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Addressing union organizing in the workplace has bedeviled employers since the adoption of the National Labor Relations Act. The National Labor Relations Board has historically permitted employers to ban employees from soliciting co-workers during working time. No solicitation policies have been narrowed and refined over the years, as demonstrated by the Board’s holding in Essex International, Inc., 211 N.L.R.B. 749 (1974). Essex distinguished between policies that prohibit solicitation during “working time” (permissible) and those that prohibit solicitation during “working hours” (invalid).

In Wynn Las Vegas, LLC, 369 NLRB No. 91 issued last week, the NLRB broadened the definition of solicitation to include urging a co-worker to vote “yes.” The Wynn Las Vegas decision reverted to the Board’s traditional interpretation and acknowledged the NLRB’s failure to obtain court approval for its narrower meaning.

Continue Reading NLRB Broadens Definition of “Solicitation,” Expanding Conduct That May Be Deemed Unprotected

Not surprisingly, summer internships look a bit different this year. Some are cancelled outright, others cut short, and many are virtual. Amidst these changes, we know employers have more than a few questions . . .

Q. If my company is cancelling its planned summer internship, do we have to provide any cash compensation?

A. Not unless there is a contract in place to do so. Nonetheless, we’ve seen a number companies offer to pay a portion of the expected wages (and a few very generous employers have sought to pay the entire amount).

Q. And, if we want to pay our intern some amount for the lost opportunity, do we have to put them on the payroll?

A. Yes. The IRS takes the position that, from a tax perspective, paying any amount, in lieu of wages to a prospective employee who is never actually employed is nonetheless wage income subject to income tax withholding, social taxes, etc. Some employers are a little stumped by how they can set somebody up on the payroll just to make this one lonesome payment. But, it is doable. It requires some administrative tasks like getting the required federal and state withholding forms and setting the person up in the employer’s payroll system. For federal purposes, the required form is the Form W-4 that an employee fills out during onboarding for a new job, which form will require the employee to provide a social security number (or other taxpayer identification number) and other information needed for the payment to be properly reported on Form W-2 and withheld upon.

Continue Reading FAQs About Summer Internships During the Pandemic

The Department of Labor (DOL) issued final regulations establishing new safe harbors for the electronic delivery of required retirement plan disclosures under ERISA. As background, retirement plan administrators must deliver required disclosures using methods that are reasonably calculated to ensure actual receipt of documents by plan participants.

Under prior guidance from 2002, the DOL created a safe harbor electronic delivery method for required disclosures. But the 2002 safe harbor is only available with respect to employees that have regular access to a computer at work as an integral part of their jobs or who otherwise affirmatively consent to the electronic disclosure. Accordingly, the 2002 safe harbor has limited utility to many employers.

While the 2002 safe harbor remains available, the new final regulations add two additional options for electronic disclosure. Specifically, the plan administrator may:

  1. Post documents to a website (referred to as the “notice-and-access” safe harbor); or
  2. Use a direct email option.
General Applicability and Initial Paper Notice

Both safe harbor methods are only available with respect to “covered individuals.”

  • In general, a “covered individual” is a person who is entitled to plan documents under ERISA, and who is assigned an electronic address for employment-related purposes or who furnishes an electronic address to the employer.
  • An employer cannot assign an employee an electronic address to be used solely for the purpose of complying with the new safe harbor. The email address must be provided in connection with a larger business purpose (e.g., an employee’s general work email would work for this purpose).
  • For terminated employees, the plan administrator would need to take reasonable measures to ensure any electronic address provided by the individual remains operational or obtain a new electronic address.

Before disclosure is made under either method, covered individuals must be given an initial paper notice of default electronic delivery that contains certain required content. It also must explain their right to receive a copy of any covered document in paper form free of charge, or to opt out of electronic delivery entirely (thus, requiring paper delivery with no charge). The initial notification must state the electronic address that will be used for the participant and include any instructions necessary to access the disclosed documents. Both safe harbor methods require that plan administrators take measures reasonably calculated to ensure the confidentiality of covered individuals’ personal information.

Health and welfare plan disclosure documents are not covered under the final regulations. That is, the safe harbors only apply to retirement plan related disclosures. Similarly, documents that are to be provided upon request (for example, plan documents) are not covered by the final regulations.

Notice and Access Method: Posting on a Website

For each disclosure posted on an internet website, an electronic notice of internet availability (NOIA) must be provided.

  • The NOIA must include a description of the document being disclosed, instructions on how to access information on the website and other required content.
  • Required disclosures must be posted on the website by the deadline required under ERISA and must remain available on the website for one year or until they are superseded by a later document, whichever is later.
  • The final regulations also require the NOIA (as well as the initial paper notice referenced above) to include a cautionary statement that describes this timeframe.

Certain disclosures can be provided in a combined annual NOIA. However, documents that are not furnished annually (e.g., quarterly benefit statements) must have their own separate NOIA .

  • The NOIA must include the web address of the posted document (or an imbedded hyperlink to it), a statement of the right to receive a paper version free of charge and a statement of the right to opt out of electronic disclosure with instructions on how to do so, along with the administrator’s phone number.
  • The NOIA cannot include anything that is not explicitly required or permitted by ERISA, but may also include a statement about whether action by the covered individual is invited or required in response to a document and how to take such action, or that no action is required and pictures, logos or similar design elements.

The website used for disclosure may be an internet website or other internet or electronic-based repository (for example, a mobile application). In addition, employers must have a system in place to alert them of any invalid or inoperable electronic addresses. If the employer is notified that an electronic address is invalid or inoperable, that participant is considered to have opted out of electronic disclosures unless the inoperable email is resolved.

Email Delivery Method

With the email delivery method, instead of sending a NOIA regarding the posting of a document on a website, plan administrators can send the disclosure document directly via email to the address provided by the covered individual.

  • Employers may send the required disclosures within the body of an email or as an attachment to the email.
  • The requirements for employers providing these notices electronically are largely the same as the requirements set forth above for posting to a website. However, there is no requirement need to provide any NOIA for email delivery. Instead, employers must include statements in the email describing the document, explaining the participant’s right to get a paper copy of the document, as well as the participant’s right to opt out of electronic delivery.
Effective Date

The final rule will become effective July 27, 2020. However, the DOL indicated that it will not take any enforcement action against a plan administrator that relies on the safe harbor before that date. The DOL explained that its non-enforcement policy is part of a broader effort to respond to the effects of COVID-19 and its desire is to reduce administrative burdens on employers.

Special thanks to the author, Christopher Guldberg.

On May 20, 2020, Chicago passed the “COVID-19 Anti-Retaliation Ordinance,” making it illegal for employers with employees in the City of Chicago to retaliate against employees who stay home: to follow public health orders related to COVID-19, to quarantine because of COVID-19 symptoms, or to care for an individual ill with COVID-19. Enacted as an amendment to Chicago’s Minimum Wage and Paid Sick Leave Ordinance, the Anti-Retaliation Ordinance prohibits employers from terminating, demoting, or taking other adverse action against employees who are unable to work for reasons related to COVID-19.

What do I need to know?

Under the Ordinance, an employer cannot terminate, demote, or take any other adverse action against an employee for obeying an order issued by Mayor Lightfoot, Governor Pritzker, or the Chicago Department of Public Health (or, in the case of subsections (2) through (4) below, a treating healthcare provider) requiring the employee to:

  1. Stay at home to minimize the transmission of COVID-19;
  2. Remain at home while experiencing COVID-19 symptoms or while being sick with COVID-19;
  3. Obey a quarantine order issued to the employee (to keep an employee who has come into contact with an infected person separate from others);
  4. Obey an isolation order issued to the employee (to separate an employee with COVID-19 from others); or
  5. Obey an order issued by the Commissioner of Health regarding the duties of hospitals and other congregate facilities.

In addition, an employer cannot take adverse action against an employee for caring for an individual subject to subsections (1) through (3) above.

The Ordinance became effective on May 20, 2020, and will expire (unless City Council intervenes) when the Commissioner of Public Health makes a written determination “that the threat to public health posed by COVID-19 has diminished to the point that [the] ordinance can safely be repealed.”

Continue Reading Chicago Employers: Allow Your Employees to Obey COVID-19 Public Health Orders, or Else

Due to the pandemic, employees in the US are working from home in unprecedented numbers. Some, particularly in tech, may be working from home through the end of the year, or even permanently! While working from home raises a myriad of issues (e.g., data privacy and security, health and safety, employee engagement, and more), this post focuses on expense reimbursements related to telecommuting. The trickiest areas are cell phones and internet given that employees are now working from home because they cannot go into the office, as opposed to perhaps at their convenience.

Reimbursement Obligations

There is no federal requirement to reimburse employees for business-related expenses. However, several states (including California, the District of Columbia, Illinois, Iowa, Massachusetts, Montana and New York) have legislation requiring reimbursement for necessary businesses expenses. For example, California Labor Code Section 2802(a) requires an employer to “indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer….” Failing to reimburse employees can lead to class or collective actions and quickly become incredibly burdensome for employers. Under California law, an employer that does not reimburse employees risks a lawsuit where the damages will include not just the unreimbursed expenses but the attorney’s fees incurred by the employee seeking reimbursement. The employee can also ask the Labor Commissioner to cite the employer or anyone acting on the employer’s behalf under Labor Code Section 2802(d). Where the practice is widespread (or just alleged to be) the claims can be brought on a class-wide basis.

Continue Reading Reimbursement Refresher: Cell Phone and Internet Expenses Related to Telecommuting in the US

Are you ready to protect employees at higher risk for severe illness from COVID-19 as you reopen? That’s a question the CDC asks in its recently-released guidance for employers considering reopening. And the EEOC recently issued three new Q&As in the “Return to Work” section of its technical assistance guidance for COVID-19, instructing employers on managing “high risk” employees in compliance with the Americans with Disabilities Act (ADA). The below Q&A provides direction for employers regarding “high risk” employees returning to the workplace and reasonable accommodations to help keep those employees safer at work.

What is my employee required to do to request a reasonable accommodation if the employee has a medical condition the CDC says could put the employee at higher risk for severe illness from COVID-19?

The employee (or the employee’s representative, such as the employee’s doctor) must let you know the employee (i) needs a work accommodation (ii) for a reason related to the medical condition. The request can be made in conversation or writing, and does not need to use the term “reasonable accommodation” or even reference the ADA. Therefore, to ensure you don’t unintentionally run afoul of the ADA by missing a request for a reasonable accommodation, we recommend you review every communication from an employee (or employee’s representative) stating that the employee has a medical condition requiring a change at work as one that may require a reasonable accommodation. It is also important to train managers to be aware of these requests and to immediately inform HR if an employee mentions needing a change at work because of a medical condition.

Continue Reading From Safer-at-Home to Safer-at-Work: the EEOC Issues Guidance to Help Reopening Employers Manage “High Risk” Employees

Recently, Southwest Airlines won a second major victory when Northern District of Illinois Judge Seeger granted its motion to dismiss claims brought under Illinois’ unique Biometric Information Privacy Act (“BIPA”). Crooms v. Southwest Airlines Co., Case No. 19-cv-2149.

Plaintiffs alleged Southwest violated BIPA by requiring them to scan their fingers when clocking in and out of work without giving them the written notice or receiving their consent as required by BIPA. When initially employed, three of the plaintiffs were represented by the Transportation Workers Union of America, AFL-CIO Local 555 (“TWU”) and were covered by a collective bargaining agreement (“CBA”). The CBAs at issue provided Southwest had the “right to manage and direct the work force” and included a mandatory four-step grievance and arbitration procedure for resolution of disputes. Plaintiffs were later promoted to Ramp Supervisors, a non-union position and agreed to comply with Southwest’s Alternative Dispute Resolution (“ADR”) Program.  The fourth named plaintiff was never covered by a CBA but was always a party to the ADR Program.

Continue Reading “This Case Does Not Belong In Federal Court” — Southwest Secures Dismissal of Illinois Biometric Lawsuit

California residents have some relief from shelter in place orders that took effect mid-March, with the state and several counties relaxing certain restrictions in early May. Despite those welcome changes, employers have much to track as they reopen businesses throughout California. A patchwork of state and local public health orders and guidelines confronts employers as they emerge from the original highly restrictive shelter in place orders.

At the state level, Governor Gavin Newsom has outlined a gradual four-phase framework to allow “non-essential” businesses and public spaces to reopen. We entered Phase 2 on May 8, 2020, meaning additional retailers (curbside), including bookstores, clothing stores, music stores, toy stores, florists, and others, as well as manufacturers and suppliers for those retailers, can theoretically resume limited operations. Recently, Governor Newsom also has invited feedback from business owners, workers, and customers as the state prepares to reopen different sectors of the economy.

On May 18, 2020, Governor Newsom released somewhat loosened criteria for counties that want to allow businesses to reopen more quickly than the state. For example, counties are no longer required to have zero COVID-19 deaths in the previous two weeks to move forward in stage 2. Instead, counties should continue to track hospitalization numbers and positivity rates (the percentage of COVID-19 tests coming back positive). Governor Newsom estimated roughly 53 out of 58 counties currently meet the new criteria, but not all will reopen at once. Each county must file documentation showing it meets the new criteria and that officials have plans in place to ensure social distancing and reinstate restrictions if necessary.

But there’s one critical hitch: Governor Newsom has stated that “counties can choose to continue more restrictive measures in place based on their local conditions.”

Read more here.

In brief

As the COVID-19 pandemic stretched across the globe, companies shifted to remote working environments and many reduced staff, all without much of an opportunity to prepare. The past two months have presented a serious threat to data security, including the most vulnerable financial data, personal data of employees and customers, and trade secrets. These risks cut across all sectors — financial services, industrial manufacturers, health care, and professional services. Recent experience confirms that an effective information security strategy should target these most-common threats: phishing, data sprawl, and employee mobility/redundancies.

How to Protect Your Company

Take a holistic approach to threat mitigation and data loss prevention in the face of increased risks. Such an approach must account for data protection, intellectual property (including trade secrets), and employment law. Here are the action items in these uncertain times to help address and mitigate the legal and regulatory risks:

Continue Reading International: Initial Lessons Learned as COVID-19 Exposes Critical Gaps in Information Security

On May 6, 2020, Governor Newsom issued Executive Order N-62-20, creating a rebuttable presumption that an employee’s COVID-19-related illness arises out of employment for purposes of obtaining workers’ compensation benefits. This is not the first order of its kind; other states including Alaska, Michigan, Minnesota, Missouri, Utah, and Wisconsin, have imposed similar rebuttable presumptions. However, most of these jurisdictions have limited the rebuttable presumption to first responders. California’s order doesn’t.

At the federal level, House Democrats are looking to follow suit, proposing a similar presumption for certain federal workers under the Health and Economic Recovery Omnibus Emergency Solutions Act (the “HEROES Act”). If enacted as proposed, the HEROES Act would create a presumption that certain federal employees who contract COVID-19 did so in the course and scope of their employment if the employees have a risk of exposure to COVID-19 at work and on-the-job contact with patients, members of the public, or co-workers. A similar presumption would apply to certain maritime workers.  The House passed the HEROES Act by a vote of 208-199 on May 15, 2020, but tremendous opposition is expected when the bill reaches the Republican dominated Senate.

Is California’s order likely to stick?

It’s difficult to tell. California business owners are unhappy with the likely significant increase in workers’ compensation liabilities and the inequity of shifting the cost of employees’ COVID-19 illnesses to employers. Challenges to the California order would not be surprising.

Continue Reading Are You Sure You Contracted COVID-19 at Work? California Thinks So