March Updates

Third Circuit: Key Employer Defense in Hostile Work Environment Cases Narrowed

In O’Brien v. The Middle East Forum, the Third Circuit Court of Appeals ruled an employer cannot use the Ellerth/Faragher affirmative defense if the harasser is a “proxy” or “alter ego” of the employer and is strictly liable. The Ellerth/Faragher affirmative defense allows employers to avoid liability in hostile work environment claims if they exercised reasonable care to prevent and promptly correct harassing conduct and the employee unreasonably failed to use the employer’s established harassment prevention and correction procedures. Here, a high-ranking male colleague was accused of sexually harassing the female plaintiff. While the Court did not define what a proxy or alter ego is, they did point to several factors, such as: 1) the alleged harasser was Director, CEO, and Secretary of the Board; 2) he was the second-highest employee; 3) he created and implemented office policies; and 4) he was the public face of the organization and “the man in charge.” The Court added only those with exceptional authority and control meet this standard. Employers should be aware that harassers who meet such a high standard will lead to strict liability for the employer.

 

Sixth Circuit: Federal Contractor COVID-19 Vaccine Mandate Invalidated in Three States

On January 12, 2023, in Kentucky v. Biden, the Sixth Circuit Court of Appeals upheld a lower court injunction blocking the federal contractor vaccine mandate specifically in Kentucky, Ohio, and Tennessee and two Ohio sheriffs’ offices. The federal government has continued to stay enforcing the mandate nationwide pending ongoing litigation.

 

Alabama: Employee Handbook Termination Procedures Can Create a Contract

On January 13, 2023, in Davis v. City of Montevallo, the Alabama Supreme Court said that employee handbook language detailing employee termination procedures created a contract between an employer and the at-will employee. There, termination procedures in the handbook included the word “shall” indicating the employer’s intent to make the procedures binding, in contrast to using “may” throughout other handbook policies. Additionally, the handbook’s disclaimer language was not broad enough to counteract the language of the termination policy. Similarly, language reserving the right to change its procedures in the future did not make the promise to follow existing procedures unenforceable.

 

California: Non-Emergency COVID-19 Rule in Effect

On February 3, 2023, Cal/OSHA’s non-emergency COVID-19 rule went into effect when it was approved by the Office of Administrative Law. The non-emergency rule removed the requirement for exclusion pay, aligned certain COVID-19 definitions with the California Department of Public Health (CDPH), and revised rules surrounding outbreaks. The rule will remain in effect through February 3, 2025, with recordkeeping rules in effect through February 3, 2026. Review Cal/OSHA’s website for additional resources.

 

California: Pay Data Reporting FAQs Updated

California’s Civil Rights Department updated its FAQs on pay data reporting to answer questions about the changes brought about by SB 1162. In addition to job posting requirements, SB 1162 requires covered employers to submit a pay data report regardless of whether they are required to submit an EEO-1 report. Those who were required to submit an EEO-1 report can no longer use it to satisfy the pay data reporting requirement. The updated FAQs clarify the obligations for multiple-establishment employers, mean and median hourly rates, labor contractor requirements, and increased penalties.

 

California: Court of Appeal Limits Arbitration Agreement “I Do Not Recall Signing” Defense

On January 19, 2023, in Iyere v. Wise Auto Group, the California Court of Appeal ruled plaintiffs who do not provide evidence that their signatures were forged or otherwise inauthentic fail to show that their arbitration agreements were unenforceable. Here, the plaintiffs claimed they received a large number of documents to sign on their first day of work and signed so quickly that they did not recall ever reading or signing the arbitration agreements. The Court found that the plaintiffs did not deny that the handwritten signatures were not theirs. Employers wishing to take advantage of this limitation should ensure that their handwritten and e-signature procedures are secure and capable of proving so in court.

 

San Francisco, CA: FAQs for Paid Military Leave

The San Francisco Office of Labor Standards Enforcement (OLSE) published FAQs for the new Military Leave Pay Protection Act (MLPPA). The MLPPA went into effect on February 19, 2023 and requires San Francisco employers with 100 or more employees worldwide to provide differential pay for employees on military leave for up to 30 days. The FAQs address calculating and timing the payment of supplemental compensation. There is also a recommendation that employers consider requesting a leave and earnings statement from eligible employees verifying gross military pay. In addition to the actual compensation, the FAQs also address employee and employer notice requirements, recordkeeping, and the fact that there are no job protections in the law, although the federal Uniformed Services Employment and Reemployment Rights Act (USERRA) does prohibit discrimination and retaliation for taking military leave.

 

Denver, CO: New Wage Theft Ordinance Expands Protections

On January 10, 2023, a new ordinance expands wage theft protections for Denver workers. Now, anyone may file a complaint regarding failure to pay workers in Denver with the city auditor, who can hold any entity liable that has directly or indirectly contracted for labor and is the beneficiary of that labor. The city auditor may also initiate investigations without a worker complaint. There are also notice and recordkeeping requirements, as well as a prohibition against retaliation for exercising rights under the ordinance. Employees may also now file a private action in litigation without making a claim to the city auditor.

 

District of Columbia: Tip Credit Elimination Act Delayed to May 1^st

The District of Columbia Council postponed the effective date the “Tip Credit Elimination Act” (Initiative 82) from January 1, 2023 to May 1, 2023. Congress has authority to review most D.C. voter initiatives, but the review timing was impacted by the delay in electing a speaker of the House. The current maximum tip credit of $10.75 per hour will be reduced to $10.10 per hour on May 1, with the tip credit ultimately eliminated by 2027.

 

Illinois: 5-Year Statute of Limitations for Biometric Information Privacy Act Claims

On February 2, 2023, in Tims v. Black Horse Carriers, the Illinois Supreme Court ruled a five-year statute of limitations applies to all provisions of the Biometric Information Privacy Act (BIPA). BIPA regulates the collection, possession, storage, disclosure, sale, and retention of biometric data. Employers should continue to watch for additional developments in pending BIPA cases. Other cases before the Illinois Supreme Court seek to address when the statute of limitations starts tolling – the first time an individual’s data is collected or each time such data is collected. This has implications for employers who use biometrics for facility access or for timeclock procedures, for example.

 

Maryland: Expanded Definition of Sexual Harassment

Maryland’s SB 450 reduced the standard for sexual harassment from “severe or pervasive” conduct to the lesser “totality of the circumstances” test. This reduced standard will make it easier for plaintiffs to support claims of sexual harassment. Instead of having to show the conduct was so offensive and threatening that working was nearly impossible, plaintiffs merely have to show that a reasonable person would view the workplace as abusive or hostile. Employers will need to update their harassment policies as well as their training to notify employees that even fleeting remarks may be considered unlawful harassment.

 

Maryland: Expanded Definition of Reasonable Accommodation

Maryland’s HB 278 now requires employers to reasonably accommodate an applicant’s disability. This change brings Maryland’s reasonable accommodation standard in line with the federal standard which also requires accommodations for applicants. The law also removed the requirement that an applicant has to be otherwise qualified in order to receive a reasonable accommodation. Employers do not have to comply if the reasonable accommodation would cause an undue hardship. Employers should update their policies and train appropriate personnel on the requirements.

 

Minnesota: Enactment of CROWN Act Prohibits Hair Discrimination

As of February 1, 2023, HF 37 prohibits discrimination based on hair texture and hairstyles. Minnesota’s Human Rights Act’s definition of race is now “inclusive of traits associated with race, including but not limited to hair texture and hair styles such as braids, locs, and twists.” Minnesota employers should update their dress code and anti-discrimination policies for compliance with the new law.

 

Bloomington, MN: Updates to Paid Sick Leave

Bloomington’s paid sick leave law goes into effect July 1, 2023, but changes are already occurring. Employers may choose to have employees accrue leave on a pro-rata basis. Accrued and used leave amounts will be mandated to appear on employees’ paystubs. Penalties and damages for violations have also been specified. Employers should ensure paid sick leave policies and practices are up to date once the law goes into effect.

 

St. Paul, MN: Updates to Paid Sick Leave

As of February 24, 2023, St. Paul’s paid sick leave law was amended. Employees accrue leave on hours worked in St. Paul – even while working remotely in St. Paul, and employers must allow employees to use leave when they are scheduled to work in St. Paul. However, employers may permit employees to use leave if working outside of St. Paul. The amendment updated the definition of “reporting year,” so employers must notify employees what “year” they use for compliance purposes. There are also updated rules for switching between accrual and frontloading methods, leave carryover, expanded anti-retaliation protections, and enforcement.

 

New Jersey: No ABC Test for Commissioned Real Estate Salespeople Making State Wage Claims

On February 9, 2023, in Kennedy v. Weichert Co., the Superior Court of New Jersey ruled the ABC test for determining independent contractor status does not apply to state wage claims made by fully commissioned real estate salespeople. Here, the plaintiff worked as a fully commissioned salesperson for a licensed real estate broker under an executed independent contractor agreement. The plaintiff brought a class action against the broker alleging unlawful deductions from their wages. The Court determined the ABC test did not apply because New Jersey’s Brokers Act stated real estate salespeople are required to work under the supervision of a licensed real estate broker and can only accept a commission, thereby compelling the conclusion that every commissioned real estate salesperson was an employee under the ABC test. The Court remanded the case for further development of the facts before it was willing to determine the applicable standard for determining employment status under the circumstances.

 

New York: State COVID-19 Vaccination Mandate for Healthcare Professionals Struck Down

On January 13, 2022, in Medical Professionals for Informed Consent v. Bassett, a New York State Supreme Court Judge invalidated the New York State Department of Health regulation mandating certain healthcare professionals be “fully vaccinated” against COVID-19 because there was no authority to do so. Specifically, coronaviruses are not covered under the Public Health Law which is what gives the Health Commissioner authority to implement a mandatory immunization program.

 

New York, NY: New Criminal Prosecutions for Wage Theft

On February 16, 2023, the New York City District Attorney announced the creation of the “Worker Protection Unit” and “Stolen Wages Fund” to seek criminal charges against companies and individual executives and managers who fail to properly pay employee wages. It is currently unclear what standards will be applied to determine when criminal charges will be brought. Continue to look for updates on this topic.

 

---

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase