capitoldas2Well, the Connecticut General Assembly ended earlier this week and, as predicted, it ended with a whimper and not a bang.  Many employment law proposals failed to receive votes, including those on minimum wage and Paid FMLA, leaving many employers (and the CBIA) breathing a bit of a sigh of relief.

I’ve previously recapped most of the bills here and here, so I’m only going to recap the session here in the interests of time.

  • The Governor is expected to sign a bill expanding the requirements for employers to provide reasonable accommodations to pregnant employees. Again, I’ve recapped the measure here but this is probably the most significant bill to come out of the session regarding employers.
  • There will be no minimum wage hike and the introduction of Paid FMLA failed to get enough votes this term.  There is little doubt that the split in the Senate along party lines slowed momentum down for what was going to be the Democrat party’s signature achievement this session.
  • Also not getting votes this session was a bill that would have prohibited many employers from running credit checks on prospective employees and a bill that would required employers to give advance notice to employees about their work shifts.
  • Another bill that would change whistleblower protections in Connecticut also failed to clear the House.

Some of the other technical changes, to workers compensation or unemployment compensation, offer up a mixed bag. I’ve covered them in a prior post.

A special session is still on the way and it’s possible that some measures will get plopped into an “implementer” bill for the budget like it did a few years ago.  But my gut tells me that the budget is unlike to be used this way given the significant financial issues in play.  Nonetheless, employers should continue to watch for any developments in this area until the special session is closed.

Well, it was bound to happen.  After nine years of writing the blog on a near daily schedule, some work and personal commitments interfered with my blog writing schedule. But never fear, more new posts from me are now right around the corner.

In the meantime, one of our summer associates, James Joyce, joins the blog today to give an update on a a law passed last year regarding pay secrecy. My thanks to James for his work on this.  James is finishing up his law degree at University of Connecticut.  

joyceLoyal readers may recall that about a year ago, Connecticut’s “Act Concerning Pay Equity and Fairness” Public Act 15-196, became law.   Dan has already blogged about the nuts and bolts of the “Pay Secrecy Bill” and its potential impact on employers.

And, as Dan highlighted, employers need to be mindful of this legislation because it created a private cause of action in court for any violation.  That is where today’s post comes into the picture.

One of the first lawsuits alleging violations of the “Pay Secrecy Bill” was recently filed in Superior Court in Stamford (the case has since been removed to Federal District Court).   The lawsuit raises other issues as well, but for today’s post, we’ll focus on the “Pay Secrecy” claim.

So what’s in this lawsuit? Well, the plaintiff alleges that her former employer maintained a “Pay Secrecy Policy” forbidding employees from discussing their salaries despite the enactment of the “Pay Secrecy Bill” in July 2015.

Specifically, the allegations include a run-in with the human resources (HR) department due to comments the Plaintiff made about salaries and her former employer’s view that this was inappropriate and none of the plaintiff’s business.  The plaintiff received an “Employee Warning Notice” from HR and HR went on to tell the plaintiff she could not discuss her wages or her co-workers’ wages.

Additionally, in February 2016, it is alleged that a former co-worker of the plaintiff was reprimanded for a conversation she had with another employee about the company’s paid time off/holiday policy.  The former co-worker was allegedly told directly by the CEO and by HR that this conversation or any similar conversations violated the company’s policy prohibiting employees from discussing compensation with other employees

Obviously, whether or not these facts are true — or rise to a level of violating the law — will play out in court.  But these types of incidents are just the sort of things that employers need to be aware of to avoid “Pay Secrecy” violations.  The law prohibits employers from implementing policies that prevent employees from, or disciplining employees for, engaging in conversations about salary-related information.

Because this case was recently filed there is no way to predict how the court will rule.  Nevertheless, that does not mean this case should be ignored until it is decided.  Employers should remind their human resources staff and managers of this new Connecticut law.

The downside will be cases like this where the employer may have to spend time and money investigating and defending themselves against the alleged “Pay Secrecy” violations.  Employers also risk being found liable for compensatory damages, attorney’s fees and costs, punitive damages, and any legal and equitable relief the court deems just and proper related to the alleged violations.

doctorContinuing my review of new employment-related bills is a measure that limits the use of non-compete agreements for doctors.

Anyone who tracks bills knows that the name on the bill sometimes doesn’t match the content. Senate Bill 351 entitled “AN ACT CONCERNING MATTERS AFFECTING PHYSICIANS AND HOSPITALS” is a good case in point.

Seems innocuous enough, right? But through various amendments and compromises, it actually contains specifics on what can or cannot be in a non-compete agreement for physicians.  (For limits in other professions, see prior posts here and here.)

In general, the bill sets up a one year and 15 mile limit for physician non-compete agreements for any agreement after July 1, 2016.

The bill does not specify what is to happen to existing agreements that may have broader restrictions; will courts find that they violate the new ‘public policy’ of Connecticut, as the attorneys at the Working Together blog suggest? That remains to be seen.

For employers that have yet to draw up agreements, arguably there is a 60-day window to do so but given that this may now become law, it might be too little too late.  (I have not heard whether the governor intends to veto this measure.)

For existing agreements, it appears that the review will attempt to mirror common law with three standards (note that the term “covenant not to compete” is actually defined as being applicable only to physicians).  These standards are:

A covenant not to compete is valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy.

The bill goes on to state that:

A covenant not to compete that is entered into, amended, extended or renewed on or after July 1, 2016, shall not: (A) Restrict the physician’s competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such physician practices;

Simple enough, right? Well, not exactly, the agreement also shall not:

(B) be enforceable against a physician if

(i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or

(ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.

That’s a lot of “ands” and “unlesses” if you’re keeping track at home.  But one thing I’m sure of is that a “for cause” termination allows for more flexibility.

But what is “for cause”? Can it be defined by the employer? Or is the legislature using another definition of “cause”? That, unfortunately, is a question for another day.

For now, physician groups, hospitals and other health care providers need to track signing of the measure and, if signed, review all existing agreements and form agreements for compliance with this new potential law.  The one-year/15 mile restriction should become the norm.

And if you have a strong opinion against this measure, now would be a good time to lobby the governor to veto it.

 

GA2It’s been a long-time coming but the General Assembly finally approved of a measure that would allow employers to pay employees on a bi-weekly basis without receiving prior CTDOL approval.

The provision, part of a set of “technical” revisions to various Department of Labor matters, is long overdue.

Several employers had moved to a bi-weekly payroll scheme without realizing that they needed approval from the CTDOL beforehand.  That approval won’t be required anymore (assuming this bill is approved by the governor).

I’ve previously discussed the requirement so now employers who have been wary about seeking such approval, can just move ahead on their own.

Senate Bill 220 also makes lots of technical changes to the unemployment compensation scheme and even to drug testing (getting rid of the suggesting that the DOL develop some regulations in this area).  These probably won’t be of interest to most employers, but it’s worth a look through the bill summary to see if something else touches on your industry.

The measure will become effective when the Governor signs the overall bill.  (Other provisions in the bill go into effect October 1, 2016.)

cgaOver the next week or so, I’ll be providing updates on various bills to pass (or fail) at the state general assembly.  They’re coming in fast and furious so patience is the order of the day.

But as we review various bills, there are employment-related aspects in places that you might not think. The first of these is in a human trafficking bill (House Bill 5621).  After passage in the House last month, this bill passed the state Senate last night. It now moves to the Governor’s office for his signature.

Section 5 of the bill sets forth new requirements for hotel (and similar lodging) operators to train and educate their employees.

Specifically, it requires that the employees receive training at the time of hire on the “(1) recognition of potential victims of human trafficking, and (2) activities commonly associated with human trafficking.”

But in addition to training, the hotel operator shall also conduct “ongoing awareness campaigns” for employees on the “activities commonly associated with human trafficking.”

Of course, the legislation is silent as to what exactly are the “activities commonly associated with human trafficking”, though prostitution is obviously mentioned in one aspect of the legislation.  It is unclear how detailed this training and the awareness campaign must be.

Beyond that, on or before October 1, 2017, and annually thereafter, hotel operators must “certify that each employee of any such establishment has received the training prescribed by this section in each employee’s personnel file.”

But again, it does not appear that this training needs to occur yearly — only at the time of hire — and only that the hotel operator certify that the training happened at the time of hire.  So the bill has a gap; current employees do not appear to need to be trained in this. And the employer must only conduct “awareness campaigns” which perhaps can be as simple as an email reminder or inclusion in employee handbooks.

In any event, hotel operators should consider updating their hiring packages to include this aspect and should update their employee handbooks to have a provision in there.

Upon signature from the Governor (which is expected), this provision becomes effective October 1, 2016.

Lastly, I would be remiss if I did not mention the efforts of both the Connecticut Bar and the American Bar Associations on raising awareness and seeking legislation on this important issue.   Members of the CBA testified at the legislature on this bill and its passage last night was an end product of their efforts.

generalassemblyThe 2016 Connecticut General Assembly is about one month from ending its term so it’s a good opportunity to see what bills are still floating out there.

I’ll do a bigger recap when we get close to the end of the session but if you have any interest in the bills (and, if you’re an employer, you should), you should contact your local representative as soon as possible.

  • House Bill 5261 is an interesting one and comes in response to a crackdown by the CTDOL on the employment relationship local sports leagues have with coaches and referees — namely, by saying that such leagues are responsible for unemployment compensation.  This bill exempts coaches and referees who work for private or public athletic programs, other than public school districts, from employer-employee rules for purposes of unemployment taxes and compensation.
    Under the bill, according to the Office of Legislative Research, “as of October 1, 2016 no employer-employee relationship is deemed to exist between certain operators of organized athletic activities and certain individuals employed as coaches or referees of those organized athletic activities, except such operators and individuals can mutually agree, in writing, to enter into an employer-employee relationship.”
    The bill has made it out of the Labor Committee and is still awaiting a vote out of the Finance Committee.  For more on the bill, see this recap from the CBIA.
  • Senate Bill 40 would limit the circumstances in which most employers can check the credit of job applicants and employees. But it also broadens the circumstances in which employers can require checks of people applying for or working in positions that would give them access to museum and library collections or prescription drugs and other pharmaceuticals. The bill was voted out of the General Law Committee on April 5th and should be watched carefully.
  • Senate Bill 211 is one of those bills we’ve seen before; this would allow employers to pay employees by payroll cards, instead of by check, which could help reduce the use of predatory “paycheck loans” out there.    It too has made it out of committee and is awaiting a vote on the floor.
  • Senate Bill 221 would implement a paid family and medical leave program in the state.  It’s a complex bill but considering the publicity of such efforts in other states, this is worth a close follow.   But beyond that, this bill goes much further than has been previously reported as it would expand the existing FMLA law to cover all employers of two or more employees (down from 75) and would prohibit employers from requiring employees to use any paid time off as part of their FMLA leave.  Not surprisingly, business groups like the CBIA oppose the measure while other interest groups have showed strong support.

What else is going on? I’ll have more in an upcoming post.

Malloy Signs Intern Anti-Discrimination Bill
Malloy Signs Intern Anti-Discrimination Bill

Capitol Watch — The Hartford Courant’s political site – tweeted the following yesterday:

And a review of the Governor’s website reflects that approval in the bill notification release. (I read them so you don’t have to!)

So, what does that mean for employers? Well, I’ve covered the bill before so I won’t recap everything here.

But the bill’s provisions now become effective October 1, 2015.  Thus, employers who regularly use interns should update their employee handbook and anti-harassment provisions to explicitly cover interns.

One of the other things to consider that hasn’t been discussed much is the extent to which the bill’s definition of “intern” may get adopted in the context of establishing whether an intern is really an “employee” for wage/hour purposes.

What do I mean? Well, back in 2012, I talked a lot about how employers could properly structure internship programs. In that post, I noted that there were six factors that the U.S. Department of Labor would look at:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Now, let’s compare this with the definition of “Intern” in the new anti-discrimination bill.  An intern is defined as an “individual who performs work for an employer for the purpose of training, provided”:

  1. the employer is not committed to hire the individual performing the work at the conclusion of the training period;
  2. the employer and the individual performing the work agree that the individual performing the work is not entitled to wages for the work performed; and
  3. the work performed:
    1. supplements training given in an educational environment that may enhance the employability of the individual,
    2. provides experience for the benefit of the individual,
    3. does not displace any employee of the employer,
    4. is performed under the supervision of the employer or an employee of the employer, and
    5. provides no immediate advantage to the employer providing the training and may occasionally impede the operations of the employer.

If you track each item carefully, you’ll notice that they are actually fairly similar. That’s a good thing.  While there are subtle differences, it’s unlikely that those differences will be meaningful in their application.

As a practical matter, that means employers that adopt the defintiion of “intern” in the new state statute are likely to be following the federal interpretation as well, reducing the risk of a wage/hour claim as well.

The bottom line, however, is that employers who just use interns without much worry as to the liability that using interns may create should rethink their practices. The new law is yet another area where new rules will make using those interns may expose employers to possible claims.  Is it a small risk? Perhaps. But small risks can turn into big ones if employers aren’t mindful.

senate2003While I normally make my year-end reflections at, well, year end, I can’t help but take this moment to see the big picture: We’re hearing an awful lot about restrictive covenants.

These covenants — often in the shape of non-compete clauses or non-solicitation (of employees or customers) clauses — have become popular because companies are looking to protect their financial interests.

Connecticut — despite its reputation for being anti-business — still has relatively strong protections for employers who want to use these clauses for their employee.

But these clauses are coming under attack more and more as their use becomes more widespread.

Jay Wolman, on The Legal Satyricon, noted that non-disparagement clauses in separation agreements may be one area where courts are reluctant to enforce. As a result, employers may want to use severability clauses to have the agreements upheld even if one provision is overbroad:

These clauses are very common, but likely are not long for this world.  In the interim, employer counsel may want to rethink the standard severability clause.  Although employers are certainly keen on obtaining as much a release as possible, it may be time to reconsider whether the agreement should survive if the former employee can simply ignore these clauses.

The ABA Journal of Labor & Employment Law also recently published an article on “Developing Trends in Non-Compete Agreements and Other Restrictive Covenants.” As the authors note, courts still tend to enforce the covenant “if it protects a legitimate business interest, the employee received consideration for the covenant, it is narrowly tailored, and the time and territorial limitations are no greater than necessary to protect the employer’s business interests.”

Despite this, the authors are quick to highlight the fact that each state interprets such things differently.

The New York Times even last year noted the trend of employers using these clauses more.  And not in a good way.

With this publicity in mind, Connecticut is again taking the lead — at least from a federal perspective.

Slate reported last week that Senator Chris Murphy introduced legislation that would ban non-compete agreements altogether for workers who make less than $15 per hour.

It would also require companies to let potential hires know ahead of time that they will be required to sign a non-compete agreement.

The bill, called the Mobility and Opportunity for Vulnerable Employees Act (MOVE) is also co-sponsored by Connecticut’s other senator, Richard Blumenthal.

At a press conference, Senator Murphy said that the bill was necessary in a free labor market.  “If workers can’t go to a competitor for a promised higher wage, then the market fluidity — the labor fluidity that creates upward pressure on wages — disappears,” Murphy said. “If workers are locked into jobs because of non-compete clauses, then there is no reason for companies to raise their wages.”

Without bi-partisan support, the odds of this bill passing are somewhere between never and no.  But don’t be surprised if we see this pop up again at a state level in the next legislative session.

As I said before, the notion that this might be a quiet year for employment law legislation at the Connecticut General Assembly has long since left the train station.

Indeed, we’ve appear to be swinging completely in the opposite direction. Anything and everything appears up discussion and possible passage this year — including items that really stood no chance in prior years.

GA2I’ll leave it for the political pundits to analyze the why and the politics of it all. But for employers, some of these proposals are going to be very challenging, at best, if passed.

One such bill, which appeared this week on the “GO” list (meaning its ready for considering by both houses) is House Bill 6850, titled “An Act on Pay Equity and Fairness”.  Of course, you won’t find those words in the bill itself which is odd.  There is nothing about pay equity in the bill; indeed, it is much much broader than that.

It stands in contrast to, say, the Lilly Ledbetter Fair Pay Act, which tried to tackle gender discrimination in pay directly.

This bill would make it illegal for employers to do three things. If passed, no employer (no matter how big or small) could:

  • Prohibit an employee from disclosing, inquiring about or discussing the amount of his or her wages or the wages of another employee;
  • Require an employee to sign a waiver or other document that purports to deny the employee his or her right to disclose, inquire 1about or discuss the amount of his or her wages or the wages of  another employee; or
  • Discharge, discipline, discriminate against, retaliate against or otherwise penalize any employee who discloses, inquires about or discusses the amount of his or her wages or the wages of another employee.

You might be wondering: Isn’t this first bill duplicative of federal law? And the answer is yes, and then it goes beyond it.  Federal labor law (the National Labor Relations Act) already protects two or more employees discussing improving their pay as a “protected concerted activity”.  It’s been on the books for nearly 80 years. So, as noted in an NPR article:

Under a nearly 80-year-old federal labor law, employees already can talk about their salaries at work, and employers are generally prohibited from imposing “pay secrecy” policies, whether or not they do business with the federal government.

This provision goes beyond that by making it improper for an employer to prohibit an employee from even disclosing another employee’s pay.

Continue Reading “Pay Secrecy” Bill Goes Above and Beyond Other Proposals