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Tag: Noncompetition Agreements

Top 10 Post COVID-19/Coronavirus Employment Law Issues

Published by Brett Holubeck on June 17, 2020
Image of a sign that says that "the world is temporarily closed" to demonstrate that most activities are shutdown until the post COVID-19 recovery begins.
Photo by Edwin Hooper on Unsplash

Businesses are slowly returning to normal from the COVID-19/Coronavirus pandemic. However, there are still a number of issues that are employers are facing. Of course, the most important issue for many employers is making sure that their business survives. Unfortunately, many businesses are also facing another issue: lawsuits. The potential liability for companies is continuing to accelerate. Here are the most likely lawsuits, administrative proceedings, and labor/employment law issues that employers will face in a post COVID-19 workplace.

1. WARN Act Lawsuits

As I stated in a previous article, the WARN Act generally requires employers with 100 or more employees to provide 60 days’ notice before the closure of a business or a mass layoff.

With the numerous layoffs that have occurred, accelerating bankruptcies, lockdowns continuing in many states, and businesses operating at reduced capacity or shutting down there will be a number of people that will not come back to work. Many people suspect that 40% of the layoffs will be permanent. 40 million people have lost their jobs. Unfortunately, the sheer number of layoffs means that there will be some layoffs that were not properly done. WARN Act lawsuits will accelerate.  

2. Worker Safety Lawsuits and OSHA Complaints

As I stated in my post about essential workers, employees want to be safe. Many are filing OSHA complaints and lawsuits because they do not feel safe.

a. OSHA Complaints Are Increasing

OSHA has issued over 5,000 complaints related to COVID-19. There will be a number of OSHA complaints that will continue after businesses begin to reopen. Many employees are concerned about their safety especially those that are vulnerable or work in high risk jobs. Companies should expect that there will continue to be a number of OSHA complaints due to companies not following all the safety protocols that OSHA and the CDC have put out. As a reminder here are the protocols from OSHA and the CDC have been released:

There are two important steps to employee safety and COVID-19. First companies need to follow the guidance to the extent that it applies at their workplace. Second, companies need to communicate with their employees about the safety steps. Employees need to know the procedures that they need to follow.  Employees also need to have channels that they can use to report workplace problems and safety concerns. Finally, employees that know that their company is taking steps so that they feel safe in the workplace are less likely to pursue lawsuits or complaints against a company.

b. Lawsuits About Personal Protective Equipment (PPE)

A number of employers have been sued for not providing enough personal protective equipment for employees including one against Smithfield  and another against a hospital.

The Smithfield plaintiffs’ suit was dismissed because they did not follow the proper channels for pursuing their claim (they should have gone through OSHA). While similar lawsuits are unlikely to succeed, companies should expect employees to continue to use all legal channels when they are not satisfied with the protective measures that their employer has taken.

3. Worker’s Compensation Lawsuits

Employers should expect a surge of worker’s compensation claims related to the coronavirus. It may be difficult for many employees to demonstrate that they got sick at work, but some states have made this easier through executive orders or other legislation that have basically enacted a rebuttable presumption that essential workers are presumed to have been infected while on the job. Bloomberg has a nice chart of which states have enacted such laws. For workers that are not essential or are not in one of the 8 states that have enacted such a law or regulation, it will be difficult to show that the employee actually got COVID-19 at work. This fact should reduce the number of successful claims in those states.

There continues to be conversations in Congress about protecting companies from liability, but nothing has passed yet.

4. NLRB Charges and Union Organizing

There are a number of signs that union organizing will increase as a result of COVID-19. Here are exhibits one, two, and three. Even nonprofit workers are turning to union organizing.

Union organizing and NLRB charges will continue to increase in the wake of COVID-19. Many unions have used the pandemic to strengthen their relationship with employees and seek to organize more employees. Many have been successful because employers have failed to take appropriate steps to protect employees or have not communicated with  employees about the steps that they have taken.

As a reminder, in some prior posts I wrote about what employers can and cannot do in a union organizing campaign and how to respond to an NLRB charge.

a. Employee Walkout Issues

There will continue to be employee walkouts because of the coronavirus. Stories about employees walking out because of concerns about safety are everywhere. As COVID-19 continues to cause problems and potentially a second wave of the Coronavirus comes, employers may see more walkout issues. This may especially be the case for workers that are more concerned about the virus because they are more susceptible to suffering from a severe reaction from it. Employers should remember that walkouts are likely protected under both the OSH Act (which may protect workers that refuse to perform a job if they are in imminent danger) and the National Labor Relations Act (which protects concerted protected activities by employees).

5. Employee Recall Lawsuits

As businesses reopen, there are a number of issues where employers could get into trouble. I wrote about employee recall issues recently. Specifically, I listed issues regarding the WARN Act, age discrimination, collective bargaining issues, and issues with the FFCRA once an employee is brought back. As businesses recall employees all of these issues, especially those related to discrimination, will become major concerns.

6. Refusal to Perform An Illegal Act

A Texas Supreme Court case called Sabine Pilot Service, Inc. v. Hauck states that an employer cannot fire an employee when they refuse to perform an illegal act.

In a recently filed case, an employee was required to come into the office to work. She claims that she was able to work from home and that the business was not an essential business and thus her employer was requiring to do an illegal act by requiring her to come to work. She claims that she was fired for refusing to come to work, which would have violated the stay at home order.

As businesses continue to reopen and restrictions continue to be placed on businesses, it may be the case that there will be additional lawsuits like this one.

7. FFCRA and Expanded Family and Medical Leave Lawsuits

When employees are finally able to resume working and meet with attorneys, it is likely that some of them will have potential claims against their employer for failing to follow the Families First Coronavirus Response Act (FFCRA). There may have been a number of people that have not been able to work because of childcare issues, their own illnesses, and being denied leave for other reasons (some of which may be legitimate). At least one employer has already been sued. Many companies will face similar lawsuits.  

8. Disability Discrimination Lawsuits

As I mentioned previously, employers have obligations to accommodate individuals based on a disability. As companies open up, it is likely that many people that may be more vulnerable to COVID-19 will seek accommodations from their employer. The most common accommodations include remote work or additional leave. The way that employers respond to these employee requests for a reasonable accomodation will be critical to avoiding potential lawsuits.

9. Employee Layoff Issues and Lawsuits

The sheer number of employees that have lost their jobs (more than 40 million) leaves a lot of room for lawsuits that typically follow a layoff. Excluding lawsuits related to WARN, here are some of the common issues that follow a layoff.

a. COBRA Notice Lawsuits

I wrote about COBRA notice problems in a recent post. There will be more COBRA lawsuits due to the difficulty that many companies have in providing appropriate notice to employees of their loss in health insurance coverage.

b. Non-Compete and Trade Secret Litigation

As people leave companies because of layoffs many will try to start their own companies or will be hired by competitors of their former employer. Some of these employees will inadvertently or purposefully try to take clients or trade secrets of their former employer. Companies should be careful when laying off workers that they eliminate employee access to various accounts and that no information is taken. Companies would do well to consider a severance agreement for employees with any confidential information to make sure that they return all confidential information and understand their responsibilities.

c. Failure to Pay Employees Properly

At least one company has been sued for failing to pay employees after the business was forced to shutdown due to COVID-19 and the employer lacked the funds to pay employees for their most recent work. It is likely that a number of wage and hour lawsuits will occur after the pandemic ends. Many employees were working remotely at time when many companies did not have many remote employees and may not have had the framework in place to track working time for these employees. The failure to correctly track time worked is likely to be a big concern for all companies that had hourly employees that were working remotely.

10. Remote Work Increases

Remote work is going to increase after the pandemic ends. Approximately 66% of workers were working remotely at the height of the coronavirus. This is compared to the approximately 5 million workers (or 3.6% of the workforce) that were working at home at least half the time in 2018. One survey from Gartner of CFO’s found that 74% of the surveyed CFO’s believed that 5% of their workforce would be permanently converted from office to remote employees after the pandemic ends. With as easy as it is to work from anywhere for office employees one should expect this trend to continue to accelerate.

Conclusion

Life after the pandemic will be very different than it was before. People are much more concerned about safety.  Travel is down and will stay that way for the foreseeable future. Some countries are discussing reducing globalization and diversifying their supply chains. In other words, the pandemic and the governments’ reaction to it are a major black swan event.

Companies need to be aware of the above issues in the immediate future as they navigate a post COVID-19 pandemic workplace. The only way for companies to grow after COVID-19 is for companies to adapt and seek ways to improve. Companies need to plan for the above problems and work with employees to succeed. With a recession already underway and uncertainty about how long it will take the economy to recover, planning is critical to the future success of companies.

The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.

The information provided is my own and does not reflect the opinion of my firm or anyone else.                                                                                                                                                                                   

2020 Democratic Candidates on Labor, Employment, and the Workplace

Published by Brett Holubeck on June 26, 2019
Picture of a ballot box to demonstrate the voting for the 2020 Democratic Candidates and highlight how the election may change the workplace
Photo by Element5 Digital on Unsplash

There are a lot of Democratic Candidates for president. As of today, there are 25 active Democratic candidates vying for the party’s nomination. Many of these candidates have not released specific proposals about their beliefs on employment and labor law issues. However, before tonight’s debate I wanted to outline some of the most interesting proposals of the candidates on labor and employment law and the workplace.

$15 Minimum Wage

Joe Biden announced his support in his first campaign speech. Bernie Sanders has drafted legislation to increase the minimum wage to $15 an hour. As reported by Vox, only 4 candidates (Andrew Yang, Bill de Blasio, Jay Inslee, and Wayne Messam) have not taken a position on the minimum wage. Sen. Michael Bennet favors a 12 dollar minimum wage. Klobuchar, Hickenlooper, Warren, O’Rourke, Castro, Harris, Kirsten Gillibrand, Pete Buttigieg, Marianne Williamson, Tulsi Gabbard, Eric Swalwell, Cory Booker, Seth Moulton, Tim Ryan, Mike Gravel, John Delaney, and Steve Bullock all support a $15 minimum wage.

Increasing the minimum wage is likely to have a number of effects on labor and employment. Namely, the minimum wage increase will cause wages to rise for the lowest paid workers. This in turn may cause increased salary compression where higher paid workers do not receive the same increase in their wages that minimum wage workers receive. Many other workers that are not currently minimum wage workers, will need to have wage increases to reward their skills and ensure that they believe that they are adequately compensated. Individuals that have wages close to the minimum wage will expect an increase if they are not making that much more than the minimum wage after a minimum wage hike.

Of course, the minimum wage increase will also have a bigger impact on employers and industries that tend to be located outside of major metropolitan areas or in states where the cost of living is cheaper.  For example, in 2015 there were 8 states had a median wage that was less than $15 an hour. Increasing the minimum wage in these states would have a dramatic impact on employee salaries as more than half of workers would need wage increases just to reach the minimum wage. Again, workers with wages that are currently under $15 an hour but above the minimum wage would need wage raises beyond $15 an hour to ensure that their talents are rewarded (i.e. they are getting fairly paid and making more than $15 or the minimum wage). For example, an EMT in Alabama currently averages $14.06 an hour. They would expect a new wage that would be significantly higher than any minimum wage worker making $15 per hour.

Card Check and Union Organizing

Joe Biden, Kamala Harris, Bernie Sanders, Elizabeth Warren, and many others support a law that will enable labor unions to organize by card check. This means that the individuals only need to get a majority of the employees in a workplace to sign union authorization cards. Union authorization cards authorize a specific union to represent the employee, which goes into effect if the union wins an election or the employer voluntarily recognizes the union if a majority of employees sign union authorization. If enacted, card check would mean that there would not be any election to decide whether to form a union in a workplace. Rather, if a majority of employees signed union authorization cards, then the employer would be forced to recognize the union without an election. 

This would be a radical change in labor law and would remove, what in my opinion, is a critical piece of labor relations. Namely, that employees are able to vote on whether they would like to have a union in a way that enables their ballots to be secret and free from undue influence.

Eliminating the Gender Pay Gap through EEO-1 Data

Kamala Harris has proposed a requirement that she believes would end the gender pay gap. She is pushing to punish companies with a 1 percent fine for every 1 percent wage gap that exists in their ranks.

Companies will be required to certify that they are paying women the same as men for equal work. To the extent that pay disparities exist a company will need to show that the gap is based on merit, performance, or seniority. Companies will be required to obtain an equal pay certification to avoid paying these fines.

This would be a radical change and would require companies to devote significant resources to demonstrating that their pay practices are not discriminatory.

Sexual Orientation Discrimination

Democratic candidates generally support prohibiting sexual discrimination. This, however, is one issue that will likely be resolved when the Supreme Court decides two cases next year. Bostock v. Clayton County, Georgia and Altitude Express Inc. v. Zarda.

The Supreme Court will decide “Whether the prohibition in Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1), against employment discrimination “because of . . . sex” encompasses discrimination based on an individual’s sexual orientation.” The decision in these cases will likely determine the final proposals of any Democratic candidate on the issue.

Enacting Paid Family Leave

Kirsten Gillibrand reintroduced her legislation to create a federal paid family and medical leave program. Her plan is co-sponsored by Bernie Sanders, Cory Booker, Amy Klobuchar, Kamala Harris, and Elizabeth Warren.

The bill would essential replace unpaid FMLA leave with 12 weeks of paid family leave.

I’ve said it before (see my earlier post). Paid family leave is coming to the US. President Trump and the Democrats both agree on paid family leave but differ in how they wish to implement it. 

Eliminating No Poach Agreements

Cory Booker and Elizabeth Warren have proposed legislation that would outlaw no poach agreements within franchise agreements. No poach agreements prohibit employers from hiring the employees of another employer that is part of the agreement. In fact, 11 state Attorney Generals launched an investigation into these no-poaching clauses and seven chains that represented more than 25,000 stores nationwide have dropped these clauses. With these investigations underway, it is unlikely that the bill or any proposal from a presidential candidate will dramatically impact the law because the court cases will likely decide whether these agreements are enforceable under Antitrust law.

Banning Noncompetition Agreements

Senators Warren and Klobuchar support limiting non-competition agreements. Noncompetition agreements permit employers and employees to enter into agreements to prohibit employees from competing against an employer after they leave that employer’s employment. Both of these Senators have called on the Federal Trade Commission to use their rulemaking authority to limit noncompetition agreements.

Elizabeth Warren has sponsored legislation to ban non-competes. Yes, all non-competes. It would not affect the ability of companies to protect their trade secrets.

The legislation fails to consider some of the important factors that matter for noncompetition agreements and why they are important. Granted, not all employees need nor should they be required to sign noncompetition agreements. For example, employees at Jimmy John’s do not need noncompetition agreements. Forcing the employees that make sandwiches to sign noncompetition agreements does not help the company. It destroys employee morale and makes it harder for the company to find employees once this policy becomes known because (surprise) employees want to be treated well.

Salespeople, executives, owners of companies that sell their company but agree to stay with the company during a transition period, and many other high-level employees are individuals that should sign noncompetition agreements. It makes sense that a former owner should not be allowed to open a competing business after he or she sells their business.

We can expect that if either are elected as President that they would seek to limit or do away with noncompetition agreements.

Ending the Tipped Wage

The Raise the Wage Act would phase out the tipped wage. Bernie Sanders, Cory Booker, Klobuchar, Gillibrand, Harris, and Warren have sponsored the legislation and thus support ending the tipped wage. As I said previously in this post (quoted below), the tipped wage has been a controversial subject for many states and cities.

The recent debate in DC to eliminate the tipped wage demonstrates that many groups have a wide variety of opinions on the issue of tips. The proposal was a voter initiative that would have eliminated the tipped wage and it passed, but it was ultimately undone by a DC council vote. Many restaurant workers expressed concern that the elimination of the tipped wage would cost them money as less people would tip.

Ending Arbitration as a Condition of Employment

Cory Booker, Kirsten Gillibrand, Kamala Harris, Amy Klobuchar, Bernie Sanders, and Elizabeth Warren are all cosponsors of the Restoring Justice for Workers Act. The bill would essentially end employment agreements where arbitration is a condition of employment (it is in an initial employment agreement) and would prohibit arbitration in many other circumstances unless the employee agreed to be subject to arbitration and the arbitration agreement met certain conditions.

Elizabeth Warren, in a letter to the Department of Labor’s Solicitor of Labor, requested information about the DOL’s approach in bringing enforcement actions against companies with employees that signed arbitration agreements as a condition of employment. It is clear that she would like to end arbitration agreements as a condition of employment.

Arbitration has some advantages and disadvantages. Robin Shea, at the Employment & Labor Insider,  does a great job of outlining them. For many employers and employees, it is the best way to handle workplace disputes. Removing arbitration as a possibility for handling workplace disputes would radically change employment and labor law by requiring all disputes to be resolved through an already backlogged court system.

Conclusion

One thing is certain no matter which Democratic candidate wins the nomination there are a lot of proposed changes to labor and employment law and the workplace in general among the various proposals of the candidates. It will be incredibly interesting to see who the Democratic candidate will be, what policies they will propose, and how the election influences labor and employment law.

Disclaimer: This is not a full list of all the candidates’ political positions on the workplace nor labor and employment law, but merely some highlights of issues you will see in play. If you know of or would like to highlight other aspects of any Democratic candidate that I did not mention or left out, then please feel free to comment below.

The information provided in this blog is for educational purposes only and is not legal advice. If you need legal advice, then you should speak with a lawyer about your specific issues. Every legal issue is unique. A lawyer can help you with your situation. Reading the blog, contacting me through the site, emailing me or commenting on a post does not create an attorney-client relationship between any reader and me.

The information provided is my own and does not reflect the opinion of my firm or anyone else.

Brett Holubeck (of Houston, Texas) is the attorney responsible for this site.