EEOC publishes proposed rule for Pregnant Workers Fairness Act

This week, the EEOC published a Notice of Proposed Rule Making (NPRM) for the Pregnant Workers Fairness Act (PWFA). The PWFA went into effect on June 27, 2023. In a nutshell:

Not official use.

The PWFA requires covered employers to provide reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an undue hardship.

 Employers may find the following resources helpful:

• Press Release: EEOC Issues Proposed Rule to Implement the Pregnant Workers Fairness Act;
• What You Should Know About the Pregnant Workers Fairness Act; and
• The actual NPRM.

Comments are due on or before October 23, 2023, and the Final Rule will follow sometime after that. 

NLRB swings the pendulum back on employee handbooks

Yesterday, the National Labor Relations Board (NLRB) adopted a new standard for assessing the lawfulness of work rules (press release | decision in Stericycle, Inc.). If you're stuck in the past (ya know, like two days ago), here is an overview of the overruled categorical Boeing standard (maybe bookmark it in case a Republican gets elected president). 

So, what is the "new" standard, which actually "builds on" the "old-old" (pre-Boeing) standard?

Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer proves its defense, then the work rule will be found lawful to maintain.

If you're a fan of Con Law, this sounds a lot like "strict scrutiny." Employers may wish to review their employee handbooks with the new standard in mind to avoid NLRA challenges. 
 

SCOTUS clarifies "undue hardship" standard for religious accommodation under Title VII

Awe man, how embarrassing. It turns out that some of use (by which I mean basically all of us) have been getting it wrong for 46 years! You see, Title VII requires employers to reasonably accommodate an employee's sincerely held religious beliefs unless doing so would impose an "undue hardship."

Well, apparently we've been misinterpreting a 1977 Supreme Court decision (Trans World Airlines, Inc. v. Hardison) to interpret "undue hardship" as meaning "more than a de minimis cost." In fairness to us, the Supreme Court decision in question literally says, “To require TWA to bear more than a de minimis cost in order to give Hardison Saturdays off is an undue hardship.” Or, if you like ellipses to really drive it home, "more than a de minimis cost . . . . is an undue hardship."

Justice Alito

No, no, no, says SCOTUS. Yesterday, the Supreme Court issued its opinion in Groff v. DeJoy. Now, despite my sarcasm, it has always been odd that "undue hardship," meant "more than de minimis" for religious accommodations, but something far more substantial under the ADA's disability  accommodation provisions. And, as the Court noted yesterday, "de minimis" means something far less than the plain language understanding of the phrase "undue hardship."

But, hey, the past is the past. Let's cut to the chase, what does "undue hardship" really mean in the context of a religious accommodation defense? 

• "We think it is enough to say that an employer must show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business."
• "[C]ourts must apply the test in a manner that takes into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, “size and operating cost of [an] employer.”

The fundamentals remain unchanged: An employer must reasonably accommodate an employee's sincerely held religious beliefs unless it imposes an undue hardship. Now, however, the bar has been raised for what counts as an "undue hardship."

NLRB decision shifts independent contractor analysis

Yesterday. the NLRB issued its decision in The Atlanta Opera, Inc. You know it's important when they also issue a press release. 

It is probably easiest to explain what the new test is not: "The Board expressly rejected the holding of the SuperShuttle Board that entrepreneurial opportunity for gain or loss should be the 'animating principle' of the independent-contractor test."

So, what is the test? I know what you're thinking... "Phil, pleeease tell me that it's a nonexhaustive list of ten factors!?" You know it! The decision marks a return to "longstanding principles" and "independent-contractor analysis will be guided by a list of common-law factors." Turning to the Restatement (Second) of Agency, the Board looked at:

[T]he following matters of fact, among others, are considered: 

(a) the extent of control which, by the agreement, the master may exercise over the details of the work; 

(b) whether or not the one employed is engaged in a distinct occupation or business; 

(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; 

(d) the skill required in the particular occupation; 

(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; 

(f) the length of time for which the person is employed; 

(g) the method of payment, whether by the time or by the job; 

(h) whether or not the work is a part of the regular business of the employer; 

(i) whether or not the parties believe they are creating the relation of master and servant; and 

(j) whether the principal is or is not in business.

Notably, the new decision not only overrules prior NLRB precedent, but also seems to depart from D.C. Circuit precedent (FedEx Home Delivery v. NLRB, 563 F.3d 492 (D.C. Cir. 2009) (FedEx I)). The Board purports to rely on Supreme Court and decisions and other D.C. Circuit decisions. Time will tell whether The Atlanta Opera standard will survive. 

NLRB GC weighs in on nondisparagement and confidentiality clause decision

NLRB General Counsel, Jennifer Abruzzo, issued a memorandum addressing the NLRB's decision in McLaren Macomb (memo | press release | McLaren decision). You can read my analysis of that decision here: NLRB takes aim at confidentiality and nondisparagement clauses in separation agreements.

The whole memo is worth a read, but some highlights of the GC's view:

• Even unsigned agreements violate the NLRA if they were proffered and include unlawful nondisparagement and confidentiality provisions;
• The decision applies retroactively to separation agreements entered into even before the NLRB's decision in McLaren;
• In a rare piece of good news, agreements with unlawful clauses are likely still enforceable as to the remaining lawful provisions;
• The memo is less than clear as to whether a "savings clause" would work. It seems like it could work, but the GC would like the NLRB to adopt a model. 

On that last point, what might a model savings clause look like? Well, the memo states that a savings clause should:

make it clear to employees that they had rights to engage in: 

(1) organizing a union to negotiate with their employer concerning their wages, hours, and other terms and conditions of employment; 

(2) forming, joining, or assisting a union, such as by sharing employee contact information; 

Not official use.

(3) talking about or soliciting for a union during non-work time, such as before or after work or during break times, or distributing union literature during non-work time, in nonwork areas, such as parking lots or break rooms; 

(4) discussing wages and other working conditions with co-workers or a union; 

(5) taking action with one or more co-workers to improve working conditions by, among other means, raising work-related complaints directly with the employer or with a government agency, or seeking help from a union; 

(6) striking and picketing, depending on its purpose and means; 

(7) taking photographs or other recordings in the workplace, together with co-workers, to document or improve working conditions, except where an overriding employer interest is present; 

(8) wearing union hats, buttons, t-shirts, and pins in the workplace, except under special circumstances; and 

(9) choosing not to engage in any of these activities.

That's, uhhh, a lot. Keep an eye out for that model language, but I think it's going to be something like the above. 

NLRB takes aim at confidentiality and nondisparagement clauses in separation agreements

On February 21, 2023, the NLRB issued its opinion in McLaren Macomb and corresponding press release, Board Rules that Employers May Not Offer Severance Agreements Requiring Employees to Broadly Waive Labor Law Rights.

The case involved the following provisions in separation agreements offered to 11 permanently furloughed bargaining unit employees:

6. Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse, or as necessary to professional advisors for the purposes of obtaining legal counsel or tax advice, or unless legally compelled to do so by a court or administrative agency of competent jurisdiction. 

7. Non-Disclosure. At all times hereafter, the Employee promises and agrees not to disclose in- formation, knowledge or materials of a confidential, privileged, or proprietary nature of which the Employee has or had knowledge of, or involvement with, by reason of the Employee’s employment. At all times hereafter, the Employee agrees not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agents and representatives.

Uhhhh, you mean totally normal, standard boilerplate, confidentiality and nondisclosure/

Not official use.

nondisparagement provisions that you'd find it just about any separation agreement? Yes, those. 

Welp, the NLRB takes issue with these clauses, concluding:

[T]he nondisparagement and confidentiality provisions interfere with, restrain, or coerce employees’ exercise of Section 7 rights. Because the agreement conditioned the receipt of severance benefits on the employees’ acceptance of those unlawful provi- sions, we find that the Respondent’s proffer of the agreement to employees violated Section 8(a)(1) of the Act.

In layman's terms, the employees were offered benefits in exchange for giving up their rights to discuss the terms and conditions of employment with their former colleagues and to publicly protest the conditions. The NLRB has concluded that even offering such a deal is a violation of the NLRA. 

Should you abandon such boilerplate clauses? Not so fast! First, not all workers are covered by the NLRA (state employees, supervisors, independent contractors, etc.). Second, the courts might have something to say about this ruling. Third, you can draft the clauses to carve out certain protected activity (which substantially reduces the effectiveness of the clauses, but may save an employer from the NLRB's wrath).  

SCOTUS: Day Rate does not meet salary basis requirement

I'm not sure how this is possible, but I tend to agree with the majority and both dissents in the latest Supreme Court decision. Yesterday, SCOTUS issued its opinion in Helix Energy Solutions Group, Inc. v. Hewitt. 

The case dealt with a highly compensated employee who earned over $200,000 annually and performed executive duties. The employer treated him as an exempt employee and did not pay him overtime. The employee, however, was paid a daily rate of $963 (which changed at one point to $1,341). 

The "critical question," according to the majority, was whether this daily rate met the "salary basis test" - to be an exempt employee under the white collar (and corresponding highly compensated employee) exemptions, an employee must be paid on a salary basis. Per the FLSA regs:

Justice Kagan

An employee will be considered to be paid on a ‘salary basis’ . . . if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. Subject to [certain exceptions], an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.”

29 CFR §541.602(a). 

Ultimately, the majority (opinion by Justice Kagan) reached the rather uncontroversial conclusion that paying someone a set rate "per day" does not meet the requirement that they be paid a weekly salary. 

Justice Gorsuch, however, had a rather compelling dissent noting that SCOTUS granted certiorari to decide a totally different question (and the briefs barely touched on the majority's "critical question") - he would have dismissed the case as improvidently granted. 

Justices Kavanaugh and Alito likewise make a compelling argument based on the actual facts of this particular employee. Here, the employee was paid more (at least $963) than the weekly salary requirement  (then $455) for any day he worked. Thus, any week in which he worked he would necessarily be guaranteed an amount in excess of the salary requirement for that week. Indeed, "this case would be different if Hewitt had been guaranteed, say, only $250 per day that he worked."