the Americans with Disabilities Act of 1990 (ADA) or Sections 501 and 505 of the Rehabilitation Act of 1973 (Rehabilitation Act), or other federal laws.

Lost in the weeds of recent COVID-19 news is the increasing number of states and localities that have legalized medicinal and recreational use of marijuana.  Such legalization brings with it varying degrees of worker protections and employer obligations.  Philadelphia, PA and the state of Montana are two of the latest jurisdictions to add their names to the sprouting list of jurisdictions that protect not only medical use, but also recreational use of marijuana.  These protections will undoubtedly usher in a new wave of test cases and compliance questions, particularly as many workplaces shift to remote models.

On September 9, 2021, the Fifth Circuit issued a 12-6 opinion in Hewitt v. Helix Energy Solutions Group, Inc., 15 F.4th 289 (5th Cir. 2021) that clarified the requirements for day rate workers to fall within one of the FLSA’s exemptions from overtime payment.  This ruling was hotly-contested because it made clear that employers must take additional steps to properly classify their day rate workers as exempt employees, even when those employees clearly exceed the financial threshold of the highly compensated exemption.  Many expect the decision to substantially affect the course of day rate FLSA litigation in the Fifth Circuit, especially misclassification disputes within the energy industry.

On December 27, 2021, the Center for Disease Control and Prevention (CDC) updated their isolation and quarantine recommendations for the general public, including more limited time periods for quarantine and isolation periods.  On December 30, 2021, the California Department of Public Health (CDPH) released updated guidance to conform to the new CDC guidelines but added additional requirements, including testing to exit isolation or quarantine after the fifth day (which the CDC now acknowledges is the “best approach” but does not require as part of its formal guidance).  Notably, the new guidance also introduces a distinction between boosted and non-boosted individuals for the first time.  The key requirements and takeaways from this new guidance are detailed below.

On December 6, 2021, New York City Mayor Bill de Blasio surprised employers by announcing on MSNBC’s “Morning Joe” that, starting December 27, NYC will mandate vaccines for all private-sector workers.  The mandate is expected to affect around 184,000 employers.

New York Governor Kathy Hochul has signed S.B. 4394, an amendment of Section 740 to the New York Labor Law that dramatically expands safeguards against employer whistleblower retaliation. The new law expands protected activity that entitles an employee to whistleblower protection, the categories of covered workers protected by the statute, and the definition of prohibited retaliatory actions, among other changes.  The new law takes effect on January 26, 2022. Some of the key provisions that New York employers should carefully review are listed below.

Employers with 100 or more employees must implement mandatory vaccination policies by early December under the Emergency Temporary Standard released by OSHA.

Federal contractors can make their own determinations on vaccination exemptions and do not need to terminate employees who refuse vaccination, according to new guidance from the Biden Administration.

On October 11, 2021, Governor of Texas, Greg Abbott, issued Executive Order GA-40, which proscribes entities from compelling individuals to receive the COVID-19 vaccine who object “for any reason of personal conscience, based on a religious belief, or for medical reasons, including prior recovery from COVID-19.” Offending entities can be fined up to $1,000 for failing to comply with this order.