The Difference
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LB4HR – December 2016

Posted on December 1, 2016

Welcome to Legal Briefs for HR, an update on employment issues sent to over 6000 individual HR professionals, in-house counsel and business owners plus HR and legal professional organizations (who have been given permission to republish content via their newsletters and websites), to help them stay in the know about employment issues.  Anyone is welcome to join the email group . . . just let me know via reply email you’d like to be added to the list and you’re in!  Back issues are posted at www.munckwilson.com under Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.” 

In closing out this year, I’d like to thank you for what you do each day in support of your work places and the work family who inhabit them.  HR pros, lawyers, office managers, business owners and all the rest who make the choice each day to go to work, provide a product or service and contribute to a collective effort are All Stars, in my book.  Here’s wishing you and yours a happy, healthy and hearty holiday season . . . and here’s a collection of naughty and nice events for you to savor, over a mug of cocoa:                                                                                                                            

1. What’s Next? – We know the proposed hike in the minimum salary needed to support most of the FLSA white collar exemptions was put on ice just short of the Dec. 1 effective date, but what comes next is less clear.  The U.S. Dep’t of Labor moved for and was granted expedited briefing of its appeal of the preliminary injunction, but oral argument will be scheduled for a date after January 31.  The Texas AFL-CIO wants to intervene in the lawsuit, siding with the DOL.  The companion case, Plano Chamber of Commerce v. Perez, has filed a motion for expedited summary judgment.  But the calendar suggests there is not enough time for any of these measures to take place before president-elect Trump is sworn in on January 20 which means there is a good chance DOL will withdraw its appeal. The Secretary of Labor nominee, Andrew Puzder, is a fast-food CEO and not a fan of big increases in either the federal minimum wage or the minimum salary. On minimum wage, he has described large state and city-driven jumps in the minimum wage rate as “job killers” but concedes that regional rates make sense since, for example, the cost of living in Alabama is not the same as it is in San Francisco.  Mr. Puzder is prolific commenter on labor and employment issues, so search his name to get a flavor of his views.  The courts will hash out what happens to the pending litigation,  but it may settle if the new DOL can gin up a more palatable approach to the FLSA minimum salary such as smaller increases over a stretch of time.

2. No Class – A NLRB judge in Texas nuked a restaurant chain’s arbitration provision barring employee participation in class or collective actions, along with employee handbook policies which [1] prohibited conduct that is disruptive, nonproductive and unprofessional; [2] too broadly prohibited on-premises solicitation activity; [3] prohibited employee departures from work during working hours (since that would nix a strike); and [4] ban employee discussion of company business with the media.  However, on Dec. 8 the 5th Circuit reversed a different NLRB order which told Citigroup to nix its class-action waivers in their arb agreements, relying upon two prior 5th Circuit decisions (D.R. Horton and Murphy Oil) that are on appeal to the U.S. Supreme Court.  

3. Top of the Class – I’d like to shine a light on a LB4HR subscriber and Area HR Manager here in Dallas, Mike Winters, who recently accepted a Bridges from School to Work 2016 Employer of the Year award on behalf of Lowe’s. “Bridges” was established in 1989 by the Marriott Foundation for People with Disabilities to engage employers, schools, community resources, youth and their families to help businesses meet their staffing needs while offering young people with disabilities the opportunity to learn, grow and succeed through employment. Lowe’s was honored for hiring nine Bridges participants in an 18-month period in the Dallas area and providing solid pay, benefits, training and support needed to move from part-time, entry-level to more challenging work including supervisory and management.  “Bridges” has offices in eight metro areas.  My hat’s off to Mike Winters and Lowe’s!  If you would like info on the program, check out http://www.bridgestowork.org/.

4. Safety Dance – OSHA’s final rule implementing changes to its Recording and Reporting Occupational Injuries and Illness regulation (29 CFR sec. 1904.35) was published in May 2016 with an effective date of August 10. That effective date was pushed to November 1 and then to December 1 by the agency.  A motion for preliminary injunction failed on Nov. 28, so the Final Rule took effect Dec. 1, but could still be enjoined when the arguments are given a full hearing. At issue is a clamp-down on employee drug testing policies and incentives which are perceived to dissuade employees from reporting their workplace injuries.  An OSHA Deputy Assistant Secretary issued an October 19 memo which appeared to try to back up the bus on the issue of whether employers’ post-injury drug testing was reasonable as opposed to retaliatory. Since OSHA is part of DOL, what happens here could also be impacted by the changing of the guard discussed above.

5. CRA 101 – A new federal administration always seems to trigger speculation of whether the Congressional Review Act (CRA) will be used to overturn agency rules created under the prior administration.  How does it work?  If Congress signs off on a joint resolution (JR) to stop a proposed (or undo an existing) rule that was submitted to Congress within the 60-day period before Congress adjourned AND the president signs off on the JR, then the rule goes away.  Since this will only happen when the White House and both houses of Congress share party affiliation, it does not happen often. In fact, it’s only happened once since the CRA became law in 1996.  Remember the OSHA ergonomic rule from November 2000 (that went away in March 2001)? However, the needed alignment of interests in D.C. is teed up after the November elections, so we may witness a roasting of the rules like none other. 

 6. Re-Orienting – In LB4HR #7, I summarized the Hively v. Ivy Tech Community College case in which the 7th Circuit begrudgingly opined that Title VII provides no redress for discrimination based on sexual orientation.  LB4HR #9 shared that the judges had agreed to rehear the case, en banc.  The hearing occurred on Nov. 30 and the judges’ questions and comments during oral argument appear to favor Hively, with most of the fireworks being shot at arguments advanced by Ivy Tech’s counsel.  Add to the mix that two federal district courts have recently decided that Title VII sex discrimination does encompass claims of both sexual orientation and gender identity.  Roberts v. Clark County School District (D. Nev. Oct. 2016)(transgender case); EEOC v. Scott Medical Health Center P.C. (W.D. Pa. Nov. 2016)(sexual orientation case) Opinions remain divided, so this issue is probably headed to the Supreme Court for a final answer.

7. Gentle Reminder – Start using the new Form I-9 no later than January 22, 2017.  The new form is posted at https://www.uscis.gov/i-9.

8. (Forum) Shoppers Alert – If you have employees in CA and they sign employment agreements with a choice of law or venue provision indicating a state other than CA, heads’ up!  Effective January 1, 2017 that’s a no-no.  Here is why:  https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201520160AB465. The prohibition will apply to employment agreements entered into as a condition of hire and will not apply to agreements required as a condition of participation in benefit plans, employment agreements with an “opt out” window or to employment agreements negotiated by the employee’s legal counsel.

9. Guiding Light – The EEOC issued another guidance parsing employee’s ADA rights, this time addressing mental health conditions.  Employers will want to focus on Q2 of the 8 FAQs, which lists the four occasions when an employer is allowed to ask medical questions of a job applicant or employee.  Any person in your organization who participates in job interviews should be schooled on these principles.  The press release at https://www1.eeoc.gov//eeoc/newsroom/release/12-12-16a.cfm?renderforprint=1 includes an embedded link to the guidance entitled “Depression, PTSD & Other Mental Health Conditions in the Workplace:  Your Legal Rights.”

10. A Different Kind of Party Warehouse – The U.S. Dep’t of Transportation’s Federal Motor Carrier Safety Association (DOT FMCSA) is creating an on-line clearinghouse to capture and keep positive drug and alcohol test info on commercial drivers.  A press release with embedded links to the Final Rule and to a deeper explanation of how the clearinghouse will work can be found at https://www.fmcsa.dot.gov/newsroom/fmcsa-establishes-national-drug-and-alcohol-testing-clearinghouse-commercial-truck-and-bus. The new rule takes effect January 4, 2017 but employers subject to FMCSA regs have until January 6, 2020 to comply.  FMCSA-regulated employers, MROs, SAPs, consortia/3rd party administrators and similar service agents will be required to report DOT drug and alcohol violations by current and prospective employees to the clearinghouse.  Violations include verified positive, adulterated or substituted test result; confirmed alcohol concentration of 0.04+; refusal to be tested; employer’s actual knowledge of certain types of drug/alcohol use and more.  Employers will be required to check the clearinghouse before allowing an employee to drive a CMV on public roads and repeat the query annually.

11. Calendar That – When you purchase that fresh 2017 calendar, flip to June and mark June 12 and 13 as the 24th Annual University of Texas School of Law Labor and Employment Law Conference, to be held at the AT&T Conference Center on the UT campus.  Yours truly is chairing this year’s conference and can attest that the planning committee has assembled a meaty slate of topics and speakers to educate, bemuse and amuse you.  Stay tuned for more details and hope to see YOU in Austin!

12. Stated Differently – Here are some hot topics for you multi-state employers:

  1. Arizona – Effective January 1, 2017, the state minimum wage will rise to $10/hour.  The next increases are to $10.50/hour on January 1, 2018, to $11/hour on January 1, 2019 and to $12/hour on January 1, 2020.
  2. California – There are two expansions to the Fair Pay Act.  One addresses race and ethnicity inequity at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160SB1063 and the other addresses use of prior pay in setting future pay at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1676.  As to the latter, employer questions about prior pay remain OK, but don’t plan on that data point being your sole reason for offering less money.
  3. California – CA Labor Code section 432.7, which lists limits on employment-related queries, has been expanded effective January 1, 2017 to include juvenile criminal information .  The info is off-limits in the employment context, regardless of whether it is sought from the job applicant or is provided by a third party or resource.  For full text of the bill see https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1843
  4. California (Los Angeles) – Effective January 1, 2017, employers of 10+ employees (includes the owners, managers & supervisors) may not inquire into a job applicant’s criminal  record until after a conditional offer of employment is made and the offer must conditioned only on the result of criminal history check.  Fines for violations will not issue until July 1, 2017.  Full text of the ordinance is posted at http://clkrep.lacity.org/onlinedocs/2014/14-0746_misc_11-28-2016.pdf.
  5. California (San Jose) – Minimum wage will rise to $10.50/hour effective Jan. 1, 2017, to $12/hour on July 1, 2017 and $15.00/hour by 2019.  The Opportunity to Work ordinance, which takes effect March 13, 2017, will require employers to offer more hours of work to current & qualified part-time workers “before hiring  additional Employees or subcontractors, including hiring through the use of temporary services or staffing agencies . . . .”  Employers with 35 or fewer employees are exempt from this ordinance.
  6. Illinois – Jimmy Johns Enterprises LLC struck a deal with the IL Attorney General to address overbroad application of noncompete covenants to its employees.  IL law, like many, requires noncompetes to be narrowly tailored to specific circumstances and based on protection of a legitimate business interest.  Since most of the employees subject to the agreement had no access to trade secret or confidential info, there was no protectable interest.  The company will notify current and former employees that their noncompetes are not enforceable and will tell its franchisees to rescind any noncompetes that were based on the corporate version.  The company will also pay $100K for a public awareness campaign, remove the noncompetes from new hire packets going forward and agree to comply with the IL law.  This dispute prompted the IL legislature to enact the Illinois Freedom to Work Act which, effective January 2017, which prohibits application of noncompetes to workers earning less than $13/hour.
  7. Oregon (Portland) – The City Council of Portland has approved a surtax on publicly traded companies whose CEOs earn 100 times their median worker’s pay or more.  The surtax will be a 10% business license tax liability surtax if the ratio is 100:1 or more and jumps to a 25% tax if the ratio is 250:1 or more, on top of the existing 2.2% business tax.  The tax is not limited to employers who are HQ’d in Portland and is estimated to apply to around 550 companies.  The tax will be based on new CEO compensation disclosures required by the SEC, but companies are given a lot of leeway in calculating the CEO to employee ratio so the numbers may not be an accurate reflection.  If the incoming administration tinkers with the Dodd-Frank Act, the SEC reporting mandate may go away, leaving Portland with no data on which to base the surtax.

13. For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State . . . looking forward to seeing my Aggie friends at the Texas Bowl in Houston on Dec. 28!), follow me on Twitter.  I’m at @amross.