Hunton Employment & Labor Perspectives

On April 29, 2024, in compliance with President Biden’s October 2023 Executive Order addressing artificial intelligence, the Department of Labor’s Wage & Hour Division (WHD) issued guidance regarding the potential risks posed by employers using AI tools to monitor or augment worker productivity to violate the Fair Labor Standards Act (FLSA).

On February 8, 2024, the U.S. Supreme Court issued a unanimous opinion holding that a whistleblower with a retaliation claim under the Sarbanes-Oxley Act of 2002 (“SOX”) does not need to establish that their employer acted with “retaliatory intent” to succeed on their claim. An employee must merely show that their protected whistleblowing activity was a “contributing factor” in an adverse employment action against them by their employer. Murray v. UBS Securities, LLC, 144 S.Ct. 445 (2024). An employer’s retaliatory intent or lack of animosity is “irrelevant.”  Id. at 446.

On February 15, 2024, California lawmakers introduced the bill AB 2930.  AB 2930 seeks to regulate use of artificial intelligence (“AI”) in various industries to combat “algorithmic discrimination.”  The proposed bill defines “algorithmic discrimination” as a “condition in which an automated decision tool contributes to unjustified differential treatment or impacts disfavoring people” based on various protected characteristics including actual or perceived race, color, ethnicity, sex, national origin, disability, and veteran status. 

The National Labor Relations Act (“Act”) empowers the National Labor Relations Board (“Board”) to “take such affirmative action including reinstatement of employees with or without backpay, as will effectuate the policies of this Act.” 29 U.S.C. § 160(c). For much of the Board’s history, that has generally resulted in Board Orders that involve some combination of notice posting, backpay, and reinstatement.

On October 30, 2023, President Biden issued a wide-ranging Executive Order to address the development of artificial intelligence (“AI”) in the U.S.  Entitled the Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, the Order seeks to address both the “myriad benefits” as well as what it calls the “substantial risks” that AI poses to the country. It caps off a busy year for the Executive Branch in the AI space. In February the Equal Employment Opportunity Commission published its Strategic Enforcement Plan highlighting AI ...

On October 27, 2023, the National Labor Relations Board (“NLRB”) published its anticipated Final Rule modifying the standard for determining joint-employer status under the National Labor Relations Act (“NLRA”).  See Standard for Determining Joint Employer Status, 88 Fed. Reg. 73946 (October 27, 2023) (to be codified at 29 C.F.R. pt. 103).  The Final Rule overrules the NLRB’s 2020 joint-employer rule and broadly expands the definition of joint-employer.   

On June 30, 2023, the U.S. Supreme Court in 303 Creative, LLC v. Elenis held that the First Amendment prohibits Colorado from compelling a website designer to engage in expressive conduct that conflicts with her beliefs.

On June 29, 2023, the U.S. Supreme Court in Groff v. DeJoy clarified the “undue hardship” standard under which it can deny a religious accommodation under Title VII of the Civil Rights Act of 1964.  In a unanimous opinion authored by Justice Alito, the Court rejected a “de minimis cost” test, and held that an employer denying a religious accommodation must show that the burden of granting an accommodation “would result in substantial increased costs in relation to the conduct of its particular business.”

National Labor Relations Board (“NLRB”) General Counsel Jennifer Abruzzo recently issued a memorandum announcing her broad opposition to non-compete agreements.  In GC Memo 23-08, Abruzzo set forth her belief that, “the proffer, maintenance, and enforcement of [non-compete] agreements violate Section 8(a)(1) of the Act.”  According to Abruzzo, overbroad non-compete agreements chill employees’ abilities to exercise their Section 7 rights because the provisions interfere with employees' ability to:

• Concertedly threaten to resign to secure better working ...

Last week, the Ninth Circuit issued an opinion in Sharp v. S&S Activewear, L.L.C. where it confirmed that music in the workplace can form the basis of a Title VII sex harassment claim even when it is (1) not directed at any particular individual employee, and (2) offends both female and male employees.

The Fourth Circuit issued an opinion in Messer et al. v. Bristol Compressors International, LLC et. al. that should serve as a cautionary tale to employers planning to use severance agreements when implementing layoffs.  There, the court considered three questions.  First, whether Bristol Compressors validly eliminated its severance plan before terminating Plaintiffs’ employment.  Second, whether certain Plaintiffs who signed a Stay Bonus Letter Agreement (“SBLA”) waived their claims against Bristol Compressors.  And third, whether four of the Plaintiffs received adequate notice under the WARN Act before their employment was terminated.

Background

On January 10, 2023, the Equal Employment Opportunity Commission (“EEOC”) published a draft of its Strategic Enforcement Plan (“SEP”) in the Federal Register, which outlines the enforcement goals for the Commission for the next four years. While the Agency aims to target a number of new areas – such as underserved workers and pregnancy fairness in the workplace – it is notable that it listed as priority number one the elimination of barriers in recruitment and hiring caused or exacerbated by employers’ use of artificial intelligence. 

The U.S. Supreme Court agreed to hear a case that will impact how employers across the country respond to their employees’ requests for religious accommodation. Depending on how the Court rules, it may become much more difficult for companies to comply with or deny religious accommodations under Title VII of the Civil Rights Act of 1964.

On December 7, 2022, New York City Council Member Tiffany Cabán along with three other co-sponsors introduced a proposed bill that would prohibit all employers from terminating employees without (1) “just cause” or (2) a bona fide economic reason.  The bill would amend current law which protects “fast food” employees from being terminated without just cause.

It is no secret that legislators and regulatory agencies have taken note of companies’ increasing reliance on artificial intelligence (“AI”).  In the employment context, vendors market AI as an efficiency tool that can streamline HR processes and guard against human bias and discrimination.  But as we have previously blogged, undisciplined use of AI may accelerate or introduce discrimination into the workplace.

On September 7, 2022, the NLRB released a Notice of Proposed Rulemaking (“NPRM”) and request for public comment regarding its latest iteration of the joint employer rule.  The NPRM proposes to rescind and replace the current final rule, entitled “Joint Employer Status Under the National Labor Relations Act,” which took effect on April 27, 2020.

The EEOC recently issued long awaited guidance on how an employer’s use of software, algorithms, and artificial intelligence will be treated by the Commission under the Americans with Disabilities Act (ADA). In issuing this guidance, the Commission focused on employers administering software that uses algorithmic decision-making or artificial intelligence in making employment decisions before and during employment. The Commission outlined three general areas in which the use of such technology may violate the ADA: (1) an employer not providing a reasonable ...

A small but growing number of employees are asking for cryptocurrency as a form of compensation.  Whether a substitute for wages or as part of an incentive package, offering cryptocurrency as compensation has become a way for some companies to differentiate themselves from others.  In a competitive labor market, this desire to provide innovative forms of compensation is understandable.  But any company thinking about cryptocurrency needs to be aware of the risks involved, including regulatory uncertainties and market volatility.

On December 6, 2021, New York City Mayor Bill de Blasio surprised employers by announcing on MSNBC’s “Morning Joe” that, starting December 27, NYC will mandate vaccines for all private-sector workers.  The mandate is expected to affect around 184,000 employers.

Last week, the EEOC issued new guidance on how to apply anti-discrimination laws to an applicant or employee’s request for a religious exemption from an employer’s COVID-19 vaccination requirement.

On October 20, 2021, the California Department of Fair Employment and Housing (“DFEH”) issued a press release to announce its plans to use unspecified technology to conduct online searches for statements in job advertisements that violate the Fair Chance Act (“FCA”). According to the DFEH, during a one-day review, it was able to locate over 500 job advertisements that violated the FCA because they stated that the employer would not consider job applicants with criminal records.

Earlier this month, the Equal Employment Opportunity Commission (EEOC) held a webinar on artificial intelligence (AI) in the workplace.  Commissioner Keith Sonderling explained that the EEOC is monitoring employers’ use of such technology in the workplace to ensure compliance with anti-discrimination laws. The agency recognizes the potential for AI to mitigate unlawful human bias, but is wary of rapid, undisciplined implementation that may perpetuate or accelerate such bias.  Sonderling remarked that the EEOC may use Commissioner charges—agency-initiated investigations unconnected to an employee’s charge of discrimination—to ensure employers’ are not using AI in an unlawful manner, particularly under the rubric of disparate impact claims.

The legal landscape for defining “employers,” “employees,” and “independent contractors” can be quite dynamic, as this past year has illustrated. In January 2021, the Department of Labor issued an employer-friendly independent contractor rule that would have departed from the agency’s typical balancing test, but it formally withdrew this rule in early May with the change in administration. The DOL’s independent contractor rule is intended to provide guidance to employers when determining whether a worker is an employee or an independent contractor. For employers, this is an important distinction because the FLSA’s overtime and minimum wage protections apply only to employees, not independent contractors. Because courts and employers sometimes struggle to find this line using the economic realities test and its iterations, the Trump-era independent contractor rule aimed to provide a clearer definition of “employee,” as opposed to “contractor.” The DOL has not yet proposed a new independent contractor test, but employers should be mindful that the Biden administration may potentially announce a new rule on this topic.

Uber Technologies, Inc. has been sued in a class action lawsuit alleging the company’s use of criminal background checks discriminates against Black and Latinx drivers. The complaint, filed in the U.S. District Court for the Southern District of New York on April 8, challenges Uber’s “unlawful use of criminal history to discriminate against its drivers in New York City as well as its brazen noncompliance with human rights and fair credit laws.”

Named plaintiff Job Golightly, a Black resident of Bronx County, New York, drove for Uber from 2014 through August 2020. Golightly claims that his criminal history consists of a single 2013 misdemeanor speeding violation from Virginia. According to the lawsuit, until 2017 Uber had relied solely on background checks conducted by the New York City Taxi and Limousine Commission (TLC). Plaintiffs allege that in mid-2017, in response to negative news coverage on assaults committed by drivers, Uber began using the credit reporting agency Checkr to conduct additional background checks on current and prospective drivers. As a result, in August 2020 Uber allegedly conducted a background check on Golightly that revealed his 2013 speeding violation. One day later, Golightly claims that Uber deactivated him from its platform, preventing him from driving for the company.

Ten U.S. senators are asking the U.S. Equal Employment Opportunity Commission to hone in on employers’ use of artificial intelligence (“AI”), machine-learning, and other hiring technologies that may result in discrimination.

The group of senators—Michael Bennet (D-CO), Cory Booker (D-NJ), Sherrod Brown (D-OH), Elizabeth Warren (D-MA), Catherine Cortez Masto (D-NV), Chris Coons (D-DE), Ron Wyden (D-OR), Tina Smith (D-MN), Chris Van Hollen (D-MD), and Jeff Merkley (D-OR)—jointly penned a December 8, 2020 letter to Chair Janet Dhillon. The letter urges that EEOC is responsible for combatting discrimination resulting from the use of hiring and other employment technologies. The senators voice concern about a number of hiring technologies, including:

• “[T]ools used in the employee selection process to manage and screen candidates after they apply for a job”;
• “[N]ew modes of assessment, such as gamified assessments or video interviews that use machine-learning models to evaluate candidates”;
• “[G]eneral intelligence or personality tests”; and
• “[M]odern applicant tracking systems.”

On November 17, 2020 the Equal Employment Opportunity Commission (“EEOC”) released proposed updates to its Compliance Manual on Religious Discrimination (“Manual”). The draft revisions are available for public input until December 17, 2020, after which the EEOC will consider the public’s input, make any changes, and publish the finalized Manual.

The Equal Employment Opportunity Commission (EEOC) regularly releases guidance and advice to employers to aid in compliance with applicable workplace discrimination laws. For example, over the course of the COVID-19 pandemic, the EEOC has frequently issued and updated guidance on how employers can strike the difficult balance between workplace safety and compliance with the Americans with Disabilities Act.

While most EEOC enforcement actions are related to individual complaints of discrimination and/or retaliation, so-called “pattern or practice” matters are those in which the EEOC attempts to show that an employer has systematically engaged in discriminatory activities. The Equal Employment Opportunity states on its website, “Systemic discrimination involves a pattern or practice, policy, or class case where the alleged discrimination has a broad impact on an industry, profession, company or geographic area.” To combat systemic discrimination, section 707(a) of Title VII of the Civil Rights Act of 1964 authorizes the EEOC to sue employers engaged in a pattern or practice of discrimination.

On April 23, 2020, the EEOC updated its Technical Assistance Questions and Answers, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” which Hunton previously posted about here, to address questions that many employers are struggling with related to employee COVID-19 testing.  The EEOC’s new guidance confirms that employers are authorized to administer COVID-19 tests before allowing employees to enter the workplace, and that doing so does not violate the Americans with Disabilities Act (ADA).

On April 17, 2020 the EEOC updated its’ Technical Assistance Questions and Answers to provide employers with additional guidance interpreting the ADA, Rehabilitation Act, and other EEO Laws in the midst of the COVID-19 pandemic.  The EEOC first reminds employers that while these laws continue to apply, employers should still adhere to the ever-changing guidelines and suggestions made by the CDC or state/local health authorities.  With that in mind, the new guidance addresses several topics, summarized below.

As state unemployment agencies are inundated with new claims, the US DOL recently provided instructions to states for implementing the Pandemic Emergency Unemployment Compensation Program (PEUC) of the CARES Act in its April 10, 2020 guidance.  PEUC allows states to enter into agreements with the Secretary of Labor to pay up to 13 weeks of unemployment benefits to eligible individuals, through December 31, 2020.  We highlight the important takeaways below.

On April 10, the Department of Labor published corrections to its regulation on the Families First Coronavirus Response Act and fixed an internal inconsistency regarding concurrent use of employer-provided paid time off and paid expanded family medical leave under the Act.

We previously covered the initial DOL rule on Families First here.  The Families First Act provides up to 12 weeks of paid leave for employees of small to mid-sized businesses for certain coronavirus-related reasons.

EEOC guidance on COVID-19 continues to evolve as the medical community learns more about the virus.  On April 9, 2020, the EEOC expanded the list of symptoms about which employers may ask when screening employees entering the workplace, without running afoul of the Americans with Disabilities Act (ADA).  Previously, employers were permitted to ask individuals if they were experiencing fever, chills, cough, sore throat, or shortness of breath. In the agency’s most recent update to its “Technical Assistance Questions and Answers about COVID-19,” it acknowledged that the medical profession now recognizes that the virus may present with the additional symptoms of a sudden loss of smell or taste, as well as gastrointestinal problems, such as nausea, diarrhea or vomiting.  Inquiries about these symptoms are now permitted, as well.

The Department of Labor released posters that employers with fewer than 500 employees must use to meet the notice posting requirements of the Families First Coronavirus Response Act.

The DOL issued two posters, one for federal employers, available here and one for all other covered employers, available here.  The DOL also provided a questions and answers page regarding the notice posting requirement here.

The Department of Labor (“DOL”) released guidance Tuesday regarding the implementation of the Families First Coronavirus Response Act, including details on how employers can determine whether they are covered by the Act.

500 Employee Threshold

One of the most common questions among employers regarding the Families First Act, which Congress passed last week to provide up to 12 weeks of paid leave for coronavirus-related reasons, involved how to count employees towards the 500 employee threshold for coverage under the law.  If an employer has 500 or more employees, then it is not covered by the law.  The DOL provided three key pieces of guidance to help employers determine whether they are covered.

In a press conference today, Governor Cuomo announced his plan to mandate 100% of non-essential workforce in New York stay home.  What does this mean for New York businesses?

The United States Senate today passed the Families First Coronavirus Response Act and sent it to President Trump’s desk.  The President is expected to sign the bill into law this week.

The bill, which provides for paid sick leave and expanded family leave for certain employees for coronavirus-related reasons, passed the Senate without substantive changes.  The House initially passed the bill on Friday night, but made technical corrections to it late Monday.

For full details on how the legislation may affect employers, see our previous coverage of the bill here and here.

COVID-19 has disrupted the global economy and employers may soon face the need to reduce expenses associated with exempt employees. Employers can place exempt employees on furlough, or, in some cases, reduce salaries and hours, without jeopardizing the FLSA exemption, but exceptions may need to be made for certain employees on work-authorized visas.

The House amended its Coronavirus Response Bill late on March 16, 2020 and sent it on to the Senate.

Paid Sick Leave Changes

 The sick leave provisions of the bill remained largely intact, and would entitle employees of employers with fewer than 500 employees to take up to 80 hours of paid sick leave for coronavirus-related reasons, including required quarantining, caring for family members with the illness, or for emergency school closings.  To review our initial summary of the bill, which includes discussion of portions of the bill that were unaffected by the technical amendments, click here.  The amendments include a $511 daily cap for leave benefits for employees with their own personal coronavirus-related medical conditions, and a $200 cap for employees caring for others with such symptoms or for school closings.

Importantly, the sick leave amendments also allow the Secretary of Labor to grant exemptions to employers where the secretary determines that imposition of the paid sick leave requirements would “jeopardize the viability of the business as a going concern.”  It also allows healthcare and emergency response employers to apply for exemptions from the Secretary of Labor so that the law would not apply to their employees.

In the early morning hours of March 14, 2020, the U.S. House of Representatives passed a bill to address concerns related to the spread of COVID-19 (the “Bill”).  The Senate is expected to consider the Bill shortly, and according to media reports, the Bill has the Trump Administration’s support.  Our summary below highlights provisions of the Bill related to leave.  This summary provides information regarding how the bill stands currently, but language changes or substantive amendments may still occur.  We will continue to monitor the Bill as it progresses through the legislative process and update this post accordingly.

UPDATE:  Click here to read our update on revisions made to the Bill.

Note at the outset that, as the Bill stands now, the leave provisions pertain only to employers with fewer than 500 employees.

After a nearly six-year legal battle, the Fifth Circuit has struck down the U.S. Equal Employment Opportunity Commission’s 2012 Enforcement Guidance on the consideration of criminal history in employment decisions.  On August 6, a three-judge panel held that the Guidance was a substantive rule the EEOC had no authority to issue and that the EEOC can no longer enforce the Guidance or treat it as binding in any respect.

If your background check forms include too much information about rights under state law, or even grammatical errors, you might be in trouble according to the Ninth Circuit.  In Gilberg v. California Check Cashing Stores, the appeals court recently ruled against an employer for using background check disclosure forms that violate both the federal Fair Credit Reporting Act (FCRA), and California’s Investigative Consumer Reporting Agencies Act (ICRAA).

On November 15, the EEOC issued its 2017 annual Performance and Accountability Report, providing details and statistics regarding the Commission’s performance and goals during the period of October 1, 2016 to September 30, 2017.

A New York Appellate decision issued last week—finding that firing an employee for being sexually attractive states a claim for gender discrimination—exemplifies the broad interpretation of discrimination laws in recent years.

Plaintiff Dilek Edwards worked as a yoga instructor and massage therapist for a Manhattan-based chiropractor and wellness center owned and operated by a married couple.  Edwards maintains that she was regularly praised for her performance and maintained a “purely professional” relationship with the husband-owner.

On June 30, 2017, Missouri Governor Eric Greitens signed a bill into law, Senate Bill 43 (SB 43), that makes substantial changes to Missouri’s employment discrimination laws. The Bill, which goes into effect on August 28, amends the Missouri Human Rights Act (MHRA) and creates the “Whistle Blower Protection Act.”

Numerous changes have been made to the MHRA, so the Bill is worth a read.  A few key changes that are likely of particular interest to employers relate to who may be liable for violations, the level of proof required to establish a violation, and the amount of damages that may be awarded.

The New York City Commission on Human Rights recently amended its rules to establish certain definitions and procedures applying the Fair Chance Act.  The Act makes it unlawful to discriminate against job applicants and employees on the basis of criminal history, and is particularly important for employers for two reasons: (1) it applies not only to criminal background checks performed by third-party vendors but also to checks performed entirely by the company, and (2) out-of-state non-employers may be held liable for aiding and abetting violations of the Act.  For more on this latter point, read our prior post on the New York Court of Appeals opinion in Griffin v. Sirva, Inc.

The issue of whether workers are properly classified as independent contractors rather than employees is a common dispute in the gig economy, particularly in newer, technology-based industries, such as ride-sharing.

That issue just became a much simpler one in Florida: On May 9, 2017, Florida’s governor signed into law a bill that, among other things, establishes that drivers for companies such as Lyft and Uber—called “transportation network companies” or “TNCs” under the law—are independent contractors, not employees, as long as the company satisfies four conditions:

At the request of the U. S. Court of Appeals for the Second Circuit, the New York Court of Appeals recently answered several questions regarding liability under the New York Human Rights Law Section 296(15)—which prohibits denying employment on the basis of criminal convictions when doing so violates New York Correction Law Article 23-A—and Section 296(6)—which prohibits aiding and abetting such discrimination.

Government agencies like the SEC are challenging what have long been standard provisions in separation agreements. Hunton & Williams LLP partners Kevin White and Emily Burkhardt Vicente discuss those challenges and provide tips for companies on revising their standard agreements to mitigate against them.

View the 5-minute video here. 

Government agencies like the SEC are challenging what have long been standard provisions in separation agreements. Hunton & Williams LLP partners Kevin White and Emily Burkhardt Vicente discuss those challenges and provide tips for companies on revising their standard agreements to mitigate against them.

View the 5-minute video here. 

Hunton & Williams recently published an entry on its Retail Law Resource Blog regarding what employers can expect from Victoria Lipnic, the new acting chair of the Equal Employment Opportunity Commission (“EEOC”) and an EEOC Commissioner since 2010.  Since that publication, Lipnic has made public comments as to what she envisions from the EEOC under her leadership.  Several key topics from those comments are summarized below:

Across the country, worker misclassification issues continue to be a significant risk for employers.  One hot button issue is whether workers in newer, technology-based industries, such as ride-sharing, are properly classified as independent contractors rather than employees.  Last week, an appellate court in Florida considered whether Uber drivers are properly classified as independent contractors or employees for purposes of benefits under Florida’s unemployment insurance statute.

The Trump Administration will leave in place an executive order signed by President Barack Obama, which bans sexual orientation and gender identity discrimination by federal contractors.  President Obama signed the order in 2014.  By doing so, he amended and expanded previous executive orders signed by Presidents Nixon and Clinton, which ban discrimination by federal contractors on the basis race, color, religion, sex, national origin, handicap, status as a parent, and age.

The Fifth Circuit held recently that the State of Texas had standing to sue the Equal Employment Opportunity Commission (“EEOC”) over the Commission’s “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII” (the “Guidance”) issued in April 2012, which warned employers that blanket policies against hiring felons could disproportionately exclude minorities and thus be deemed discriminatory. Texas originally sued the EEOC in late 2013 seeking an injunction against enforcement of the Guidance and a declaratory judgment that state agencies be allowed to maintain their policies, as instituted under state law, barring categories of convicted felons from state employment. In its complaint, the State also claimed that the EEOC’s Guidance improperly preempted state law. The lower court granted the EEOC’s motion to dismiss on grounds that Texas lacked standing to sue the EEOC because the Commission cannot bring an enforcement action against the state for failing to comply with the Guidance. The lower court also held that the EEOC Guidance did not constitute a “final agency action” under the Administrative Procedure Act (“APA”), and thus the Guidance was not subject to judicial review.

Earlier this month, the San Francisco Board of Supervisors approved six weeks of fully-paid leave for new parents, the first city-wide legislation of its kind in the nation. Parents are entitled to the benefit if they have been employed by the employer for at least 180 days, work at least eight hours per week within the city or county of San Francisco, spend at least 40% of their hours per week working within the city or county of San Francisco, and are eligible to receive paid family leave from the State of California under the California Paid Family Leave law for the purpose of bonding with a new child. The new law requires that employers make up the difference between the benefit provided by the California Paid Family Leave law and 100% of the employee’s normal gross weekly wage.