In an important 5-4 decision, the U.S. Supreme Court this morning held, for the first time, that class or collective action waivers, particularly in wage/hour cases, and contained in arbitration agreements between employers and employees are valid and enforceable.

Because wage and hour class and collective actions are quite costly for employers to defend against, this decision should cause employers in Connecticut (and nationwide) to re-evaluate their employment relationships with employees and consider enacting wide-ranging arbitration agreements that include class-action and collective action waivers.

The decision in Epic Systems Corp. v. Lewis (download here) was just released at 10 a.m. this morning, so I’ll have more in an upcoming post after I’ve had time to digest it, but here’s the summary from the Supreme Court itself:

In each of these cases, an employer and employee entered into a contract providing for individualized arbitration proceedings to resolve employment disputes between the parties. Each employee nonetheless sought to litigate Fair Labor Standards Act and related state law claims through class or collective actions in federal court. Although the Federal Arbitration Act generally requires courts to enforce arbitration agreements as written, the employees argued that its “saving clause” removes this obligation if an arbitration agreement violates some other federal law and that, by requiring individualized proceedings, the agreements here violated the National Labor Relations Act. The employers countered that the Arbitration Act protects agreements requiring arbitration from judicial interference and that neither the saving clause nor the NLRA demands a different conclusion.

Until recently, courts as well as the National Labor Relations Board’s general counsel agreed that such arbitration agreements are enforceable. In 2012, however, the Board ruled that the NLRA effectively nullifies the Arbitration Act in cases like these, and since then other courts have either agreed with or deferred to the Board’s position.

Held: Congress has instructed in the Arbitration Act that arbitration agreements providing for individualized proceedings must be enforced, and neither the Arbitration Act’s saving clause nor the NLRA suggests otherwise.

In doing so, the court relies on two main arguments. First, the Federal Arbitration Act compels this and notes that the Concepcion decision from a few years back foretold this (which I previously previewed in a prior post).  Second, the National Labor Relations Act doesn’t compel a different result.

Justice Gorsuch writes the majority opinion here and concludes: “The policy may be debatable but the law is clear: Congress
has instructed that arbitration agreements like those before us must be enforced as written. ” He criticizes the dissent for its language suggesting a retreat from modern day labor laws:

In the dissent’s view, today’s decision ushers us back to the  Lochner era when this Court regularly overrode legislative policy judgments. The dissent even suggests we have resurrected the long-dead “yellow dog” contract. … But like most apocalyptic warnings, this one proves a false alarm. … Our decision does nothing to override Congress’s policy judgments.

Justice Ginsburg writes the dissent and concludes:

If these untoward consequences stemmed from legislative choices, I would be obliged to accede to them. But the edict that employees with wage and hours claims may seek relief only one-by-one does not come from Congress. It is the result of take-it-or-leave-it labor contracts harking back to the type called “yellow dog,” and of the readiness of this Court to enforce those unbargained-for agreements. The FAA demands no such suppression of the right of workers to take concerted action for their “mutual aid or protection.”

It’s an “Epic” day at the Supreme Court.   Will this have the same effect for state law claims? How should employers implement these changes? When? For all employees?

Lots of questions but today, at least, the Supreme Court answered one of the biggest employment law questions out there.

Today is the last day of the General Assembly session and there are only so many hours to debate and pass bills.

And so, in a year when so many labor & employment law bills were up for consideration, it’s come down to a finish line where just one or two might pass.

The Pay Equity bill I highlighted earlier this week is on to the Governor’s desk, where he has indicated he will sign it.

But the bill making broad changes to the harassment and discrimination laws in the state now appears to be on life support. Perhaps even “mostly dead”.

You will recall from my post earlier this week that the bill passed the Senate with an overwhelming majority with language that seemed to have broad support.

According to a report in CT News Junkie, a deal has yet to be reached in the House and there may be too many issues with it to come to a deal today.

At issue has been the language eliminating the statute of limitations for some sex crimes.  It’s possible that a fix that revises the training requirements could perhaps see it’s way out of the mess but that is seeming increasingly unlikely according to news reports.

There are other bills still floating out there: Paid FMLA, changes to minimum wage, etc. None of them though seems to have enough steam at this stage to get over the finish line.

So stay tuned.  There’s a budget bill that is still up for grabs and the last day always has a way of surprising.

I’ll have a full legislative recap once the dust settles.

Over the weekend, the General Assembly approved a bill prohibiting employers, including the state and its political subdivisions, from asking, or directing a third-party to ask, about a prospective employee’s wage and salary history.

I have previously discussed the measure here.  There were a few versions floating around and it was House Bill 5386 that carried the day (as amended).

The prohibition does not apply in two situations:

  • if the prospective employee voluntarily discloses his or her wage and salary history, or;
  • to any actions taken by an employer, employment agency, or its employees or agents under a federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes.

While salary may not be inquired, the bill DOES allow an employer to ask about the other elements of a prospective employee’s compensation structure (e.g., stock options), but the employer may not ask about their value.

The bill has a two year statute of limitations. Employers can be found liable for compensatory damages, attorney’s fees and costs, punitive damages, and any legal and equitable relief the court deems just and proper.  This bill amends Conn. Gen. Stat. Sec. 31-40z

As amended, the effective date of the bill is now January 1, 2019.

The final bill is different from a prior bill because it eliminates provisions that generally would have (1) allowed employers to ask about the value of a prospective employee’s stocks or equity, (2) allowed employers to seek a court order to disallow compensatory or punitive damages, and (3) required certain employers to count an employee’s time spent on protected family and medical leave towards the employee’s seniority.

For employers, upon signature from the governor, this bill will become law.  As such, employers should notify all of their hiring personnel of the new restrictions that are likely to go in place effective January 1, 2019. I’ll have more updates after the legislative session winds down this week.

Like most of America, I spent a few hours this weekend seeing the new Avengers movie.

(Don’t worry – no spoilers here in this post.)

But it’s amazing how much the Marvel Universe has permeated our pop culture the last few years.

So, it is with tongue firmly in cheek, when I use this post to talk about a presentation I’m doing tomorrow with my colleagues that plays off one such segment of these movies.

Entitled, “Guardian of Your Own Galaxy: Making Informed Decisions on Hiring (Legally) and Sharing Information (When Appropriate)”, we’re going to talk a lot about how the hiring decisions of Tony Stark (i.e. Iron Man), Pepper Potts and how Stark Enterprises is run.

Ok, one spoiler alert: No Tony Stark.

Instead, we’re going to talk all things related to the hiring process: Background checks, interview questions, school-related employment history checks, registry checks, credit checks, ban the box, etc.

We’re also going to talk about personnel files and how FOIA requests should be addressed in the context of information about personnel.

All of this is part of my firm’s Labor & Employment Spring Seminar: 2018 Public Sector Legal Update tomorrow.

Star-Lord and Drax will not be there but we hope to see you there.

With the final few working days of the General Assembly session, we’re starting to see the outlines on bills that are pretenders vs. contenders.

Yesterday, the House passed a contender on the subject of pay equity in a bi-partisan vote.  Unless the Senate decides not to bring up the matter (as it decided last year), employers should start preparing for its likely overall passage and implementation later this year.

Four other states (including Massachusetts) have a bill of this type on the books.

So what does House Bill 5386 say exactly?

Well, less than it originally said. At the vote yesterday, the House passed “Amendment A” that eliminated some of the more controversial provisions of House Bill 5386.

Ultimately, the bill would expand the prohibitions on pay secrecy now found in Conn. Gen. Stat. 31-40z, and prohibit an employer from:

Inquiring or directing a third party to inquire about a prospective employee’s wage and salary history unless a prospective employee has voluntarily disclosed such information, except that this subdivision shall not apply to any actions taken by an employer, employment agency or employee or agent thereof pursuant to any federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes. Nothing in this section shall prohibit an employer from inquiring about other elements of a prospective employee’s compensation structure, as long as such employer does not inquire about the value of the elements of such compensation structure.

So, while there is a general prohibition about asking applicants about their salary history, it does not apply (1) if the prospective employee voluntarily discloses his or her wage and salary history or (2) to any actions taken by an employer, employment agency, or its employees or agents under a federal or state law that specifically authorizes the disclosure or verification of salary history for employment purposes.

The bill also allows an employer to ask about compensation structure, but the employer may not ask about the value of the compensation structure’s elements, except for the value of stocks or equity.

Ultimately, the compromise that was reached was applauded by business groups like the CBIA:

Approval today of legislation addressing gender-based pay inequity is the result of discussions and compromise between multiple parties, including the business community, Democratic and Republican legislative leadership, and the governor’s office, and we thank them for all their commitment to forge a consensus.

If passed by the Senate and signed into law, the bill would take effect January 1, 2019.

You’ve agonized over firing an employee.  You hired her over a year ago and it just isn’t working out.  The employee is kind, conscientious and punctual, but just doesn’t have the skills needed for the particular position.

But you’ve made up your mind. You’re firing her at a meeting this afternoon.

In that meeting, the employee stops you part way to say that she too has been thinking the job hasn’t been a good fit and asks if she can resign instead.

Can you still accept the employee’s resignation?

It may seem obvious, but I’ve had more than a few discussions with employers who are caught offguard with such a request.  (In some other circumstances, the employer may ask if they can allow the employee to resign in lieu of termination. Gets to the same point.)

The answer is yes, you can allow the employee to resign. Even if you originally were firing them.

There’s no law that requires employers to stick with a decision that they are having second thoughts. You can withdraw a termination, you can change the termination to a resignation. It’s really up to you and the employee.

But here’s a related question. Can the employee still collect unemployment benefits if they “resign”?

Again, the answer is yes.  Mostly.

As the Department of Labor notes, the “general  rule  is  that  a  person who  voluntarily  leaves  suitable  work without good cause attributable to the employer is not eligible for benefits.”

But an employer who indicates that it is going to fire an employee and “allows” the employee to resign, is probably establishing the “good cause to be attributable to the employer” because it relates to the wages, hours or working conditions of the job.

There are exceptions, of course, but employers who contest unemployment of an employee that they “allowed” to resign in lieu of termination, should really be thinking long and hard about such a decision.

And, as another blog post reminds, “forcing” an employee to resign isn’t going to fly in many instances either.

Firing an employee isn’t easy. It shouldn’t be. But doing it the right way isn’t that hard either.

Three years ago, I floated the idea that perhaps an agency could come up with a modest “amnesty” program that would give employers a chance to get into compliance with FLSA laws, without facing the draconian consequences such an admission might entail.

Now, late yesterday, the United States Department of Labor announced its own pilot program doing exactly this. 

It’s being called the “PAID” program (Payroll Audit Independent Determination), and is designed to expedite “resolution of inadvertent overtime and minimum wage violations under the FLSA.”

According to a press release:

Employees will receive 100 percent of the back wages paid, without having to pay any litigation expenses, attorneys’ fees, or other costs that may be applicable to private actions.

The PAID program facilitates resolution of potential violations, without litigation, and ensures employees promptly receive the wages they are owed.  Under this program, the Wage and Hour Division will oversee resolution of the potential violations by assessing the amount of wages due and supervising their payment to employees.

The Division will not impose penalties or liquidated damages to finalize a settlement for employers who choose to participate in the PAID program and proactively work with the Division to fix and resolve their potential compensation errors.

But there will be limits.  Employers who are in litigation or currently under investigation are excluded, for example.  Moreover, it is a one-time use; employers can’t keep coming back under it.  And it will require employers to take other steps as well.

The pilot program is being run nationwide for approximately six months, after which the Department will evaluate the pilot program and consider future options.

Employers and their counsel are going to need to do a crash course to learn about its availability.  Some FAQ are available on the DOL website but there’s still more that needs to be filled in.

It’s clear, for example, that this won’t necessarily prevent a private lawsuit from flowing or from employees who might reject this and seek out their own counsel.

And for employers in Connecticut, a word of extreme caution:  There will still be the issue of STATE law violations that aren’t addressed by this program.

Indeed, when I floated this idea with a CT Department of Labor official years ago, he noted that legislation would have to be written because the CTDOL didn’t have the ability to create such a program.

I will continue to monitor this as well as my firm but if you have any interest in FLSA issues, you’ll want to contact your employment counsel to stay up to date on this very important development.

 

 

Ten years ago today, I wrote about the then-Tenth Anniversary of one of the horrible events that made a lasting impact on Connecticut employers.

I recounted the Connecticut Lottery shootings that happened a decade earlier.

Today, marks 20 years. (The CT Mirror has another perspective here.)

The New York Times report of that event is still chilling in its matter of factness:

Angered about a salary dispute and his failure to win a promotion, a Connecticut Lottery accountant reported promptly to his job this morning, hung up his coat and then methodically stabbed and gunned down four of his bosses, one of whom he chased through a parking lot, before turning the gun on himself.

Since that time, we’ve had other workplace shootings in Connecticut including one even deadlier (Hartford Distributors) and, of course, the massacre in Sandy Hook.

I’m reminded of a post I did early on that was titled: Are there really any lessons to be learned from evil? In it, I suggested the answer was “perhaps” — if only because employers need to keep reviewing their workplace violence policies and keep figuring out ways to spot trouble before it arises.

Just in 2014 alone, there were over 400 workplace homicides nationwide reported to OSHA.

Indeed, it seems the rare case where workplace violence just pops up out of nowhere.

OSHA does have some resources on the subject — but many of them are starting to be dated. 

One of the more useful items was a set of guidelines issued in 2015 targeting healthcare and social service workers.

It calls on employers to develop workplace violence prevention programs from five building blocks:

  1. Management commitment and employee participation;
  2. Worksite analysis;
  3. Hazard prevention and control;
  4. Safety and health training, and
  5. Recordkeeping and program evaluation.

There are far more details in the report than a blog post could recap but for employers looking to reduce the risk of a workplace shooting at their facility, getting started on your own program is as good a place to start as any.

As we remember the victims of the Connecticut Lottery shooting, may we honor their memories to keep bringing change and safety to our workplaces.

Earlier this week, as I peeked up from my bed covers, I heard the lovely, comforting sound I heard when I was a kid.

“Come on Down!”

“The Price is Right” was starting.

Sure, Bob Barker is no longer the host, but I didn’t care.

At that moment, when my stomach was churning and the room was moving a bit, all I was hoping for was a round of Plinko. (I did, however, miss the ultimate Plinko win a few weeks back.)

Well that, and maybe a spin of the wheel where someone wins a $1000.  (And I missed this record-setting set of spins too.)

Netflix? My head hurts.

Bingeing on a show? Too much thinking.

But at 11 a.m. — like chicken soup — The Price is Right was there for me.

Is it the classic show for working folk to watch when they’re sick? Who knows.

With an iPhone by your side and the e-mails piling up, it’s hard to just rest and let your body recover.

In fact, I would argue that it’s harder in this 24/7 work environment to just tune out. But one of the myriad of bugs going around this winter laid me up for a few days.

Sure, I could’ve read up about paid time off, or debate whether flu shots should be required.

But where’s the fun in that?

Employment laws are great — except when you’re the person you is the subject of them. Thankfully, my firm (and our clients) are understanding. Better to stay home and not get others sick, than to come in.

We know not all employers are like that. However, this winter, it seems to have shifted a bit — at least informally.  The messages have been getting out — don’t come into work sick.

Spring is coming. And work resumes.

But The Price is Right is, at least for me, a reminder that taking care of yourself is eternal.

 

Do you remember your first day at work?

I’m not just talking about a new job.

I mean your first day EVER at a workplace.

For my oldest daughter, today is that day.

She starts as an intern at a local manufacturer of “Highly Complex Machined Parts and Precision Cams for Aerospace, Medical and Commercial Applications” to help her focus on aerospace engineering.

This internship program started a few years ago from our town’s high school and gives students a chance to see the workplace from the inside, all under the supervision of an internship program.

When she came home earlier this week from an “interview” (which I think was more of a guided tour, truth be told), the excitement from her was palpable.

“The machines are so….cool!”

When asked to explain, she said, well, it was just “cool”.  She had a huge smile and couldn’t wait for today to come.   She loves engineering (we’re starting on college applications this fall!) and the chance to have her work at a place where engineering is at its core is pretty, well,  “cool”.

Of course, like any good father (who is also an employment lawyer), I talked to her about some workplace notions — she needed to be on time, to be helpful, and to work hard.

And I told her that she had a right to be treated fairly, to be free of harassment (not that I had any notions that is going to happen here), and that the internship program was intended as a learning tool (and thus ask questions).

Of course, I could’ve pointed her to prior blog posts on internships here, here and here but that would just be asking for the classic teenage eye roll.

I’m wise enough to know that someday she’ll have a tough day at a job.

But I hope she remembers the excitement of Day One.

Because it’s really “cool”.