Compliance

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On October 7, 2020, the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued its initial FAQ regarding President Trump’s Executive Order 13950, Executive Order on Combating Race and Sex Stereotyping (“Executive Order”). As discussed in our recent blog post, the Executive Order prohibits federal contractors from conducting workplace training during the performance of a government contract that inculcates certain “divisive concepts” in employees, and requires federal contractors to impose the same prohibition on their subcontractors and vendors.

The guidance provides some clarity to the Executive Order, which has been widely described as difficult to understand and implement. We highlight some of the guidance’s key points below.Continue Reading DOL Issues Guidance on Controversial Executive Order on Combating Race and Sexual Stereotyping

Following in the steps of precedent setting legislation mandating women on boards two years ago, on September 30, 2020, California Governor Gavin Newsom signed AB 979 into law mandating diversity on certain public company boards of directors. The new law requires publicly held corporations headquartered in California to include at least one person from an underrepresented community by the end of next year, with additional appointments required in future years.

New Obligations

The new legislation is the first of its kind in the U.S. and is the second time California seeks to mandate diversification of public company boards through legislation. (Read more about the 2018 legislation requiring companies to put female directors on their boards here.) The first piece of legislation aimed at increasing gender diversity; AB 979 seeks to increase diversity from “underrepresented communities.”Continue Reading California Mandates More Diversity in Corporate Boardrooms

On September 22, 2020, President Trump issued an Executive Order on Combating Race and Sex Stereotyping (“Executive Order”), following a September 4, 2020 White House memorandum criticizing federal agencies for having “divisive, un-American” training sessions on “critical race theory,” “white privilege,” and other training teaching individuals that the US or any race or ethnicity is inherently racist. The September 4 memorandum instructed federal agencies to cease the funding of any training that fit the description.

The September 22 Executive Order brings federal contractors into the fold, prohibiting them from using any workplace training during the performance of a government contract that inculcates in their employees certain “divisive concepts,” and requiring them to carry those imperatives down to their subcontractors and vendors. Though the Executive Order was “effective immediately” as of September 22, the requirements for contractors affect federal prime contracts entered into on or after November 21, 2020, leaving some time for federal contractors to prepare-or watch as expected legal challenges to the Executive Order play out.

Despite the uncertainty surrounding the Executive Order, federal contractors can take steps to prepare in case the Executive Order applies come November. Here’s what federal contractors need to know now.Continue Reading Can Federal Contractors Provide D&I Training? Executive Order on Combating Race and Sexual Stereotyping Leaves Federal Contractors With No Clear Answer

With special thanks to Amy Greer and Jennifer Klass for contributing to this post.

COVID-19 was officially declared a pandemic in the US on March 13, 2020. Yet, even now, as we are over six months in to the COVID-19 pandemic crisis in the US, employers still continue to face challenges when navigating the sometimes daily changes in health and safety orders, updates from federal agencies, court decisions, and the proliferation of lawsuits. One of the key decision points for many employers is when to reopen, what should drive that decision, the legal risk of “getting it wrong” and how to mitigate that risk. Unlike retailers and restaurants, companies in the financial industry have largely avoided shutting down operations. However, that does not mean they have fully reopened. Where does the financial industry stand in its reopening? What should financial services companies be concerned about in terms of COVID-19 related guidance and recommendations, legal claims by employees, and how can companies mitigate these claims? What are specific COVID-19 related compliance issues unique to investment advisors and broker-dealers? We share our insights below.Continue Reading For Financial Industry Employers During the Pandemic, “Risk” Takes on a Different Meaning

A CEO who becomes entangled in human resources functions by terminating an employee in a distant locale could expose himself to personal jurisdiction (and personal liability) there, the D.C. Circuit Court of Appeals recently held in Urquhart-Bradley v. Mobley, No 19-7716 (D.C. Cir. June 30, 2020).

The message to executives is clear: a termination conversation could count as sufficient contacts for purposes of personal jurisdiction, even if the employee being terminated is in another state and even if the conversation itself was via telephone and not in person. In Urquhart-Bradley, a panel of the D.C. Circuit Court of Appeals (Srinivasan, Chief Judge, Garland, and Millett, Circuit Judges) joined a list of courts that have refused to apply the “fiduciary shield” doctrine, which provides that a nonresident corporate agent generally is not individually subject to a court’s jurisdiction based on acts undertaken on behalf of the corporation. Where the fiduciary shield does not apply, employers are cautioned to leave termination conversations to HR or in-house counsel to keep executives from being haled into court in another jurisdiction.Continue Reading Message From Courts To CEOs: Stay In Your Lane

On June 23, the San Francisco Board of Supervisors voted to approve “right to reemployment” legislation that requires large employers to first offer laid-off workers their old jobs back before offering employment to new applicants (“Ordinance”). It will become effective immediately upon Mayor London Breed’s signature and will expire upon the 61st day following enactment unless extended.

Advocates of the Ordinance argued the requirement is necessary to ensure employers don’t use the pandemic as an opportunity to simply replace old workers with new employees who are younger and less expensive. Organizations lobbying against the Ordinance argued that it is overly burdensome; violates core constitutional principles; runs counter to several federal and state laws; and is extremely vulnerable to abuse. Similar legislation has surfaced in Los Angeles County as well.

Covered Employers

“Covered employers” are defined as for-profit and non-profit employers that directly or indirectly own or operate a business in the City or County of San Francisco and employ, or have employed, 100 or more employees on or after February 25, 2020.Continue Reading San Francisco Provides Temporary Right to Reemployment Following Layoff Due to COVID-19 Pandemic

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 specific state law requirements applicable to employee expense reimbursements. 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

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

The way we work has been permanently transformed by the rapid deployment of a largely remote workforce during the shelter-in-place. Threats to companies’ most valuable confidential data have not merely increased — an entirely new set of legal and technical risks to trade secrets have emerged over the last 90 days that are fundamentally different…