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Special thanks to co-presenters Teresa Michaud and Bradford Newman.

California’s CLE Compliance Deadline Is Approaching…    
We can help!

If your last name starts with H-M, you are probably well aware that your CLE compliance deadline is right around the corner – February 1, 2024. In addition to the general credit requirement, the state of California requires all attorneys to complete:

  • At least four hours of legal ethics
  • At least one hour on competence issues
  • At least two hours on the elimination of bias in the legal profession and society. Of the two hours, at least one hour must focus on implicit bias and the promotion of bias-reducing strategies.

Our lawyers will offer three virtual sessions, focused on key considerations for AI development and utilization, to help you meet your CLE requirements. These sessions will also offer CLE credit in the states of Illinois, Texas, and New York. Participants requesting CLE for other states will receive uniform CLE certificates. 

Please register and let us know which individual session(s) you plan to attend. We look forward to your participation!

Promoting Unity: Overcoming the Risks of Bias and Prejudice in the Workplace

Tuesday, January 16, 2024 | 1:00 – 2:00 pm Pacific
1 hour Elimination of Bias credit (pending approval)Continue Reading California AI CLE Series

New York never rests–especially for employers–and 2023 was no exception. In 2023, New York employers were required to continuously pivot to meet new obligations and adhere to new limitations under freshly-enacted laws, and to closely follow landmark legislation that would significantly impact the workplace if signed. At the top of the list: S3100, a bill that would have banned employers’ use of employee noncompetes if signed (but employers can now breathe a sigh of relief, because Governor Hochul recently vetoed the bill). 2024 promises to continue to be dynamic for New York employers.

Here are ten of the most important changes New York employers need to know right now as we step into 2024–as well as what’s coming down the pike, a couple of important changes you may have missed, and what we’re keeping an eye on as we step into the new year.  

What you need to know right now

1. New York’s bill restricting noncompetes vetoed by Governor Hochul

On December 22, 2023 Governor Hochul vetoed S3100, which would have been the most restrictive state-level ban on employers’ use of noncompetes to date if it had been signed into law. Passed by the New York State Assembly in June 2023, S3100 provided that every contract restraining anyone from engaging in a lawful profession, trade or business of any kind is void to the extent of the restraint; allowed a private right of action for employees; and did not have an explicit “sale of business” exception (for more details on the now-vetoed legislation, see our prior blog here.)

The bill faced opposition by Wall Street and other industries that heavily rely on noncompetes, and business groups pushed for amendments to the bill (which the governor had until the end of 2023 to sign or veto). In late November, Governor Hochul reportedly stated she was in favor of striking a balance that would protect lower- and middle-income workers (up to $250,000) but allow noncompetes for those at higher income levels who are better equipped to negotiate on their own to do so. Reports are that Governor Hochul recently tried to negotiate amendments to the bill in this respect, but that negotiations broke down.

Employer takeaway:

  • We expect this issue to make an appearance in New York’s next legislative session. Employers should keep an eye out for the introduction of new bills to restrict noncompetes and follow their progress. Now that Governor Hochul has expressed favor for an income threshold to ban noncompetes, legislators may be more likely to craft a bill that will more easily be signed into law.

Continue Reading New York Employer “Top Ten” (and more): What to Know Heading into 2024

We’re not even out of 2023, and New York employers who engage independent contractors already have new obligations to reckon with before next spring. On November 22, 2023, New York Governor Kathy Hochul signed the New York State “Freelance Isn’t Free Act”, increasing obligations for parties who engage freelance workers (including independent contractors). Starting May 20, 2024, hiring parties (including employers who engage independent contractors) must provide freelance workers with written contracts, pay them within a specified time period, maintain records, and satisfy additional new obligations—and freelance workers will gain a private right of action for violations.

The Act replicates the 2017 NYC’s Freelance Isn’t Free Law, adding administrative oversight and support from the New York State Department of Labor and the New York State Attorney General while maintaining New York City’s local law. The Act will apply to contracts entered into on or after the May 20, 2024 effective date.

Here are some key details:

Definitions: “freelance workers” and “hiring parties” 

The Act defines a “freelance worker” as “any natural person or organization composed of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services in exchange for an amount equal to or greater than eight hundred dollars”—but does not include certain sales representatives, practicing attorneys, licensed medical professionals, and construction contractors. Also, a “hiring party” is any person (other than government entities) who retains a freelance worker to provide any service.

Written contracts required

The Act requires a written contract if the freelance work is worth at least $800, inclusive of multiple projects over a 120-day period. The hiring party must furnish a copy of the contract, either physically or electronically. At a minimum, the written contract must include:

  1. The name and the mailing address of both the hiring party and the freelance worker;
  2. An itemization of all services to be provided by the freelance worker, the value of the services to be provided under the contract, and the rate and method of compensation;
  3. The date on which the hiring party must pay the contracted compensation (or the mechanism by which the date will be determined); and
  4. The date by which a freelance worker must submit to the hiring party a list of services rendered under the contract to meet the hiring party’s internal processing deadlines to allow compensation to be paid by the agreed-upon date.

The New York State Department of Labor will provide model contracts on its website for freelancers and hiring parties to use.Continue Reading More Scrutiny and Obligations for NY Businesses Engaging Independent Contractors Coming Spring 2024

Heads up, New York employers. New York recently expanded its #MeToo statute to bar some of the most common terms for which employers bargain in settlement agreements involving claims of discrimination, harassment or retaliation. On November 17, 2023, Governor Hochul signed S4516 into law, amending Section 5-336 of the General Obligations Law (“GOL”) (New York’s…

Many thanks to our Franchise, Distribution & Global Brand Expansion colleague Will Woods for co-authoring this post.

On October 25, 2023 the National Labor Relations Board issued a final joint employer rule (accompanied by a fact sheet) making it easier for multiple companies to be deemed “joint employers” under the law. This legal classification can have profound consequence by making independent entities now liable for labor law violations as well as obligations to negotiate with unions.

The new standard casts a wider net for “joint-employer” status

Under the new rule, an entity may be considered a joint employer of a group of employees if the entity shares or codetermines one or more of the employees’ “essential terms and conditions of employment.” The Board defines the essential terms and conditions of employment as:

  1. wages, benefits, and other compensation;
  2. hours of work and scheduling;
  3. the assignment of duties to be performed;
  4. the supervision of the performance of duties;
  5. work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  6. the tenure of employment, including hiring and discharge; and
  7. working conditions related to the safety and health of employees.

How the new rule dramatically shifts away from the 2020 rule

In issuing the final rule, the NLRB rescinded the prior 2020 joint employer rule (a remnant of the Trump-era Board), which provided that a business is a joint employer only if it both possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment-with “substantial” meaning control that is not exercised on a “sporadic, isolated, or de minimis basis. ” (For more on the 2020 rule, see our prior blog here.) The 2020 rule’s higher threshold meant a lower likelihood that businesses would be considered joint employers. The new rule’s impact on employers could be wide-ranging, and particularly difficult for non-unionized employers who are not used to navigating typical union activity such as being required to show up at the bargaining table, handling unfair labor practice charges, or dealing with picketing by a vendors’ employees (which would have previously been considered an illegal secondary boycott).

No direct (or even exercised) control required

The new rule rejects the previous rule’s focus on “direct and immediate control.” Instead, now, indirect or reserved control is sufficient to establish joint employer status. Thus, if a company has contractual authority over certain employment terms but never acts on that authority, that may be enough to establish a joint employer relationship. The same goes for a company that exercises authority over another company’s workers through a “go-between” company or intermediary, or a company requiring a vendors’ employees to follow certain health and safety rules while on-premises. In these instances, liability under the National Labor Relations Act, including the requirement to negotiate with a union, could ensue.Continue Reading NLRB Announces Most Expansive Definition of Joint Employment Yet, With Potential Significant Implications for Franchisors, Staffing Agencies and More

The National Labor Relations Board has continued its recent spate of employee-friendly decisions with a new one that will require employers to think through work rules, policies and handbook provisions to determine whether they could–hypothetically, from an employee’s perspective–restrict an employee’s Section 7 rights. 

On August 2, 2023, the National Labor Relations Board (“NLRB” or “the Board”) issued a 3-1 split decision in Stericycle, Inc., bringing back and modifying a prior standard for assessing whether an employer’s facially neutral work rules and policies unlawfully “chill” an employee’s Section 7 rights. Under the new standard, the NLRB will peer through the lens of a “reasonable employee” (more on that below) to determine whether an employer’s work rules and policies have a tendency to restrict Section 7 rights. For employers, this means a complete reassessment of their workplace rules and policies–and the handbooks that those rules and policies are housed in.

The new standard: reasonable tendency to “chill” Section 7 rights, from the employee’s perspective

The new standard (which is the Board’s prior Lutheran Heritage standard, brought back to life and modified) requires the NLRB General Counsel to prove that a challenged work rule has a reasonable tendency to “chill” employees from exercising their Section 7 rights. (Quick reminder: Section 8(a)(1) of the National Labor Relations Act (NLRA) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act, including the right to form, join or assist labor unions, to bargain collectively and to engage in other concerted activities for the purpose of collective bargaining.)

How is this done? That’s the rub for employers.

As an initial matter, the Board will interpret the challenged work rule from the perspective of an employee who is (i) subject to the rule, (ii) economically dependent on the employer, and (iii) also contemplates engaging in a protected concerted activity.

In addition:

  • The employer’s intent in maintaining the rule in question is immaterial. (So even if the employer had no  intent to restrict an employee’s Section 7 rights when developing the work rule or policy–which we suspect will usually be the case–it isn’t material.)
  • The General Counsel will carry her burden if an employee (that same employee described above) could reasonably interpret the rule to have a coercive meaning–even if a contrary, non-coercive interpretation of the rule is also reasonable. All emphasis is ours here, to highlight that the General Counsel’s burden is extraordinarily low. If the General Counsel carries her burden, the challenged work rule is presumptively unlawful.
  • BUT, employers have a chance at rebutting the presumption. The presumption can be rebutted if the employer can prove that the rule advances a legitimate and substantial business interest and that the employer cannot advance that interest with a more narrowly tailored rule. If the employer proves this, the work rule will be found lawful.

What does this mean for employers?

The Stericycle standard has the potential to render a multitude of employment policies and workplace rules unlawful, and will be applied retroactively. Employers should review existing (or new) employee work rules, policies, and handbook provisions to ensure:

  • They are tailored as narrowly as possible to advance the employer’s interest, and to refrain from restricting an employee’s Section 7 rights
  • They explicitly state employees have the right to engage in concerted activities under Section 7
  • Where necessary, they provide an explanation of how the rule or policy does not preclude employees from exercising their Section 7 rights
  • Where possible, they include a list of specific rights the employer is not intending to restrict. Talk to us for recommended language.

Continue Reading Handbook Review Takes on a New Meaning: NLRB Adopts “Employee-Friendly” Standard for Evaluating Workplace Rules

As forecasted in our recent blog Illinois Employer Midsummer “Roundup”: Eight to Know and Two to Watch, our two bills “to watch” are now law. On August 4, Governor Pritzker signed HB 2862 into law, effective immediately, imposing new obligations on employers who use temporary employees, including providing information on their regular employees’ compensation to staffing companies and documenting and keeping records of training provided to the staffing company employee.

And on August 11, Governor Pritzker signed HB 3129 into law, meaning Illinois employers with 15 or more employees have to include the “pay scale and benefits” in any job posting starting January 1, 2025.

We highlight a few key points of each new law below, and for more details, check out our Illinois Midsummer “Roundup” blog.Continue Reading Illinois Employers: Two Bills We Told You to Watch Are Now Law

It’s one of the hottest summers on record across the US and around the world, and things may be heating up for Illinois employers as well–with pending legislation that, if signed into law, would require employers to include pay scales in job postings and to meet new health and safety-related requirements when using temporary employees. Illinois employers need to be aware of other changes, including possible liability under amendments to the Illinois Gender Violence Act, changes to the Chicago and Cook County minimum wage and new obligations for employers to meet Equal Pay Registration Certificate requirements under the Illinois Equal Pay Act of 2003.

In this blog, we “round up” eight important changes to know and two bills Illinois employers should keep on their radar as we start to round down the summer.

Eight to Know

1. Employers can now face liability under amendments to Illinois Gender Violence Act

On July 28, Governor Pritzker signed HB 1363 into law, which amends the Illinois Gender Violence Act (GVA) effective January 1, 2024 to impose employer liability in certain circumstances where individuals are victims of gender-related violence. Under the GVA, a person who has been the victim of gender-related violence can sue the person who committed the act of violence and seek damages. Now, not only do perpetrators of gender-related violence face liability under the Act–employers can be liable, too.  

What to know

  • Under the new law, employers can be liable for gender-related violence committed in the workplace by an employer or agent of the employer (including independent contractors), but only when the interaction giving rise to the gender-related violence arises out of and in the course of employment with the employer–which is undefined and vague, so we’re hoping for guidance on what this means.
    • Note that “workplace” is defined, and includes the employer’s premises (including any building, real property, and parking area under the control of the employer), and any location used by the employee while performing job duties for the employer, as well as activities occurring off-premises at employer-sponsored events where an employee is not performing the employee’s job duties (think holiday parties).
  • For liability to extend to an employer, the gender-related violence must occur (i) while the employee is directly performing the employee’s job duties and the gender-related violence was the proximate cause of (i.e. substantial factor in causing) the injury, or (ii) while the agent of the employer was directly involved in the performance of the contracted work and the gender-related violence was the proximate cause of the injury. In addition, an employer must also act “in a manner inconsistent with how a reasonable person would act under similar circumstances” to be liable.
  • Notwithstanding the above, in order to be liable, employers must:
    • Fail to supervise, train or monitor the employee who engaged in the gender-related violence–but an employer who provides sexual harassment prevention training pursuant to Section 2-109 of the Illinois Human Rights Act (IHRA) has an affirmative defense that adequate training was provided to the employee; or
    • Fail to investigate complaints or reports directly provided to a supervisor, manager, or owner (or another person designated by the employer) of similar conduct by an employee or the employer’s agent–and fail to take remedial measures in response to the complaints or reports.
  • The statute of limitations for an alleged victim of gender-related violence to sue the employer is four years, or within four years of a victim turning 18 if the victim is a minor at the time the cause of action accrues.
  • The amendments also clarify that the Act does not preclude a victim of gender-related violence from pursuing any other right or cause of action created by statute or common law.

Employers should train HR and managers on the new law, and make sure employees receive appropriate sexual harassment prevention training under Section 2-109 of the IHRA to at least have the affirmative defense available should they face employee claims under the new law.Continue Reading Illinois Employer Midsummer “Roundup”: Eight to Know and Two to Watch

New York in the summer: warm days, Shakespeare in the Park, visits to the beach, and the end of the New York State legislative session–which often means a few surprises for New York employers. This summer, not only do employers have to contend with New York’s amended WARN Act regulations and the enforcement of New York City’s Automated Employment Decision Tool law (both now effective), they also have to keep a close eye on four New York State bills that have cleared both houses of the state legislature and could be signed by Governor Hochul–including one that would arguably be the nation’s broadest ban on employee noncompete agreements. We highlight two changes–and four that could be coming down the pike–New York employers should pay close attention to this summer.

Two to know

1. Amendments to New York’s WARN Act regulations now in effect.

New York State’s proposed amendments to its Worker Adjustment and Retraining Notification (WARN) Act regulations were adopted on June 21 and are now in effect. The definition of a covered employer has been expanded, remote employees must now be included in the threshold count, certain notices must include more information or be provided electronically, and exceptions for providing notice have changed (among other modifications). In addition, there’s a new York State Department of Labor WARN portal for employers to use for “a more streamlined user experience.” Want the details on the WARN Act regulation changes and some helpful tips for employers? See our prior blog here.

2. Enforcement of New York City’s Automated Employment Decision Tool law began July 5.

New York City’s Local Law 144 prohibits employers and employment agencies from using an automated employment decision tool to substantially assist certain employment decisions unless the tool has been subject to a bias audit within one year of the use of the tool, information about the bias audit is publicly available, and certain notices have been provided to employees or job candidates. Violations of the provisions of the law are subject to a civil penalty. Enforcement of the law began July 5, and employers need to be diligent. For those who haven’t done so yet, the first (and immediate) step is to take inventory of HR tech tools. Legal should partner with HR and IT to determine whether the company uses automated employment decision tools to make any employment decisions in a manner that triggers the law. See our prior blog here for additional steps to take, as well as further details on the law, penalties, and some practical tips for employers.

Four to watch

1. New York could become the fifth state to ban employee noncompetes.

On June 21, the New York State Assembly passed S3100 (already passed by the New York State Senate), which will be the most restrictive state-level ban on employers’ use of noncompetes to date if signed into law by Governor Hochul.

Under the bill, every contract that restrains anyone from engaging in a lawful profession, trade or business of any kind is void to the extent of such restraint.

The ban: The bill does not permit employers (or their agents) to “seek, require, demand, or accept a non-compete agreement” from a “covered individual.”

  • A “non-compete agreement” is any agreement (or clause in an agreement) between an employer and a “covered individual” that prohibits or restricts the individual from obtaining employment after the conclusion of employment with the employer. 
  • A “covered individual” is “any other person” who performs work or services for another person on such terms and conditions that puts them in a position of economic dependence on and under an obligation to perform duties for that other person–regardless of whether they are employed under a contract of employment.

Continue Reading New York Employer Summer Roundup: Two to Know and Four to Watch

Splitting the baby on 50 years of precedent, the U.S. Supreme Court (SCOTUS) has clarified that employers must grant a religious accommodation request under Title VII of the Civil Rights Act of 1964 (Title VII) unless the accommodation would result in “substantial increased costs in relation to the conduct of [their] particular business.” On June…