Special thanks to guest contributors: Jeff Martino and Katelyn Sprague.
Baker McKenzie’s Labor and Employment, Trade Secrets and Antitrust lawyers explore the impact on employers of the severe limitations on post-employment noncompete restrictions outlined in President Biden’s Executive Order on Promoting Competition in the American Economy and the supporting Fact Sheet.
Click here to watch the video.
Special thanks to Jeffrey Martino and Bradford Newman for their contributions to this post.
On July 9, 2021, President Biden issued his Executive Order on Promoting Competition in the American Economy (EO) (Fact Sheet here) signaling support for severe limitation of post-employment noncompete restrictions–a move likely to add fuel to the fire of states passing laws to limit the use of post-employment noncompetes. The EO Fact Sheet states that the banning or limiting of noncompetes will “[m]ake it easier” for employees to “change jobs[.]” Though employers may balk, given Biden’s campaign promises and support for passage of the Protecting the Right to Organize (PRO) Act (see our prior blog here), employers should not be surprised.
The EO encourages the Chair of the Federal Trade Commission (FTC) to exercise the FTC’s statutory rulemaking authority to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” It is uncertain whether that rulemaking will entirely ban or just limit noncompete agreements; focus on restricting noncompetes for all workers or just those considered more vulnerable (such as low wage earners); restrict nonsolicit agreements along with noncompetes; or preempt state law.
The EO also encourages the Attorney General and the Chair of the FTC to consider revising the October 2016 Antitrust Guidance for Human Resource Professionals “to better protect workers from wage collusion” by (as the Fact Sheet explains) strengthening antitrust guidance to prevent the suppression of wages or reduction of benefits through employer collaboration and sharing of wage and benefit information. As we explained in a recent client alert, a push to scrutinize competition issues in labor markets was already in play, tracing back to the 2016 Antitrust Guidance, in which the Department of Justice and FTC alerted companies that “naked” wage-fixing and no-poaching agreements could be prosecuted criminally, and that employers competing to hire or retain the same employees are “competitors” from an antitrust perspective.
A proposed bill in California seeks to protect workers against nondisclosure agreements and empower them to speak out about alleged acts of discrimination, including racism. Senate Bill 331, known as the Silenced No More Act, was introduced in February 2021 and seeks to expand protections against confidential settlements to cover all forms of harassment or discrimination under California law, including on the basis of race, ancestry, religion or gender identity. If passed, the law will impose greater restrictions on companies’ freedom to contract settlement and non-disparagement agreements.
New Obligations if SB 331 Passes
Several Employer-Friendly Changes to Observe
We are pleased to share a recent SHRM article, “Who Can Know About Employee Vaccination Status,” quoting Emily Harbison. This article covers employers questions about when supervisors can be told about employees’ vaccination status and whether workers can wear badges indicating they’ve been vaccinated. The answers are complicated by the fact that vaccination status is considered confidential medical information, according to the Equal Employment Opportunity Commission (EEOC).
To read more, click here.
This article was originally published in SHRM.
Special thanks to our summer associate Brianna Miller for her contributions to this post.
In Trinity Services Group, Inc. v. NLRB, No. 20-1014 (June 1, 2021), the US Court of Appeals for the DC Circuit recently rejected the National Labor Relations Board’s (NLRB) attempt to prohibit employers from expressing opinions the NLRB considers baseless. In reversing the NLRB, the Court held that the National Labor Relations Act (the “Act”) only prohibits employer speech containing a threat of reprisal or the promise of benefits, and that expressions which are merely “views, arguments or opinions” are not unlawful.
The case arose when an employee discovered a mix-up regarding the amount of her accrued paid leave. When she raised the issue with her supervisor, he pinned the blame on the union. The NLRB and the Court both found there was no objective basis for blaming the union rather than the employer for the mix-up.
The Court examined the provisions in Section 8(a)(1) of the NLRA, which proscribes certain speech. Section 8(a)(1) makes it unlawful for an employer to “interfere with, restrain or coerce employees” in the rights guaranteed by the Act. The Court also considered the provisions in Section 8(c) which guarantees parties freedom of speech, specifically that “[t]he expression of any views, argument, or opinion…shall not constitute an unfair labor practice.” The Court sought to reconcile the two provisions, and holding that only speech containing a threat of reprisal or promise of benefits is prohibited by the NLRA, while Section 8(c) protects “any” view, argument or opinion. The Court held the statement the NLRB found illegal contained neither a threat of reprisal or the promise of benefit and thus was not illegal. Undeterred by the plain meaning of the word “any,” the NLRB requested the Court to create an exception under Section 8(c) for statements which are “patently false.” The Court rejected that request as contrary to the plain language of the section.
Ordinarily, courts defer to the National Labor Relations Board’s (NLRB) factual findings and its remedial orders given the Board’s broad discretion when fashioning a remedy. However, in the D.C. Circuit’s recent decision in RAV Truck & Trailer Repairs Inc. v. NLRB, 997 F.3d 314 (D.C. Cir. 2021), the Court refused to do so.
Sometimes being too persuasive can have a downside, as Peter Robb, former General Counsel of the NLRB can attest. Robb had convinced the NLRB to find an owner had illegally closed his business and had further persuaded the NLRB to order it reopened. Contrary to common practice, the Court refused to rubber stamp the NLRB’s factual findings or to defer to the remedy, stating that the NLRB’s order “does not purport to explain how restoration is even factually possible.” Instead, the Court gave the NLRB a second chance at finding the necessary evidence in the now closed record.
Continue Reading DC Circuit Court Reins in NLRB: No “Rubber Stamp” of NLRB’s Findings and Remedy
A second court of appeals has refused to adopt a National Labor Relations Board (NLRB) decision declaring an employee’s speech violated the National Labor Relations Act. See Tecnocap, LLC v. NLRB, 2021 U.S. App. LEXIS 18080 (4th Cir., June 17, 2021). Similarly, in a decision issued earlier this month, the D.C. Circuit vacated an NLRB decision, finding instead it was not unlawful for an employer to make a false statement. See Trinity Servs. Grp. v. NLRB, 2021 U.S. App. LEXIS 16314 (D.C. Cir., June 1, 2021) (which we blogged about here). In Tecnocap, the Fourth Circuit deemed the NLRB’s decision out of bounds because in its view the employer’s speech “communicated accurate and lawful information,” and did not constitute unlawful “direct dealing” with its employees.
We recently published an update to our 50-state Shelter-In-Place / Reopening Tracker.
Please see HERE. This is updated weekly.
For your convenience, here is a summary of the major updates from around the country:
You can also view our brochure which highlights key areas of expertise where we can support your business’s tracking and reopening plans.
For more information, please contact your Baker McKenzie attorney.
Special thanks to presenters Johan Botes (Johannesburg), Joanna Matthews-Taylor (Dubai) and Sertac Kokenek (Istanbul – Esin Attorney Partnership).
Our four-part Global Guided Tour for US Multinational Employers webinar series is your passport to ensure that your organization is up to speed on the key labor and employment issues affecting business operations in Europe, the Americas, Asia Pacific, and the Middle East and Africa.
During the final stop on our tour around the globe which took a deep-dive into the Middle East and Africa region, moderated by Emily Harbison, Baker McKenzie’s in-market presenters discussed the most recent developments and challenges impacting employers and shared legal updates, practical tips and takeaways for companies to action now.
Please click here to view a recording of the webinar highlighting MEA.
Missed a session in our Global Guided Tour for US Multinational Employers series? Each 60-minute webinar is available to view on-demand on The Employer Report.
On June 21, Santa Clara County’s Health Department revoked its May 18 Order (more here) and issued a new Order making it easier for employers to comply.
Now, so long as the business has already completed two rounds of “ascertainment” of the employees’ vaccine status, the business does not have to check employee vaccination status. But, for employers that have not yet completed two checks of vaccination status, the May 18 Order still applies.
Specifically, the June 21 Order provides:
It is important to note that notwithstanding the changes, all businesses must maintain their records of compliance for the duration of the Cal/OSHA COVID-19 Prevention Emergency Temporary Standards.
The Order also includes recommendations to continue to keep the community safe from COVID-19: (1) get vaccinated; (2) continue to emphasize outdoor activities; (3) avoid travel if you’re not fully vaccinated; and (4) continue to regularly test for COVID-19 if you’re not fully vaccinated and, regardless of vaccination status, get immediately tested if you have COVID-19 symptoms.
The County Health Department also revised its FAQs addressing employers’ ascertainment of employees’ vaccination status (linked here and reprinted in full, below) to help employers navigate the obligations. There are a number of new and helpful FAQ; they are in italics for ease of identification.
ASCERTAINMENT OF VACCINATION STATUS OF EMPLOYEES
All businesses and governmental entities are required to “complete two rounds” of ascertainment of vaccination status for their personnel. What does it mean to “complete” a round of ascertainment of vaccination status?
A business or governmental entity has completed an initial round of ascertainment of vaccination status of personnel when it has (1) received responses to a request for vaccination status from all of its employees, and (2) made a good-faith effort to obtain vaccination status from all non-employee personnel working onsite in its facilities. With respect to a second or subsequent round of ascertainment, the business or governmental entity must receive a response from all of its employees who were not confirmed to be fully vaccinated during the prior round of ascertainment, and it must make a good-faith effort to obtain vaccination status from all non-employees working onsite in its facilities who were not previously confirmed to be fully vaccinated.
After completing two rounds of ascertainment of vaccination status, I hired new workers. Do I need to ascertain their vaccination status?
You are no longer covered by the ascertainment of vaccination status requirement under the County’s May 18 Order, which has been rescinded. However, employers that are covered by Cal/OSHA’s Emergency Temporary Standards “must record the vaccination status of any employee not wearing a face covering indoors.” For more information, see the Cal/OSHA ETS FAQs here (under “Vaccines”).
Why are businesses and governmental entities required to complete two rounds of ascertainment of vaccination status and record the vaccination status of their workers?
Vaccines are the most effective way to reduce transmission of COVID-19, and to prevent people from getting sick or dying from COVID-19. The rules that businesses and governmental entities must follow to protect workers from COVID-19 are different depending on whether a worker is vaccinated or not. Businesses and governmental entities need to know the vaccination status of their workers so they can follow the rules, and so they can keep their workers, customers, and the community safe.
What should businesses and governmental entities do to determine vaccination status of their workers?
Businesses and governmental entities must complete two rounds of ascertainment of vaccination status to determine whether each of their employees (and any contractors or volunteers working in their facilities) is fully vaccinated or not. Businesses and governmental entities must have a record for each staff member as of the dates of ascertainment reflecting that person’s vaccination status. The record may document a business’s or governmental entity’s review of documentation establishing vaccination status (e.g., the employee’s vaccine card), or the employee’s completed Certification of Vaccination Status. A template Certification of Vaccination Status is available here.
I have a worker who won’t tell me whether they are vaccinated? What do I do?
You must document that the worker declined to disclose their vaccination status, assume that they are not fully vaccinated, and follow all the rules that apply to workers who are not fully vaccinated.
What was the deadline for determining the vaccination status of my workers?
You were required to request and document the vaccination status of all personnel no later than June 1, 2021. For workers who were not fully vaccinated or declined to disclose their vaccination status, you were required to request updated vaccination status every 14 days thereafter (e.g., June 15, June 29, July 13, etc.). If you have not yet completed two rounds of ascertainment of vaccination status, you must complete the first round immediately and the second round 14 days thereafter.
Do businesses have to keep records of who is vaccinated and who is not?
Yes. Businesses and governmental entities must maintain appropriate records to demonstrate completion of two rounds of ascertainment pursuant to the County Health Officer’s May 18, 2021 Order for the duration of Cal/OSHA’s COVID-19 Prevention Emergency Temporary Standards.
What happens if I fail to complete two rounds of ascertainment of the vaccination status of my workers?
Because businesses and governmental entities have to follow different rules for vaccinated as opposed to unvaccinated employees, all businesses must complete two rounds of ascertainment of the vaccination status of their workers. Any business that fails to ask about and record the vaccination status of its workers is subject to enforcement, and may be required to pay fines of up to $5,000 per violation per day.
Am I required to complete two rounds of ascertainment of vaccination status for my remote workers, too?
You are required to complete two rounds of ascertainment of the vaccination status of all your workers who perform any work at a facility or worksite in the county. You are also strongly encouraged, but not required, to complete two rounds of ascertainment of the vaccination status of all your other workers.
Does HIPAA apply when an employer asks an employee for their vaccination status?
No. HIPAA applies to certain entities, such as healthcare providers and health plans, and what protected health information they can share about their patients or members under what circumstances. HIPAA does not govern what information employers may request from their employees.
What confidentiality rules do employers need to follow when they collect and store information regarding employee vaccination status?
Generally, employers must treat this information the same way they treat other similar private information they receive from their employees, including, for example medical conditions for which they may request time off, etc.
Do workers have to disclose their vaccination status to their employer?
Under current County rules, employers must complete two rounds of ascertainment of vaccination status, but employees may decline to provide that information. The sample Certification Form specifically includes that option for employees. If an employee declines to provide their vaccination status, the employer should assume the employee may be unvaccinated and follow State and local requirements for unvaccinated employees.
Do employers have to provide information regarding their employees’ vaccination status to the County Public Health Department?
No, employers do not provide this information to the County. Instead, they are required to collect it and have it available to demonstrate their compliance with this requirement.
Under what circumstances would an employer have to share employee vaccination information?
Generally, employee vaccination information is treated as confidential, but can be shared in certain instances. For example, an employer may be asked to demonstrate compliance with the requirement related to employee vaccination status if the County receives information suggesting that the employer has not complied. The State Occupational Safety and Health Administration (Cal/OSHA) may also request documentation from an employer demonstrating that they have complied with all of the requirements specific to employees who are vaccinated versus unvaccinated, and knowing which employees are vaccinated will allow employers to comply with those requirements.
What is the simplest way to comply with the requirement to determine employees’ vaccination status?
Compliance with this requirement takes only a few simple steps. One simple way for a business to comply is by doing the following:
I have a contractor who is doing work at my business. Do I have to determine the vaccination status of all the contractors’ employees?
You can rely on contractors to complete two rounds of ascertainment of the vaccination status of their own employees, but you should confirm with your contractors that they have complied with this requirement.
I do not have any employees based in Santa Clara County. However, some of my employees travel into the county infrequently for work. Do I need to ascertain those employees’ vaccination status?
No. You only have to determine vaccination status for workers who are based at worksites in Santa Clara County or who regularly work at worksites in the county.
I manage a non-profit with a large number of volunteers. Some of these individuals volunteer regularly at our worksites in the county. However, many of these people are one-time volunteers. Do I have to ascertain the vaccination status for all of our volunteers?
You only have to complete two rounds of ascertainment of the vaccination status of volunteers who regularly work at worksites in the county. Therefore, you would not have to ascertain the vaccination status for one-time volunteers.
My company owns a building in the county where our employees work. We lease several floors to other businesses who have offices completely separate from my company’s office, other than common areas like the first-floor lobby and elevators. Is my company required to ascertain the vaccination status of the employees of those separate businesses?
If your company leases office space to other businesses that are completely separate from your own company’s office, you do not have to ascertain the vaccination status of your tenants’ employees. But the tenant employer is responsible for completing two rounds of ascertainment of the vaccination status of its own employees.
I manage a grocery store in the county, and we have a vendor onsite who runs a small coffee counter inside the store. Do I have to ascertain the vaccination status of the employees of that coffee counter?
Yes, because the coffee vendor regularly provides goods and services in your business’s worksite, your business must complete two rounds of ascertainment of the vaccination status of the vendor’s employees. You can, however, rely on the vendor to determine its own employees’ vaccination status, if you confirm with the vendor that it has complied with this requirement.
Sale representatives occasionally come into my business to market their products. Does my office have to ascertain the vaccination status of these sales representatives?
If these sales representatives do not work regularly in one of your offices, you are not obligated to ascertain their vaccination status.
I requested vaccination status from all of my employees, but some of them did not respond by June 1. Will I be fined?
So long as a business made appropriate, good faith efforts to gather vaccination status information for its personnel by the June 1 deadline, and followed up with individuals who did not respond, the business will be considered in compliance with the requirement. Businesses should be similarly diligent in gathering this information as they would be in gathering information needed to comply with other legal requirements applicable to businesses—e.g., employee time sheets, payroll records, and W-9 and W-4 forms.
For assistance navigating this or other COVID-19 health and safety orders, contact your Baker McKenzie employment attorney.
