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Happy Halloween from the EEOC! The federal agency’s 2022 EEO-1 Component 1 data collection is now open.

  • The deadline for submitting and certifying 2022 data is December 5, 2023

Covered employers

By way of reminder, all private employers that have at least 100 employees are required to file the EEO-1 form annually, detailing the racial, ethnic and gender composition of their workforce by specific job categories. Likewise, federal government contractors and first-tier subcontractors with 50 or more employees and at least $50,000 in contracts must file EEO-1 reports. The form does not currently include pay data, though some states (like California) have added that requirement. 

Non-binary employees

The updated instruction booklet provides more detail on reporting the sex of employees who self-identify as non-binary. Because the EEO-1 Component 1 data collection form still provides only binary options (i.e., male or female) for reporting employee counts by sex, job category, and race or ethnicity, the booklet states that employers may voluntarily choose to report employee demographic data for non-binary employees in the “comments” section of the report. Employers that voluntarily choose to report non-binary employees in the “comments” section should not assign such employees to the male or female categories or any other categories (i.e., job category and race or ethnicity) within the report.

For support with your filing obligations, please contact a member of our team.

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With special thanks to Danielle Benecke and Ben Allgrove for their contributions.

Baker McKenzie recently hosted industry leaders from Anthropic, Google Cloud and OpenAI in Palo Alto to discuss how in-house legal counsel can best reckon with the transformative power of GenAI.

Baker McKenzie partners joined the panel, sharing insights from their vantage point both advising clients on deploying GenAI and our own experience of using it within one of the largest legal businesses in the world.

The discussion was conducted under Chatham House rules, but read our 5 strongest recommendations for in-house counsel here.

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Special thanks to co-authors Andrew Shaw, Dave Bushuev and our articling student Ravneet Minhas for sharing this update from Canada.

In the United States, there have been many union-friendly changes at the NLRB and a number of high profile strikes making headlines in 2023. Our neighbors to the north are also experiencing an uptick in union activity.

With pervasive inflation and an uncertain job market, many Canadians are emerging from the pandemic with bolder workforce demands. For example, in the spring of 2023, federal public servants made headlines with the largest strike in Canadian history. More recently, 3,000 Metro grocery store workers went on strike across Toronto, demanding higher wages. In mid-October 2023, GM narrowly averted significant disruptions to its operations by reaching a deal with Unifor, which represents 4,300 workers in Ontario.

Employers are rightly concerned about the potential for increased union activity, which can cause significant disruptions to operations. There are many things employers can do to stay union free, but it requires treading carefully because labour laws offer extensive protections to employees’ right to unionize. One wrong step by an employer can lead to penalties, fines, and potentially automatic certification.

Understanding how quickly the 3-step certification process unfolds

The certification process formalizes the collective bargaining relationship. And, understanding how this process works and appreciating how quickly it can move forward is essential for developing an effective union avoidance strategy.

Generally speaking, the process for certification in Ontario involves three steps:

1. The Organizing Drive

In this first step, to the extent possible, the union will try to keep the organizing drive a secret. During this period, the union will typically attempt to gauge employee interest by having union representatives approach them inside or outside the workplace, as well as online, talking to them about any issues they may have with the workplace, and sharing union information with them. Most union organizing campaigns involve signing up employees as union members and collecting union membership cards. One way that unions target employers for a union drive is by obtaining the names, contact information, and/or home addresses of the employees of a certain workforce, which they use to send them propaganda.

Employers are often unaware that this step is occurring even though a union organizing drive can last for months (or, in some cases, even longer). It is important for management to have reliable sources in the workforce to advise them when a union drive is happening. Timing is critical here.

Continue Reading Best Practices for Employers Amidst Signs of a Labor Union Resurgence in Canada
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Employee handbooks are at the top of employers’ key priorities.

Why? The NLRB’s recent decision in Stericycle adopted a retroactive “employee friendly” standard for workplace rules, including those often included in handbooks. In addition, the new year often rings in new laws requiring changes to workplace policies often included in handbooks. And, the US Supreme Court decision banning affirmative action in higher education has led employers to take a closer look at their inclusion, diversity and equity (ID&E) related policies and statements in employee handbooks. 

What does this mean? There’s some urgency for employers to get a handle on how they may need to revise their handbooks, in response to both the current landscape and new laws taking effect soon.

In this video, our Labor & Employment lawyers discuss the practicalities of what the Stericycle case means for handbooks, the latest and projected legislative changes affecting workplace policies, and how (and why) employers may wish to give their ID&E-related policies in handbooks a refresh.

Now is the perfect time for employers to get their arms around what’s coming down the pike that may require them to make changes to their handbooks — and we’re here to help.

Click here to watch the video.

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In first-of-its-kind legislation, under SB 54, California will require venture capital companies to collect and report diversity data from portfolio company founders as soon as March 1, 2025. The new Fair Investment Practices by Investment Advisers law intends to increase transparency regarding the diversity of founding teams receiving venture funds from covered entities in California.

Covered Entities

Venture capital companies are covered by the new requirements if they:

  1. Primarily engage in the business of investing in, or providing financing to, startup, early-stage, or emerging growth companies, or manage assets on behalf of third-party investors, including, but not limited to, investments made on behalf of a state or local retirement or pension system; and
  2. Have a nexus to California, by:
    • Being headquartered in California;
    • Having a significant presence or operational office in California;
    • Making venture capital investments in businesses that are located in, or have significant operations in, California; or
    • Soliciting or receiving investments from a person who is a resident of California.

Key Reporting Requirements

Starting March 1, 2025, and annually thereafter, covered entities must report specified information about the founding teams of all businesses in which the covered entity made a VC investment in the prior calendar year and certain other investment information to the California Civil Rights Department. (CRD is the government agency that collects pay and demographic data from private employers of 100 or more employees in California.)

  • Founder Demographic Data

Covered entities must report, at an aggregated level, for each member of the founding team (to the extent information was provided, as disclosing information by founding team members is voluntary and they will not be penalized for declining to answer), such person’s gender identity, race, ethnicity, disability status, sexual orientation, veteran status, and whether such person has California residency. Data must be provided to CRD on an aggregated level and anonymized basis.

  • Investment in Diverse Funding Teams Data

Covered entities must also report the total number and dollar amount (each, as a percentage of total VC investments made) of VC investments to businesses primarily founded by diverse founding team members, aggregated and broken down by each of the above categories.

“Primarily founded by diverse founding team members” means more than half of the founding team members responded to the annual survey, and at least half of the founding team members self-identify as a woman, nonbinary, Black, African American, Hispanic, Latino-Latina, Asian, Pacific Islander, Native American, Native Hawaiian, Alaskan Native, disabled, veteran or disabled veteran, lesbian, gay, bisexual, transgender, or queer.

Further, covered entities must disclose the total amount of money in VC investments the covered entity invested in each business during the prior calendar year and the principal place of business of each company in which the covered entity made a VC investment during the prior calendar year.

Privacy Notice

VC companies that are subject to the California Consumer Privacy Act (CCPA) are required to provide a privacy notice at or before the point of collection of personal information to California resident founders and account for the new data processing in its online CCPA privacy policy.

Information on racial or ethnic origin and sexual orientation are categories of “sensitive personal information” that receive additional protections under the CCPA. Businesses are allowed under the CCPA to use sensitive personal information as necessary to comply with applicable law (such as this one). And VC companies remain free to use sensitive personal information without inferring characteristics, which should cover most legitimate use cases to satisfy the reporting requirement. VC companies that do infer characteristics based on racial or ethnic origin or sexual orientation information of a California resident would have to carefully analyze restrictions, compliance requirements, and risks under existing civil rights and anti-discrimination laws.

Failing to Report

Failure to timely file a report will prompt the CRD to notify the covered entity that it must submit a report within 60 days of the notification. Further failure may result in an enforcement action by the CRD.

The legislation empowers the CRD to seek court orders to compel compliance, impose penalties to deter future non-compliance, recover its attorney’s fees, and grant other relief as deemed appropriate.

What’s Next

SB 54 was adopted in the context of increased scrutiny of ID&E efforts.

Earlier this year, the U.S. Supreme Court banned the use of race-conscious admission policies in higher education (see our prior article HERE), and last year, a California court found that a prior bill, AB 979, requiring publicly held corporations with a principal executive office in California to include at least one director from an underrepresented community (including individuals who self-identify as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identify as gay, lesbian, bisexual, or transgender) was unconstitutional (see our prior article HERE).

On October 18, 2023, the Court of Appeals for the Fifth Circuit decided against plaintiffs who challenged a Nasdaq stock market rule that requires listed companies to disclose board diversity data, Alliance for Fair Board Recruitment et al. v. SEC, case number 21-60626. Plaintiffs asserted that the Nasdaq rule would cause unconstitutional discrimination, but the court ruled that the SEC only accepted and did not propose the rule and that Nasdaq is a private entity not subject to constitutional scrutiny.

SB 54 may become subject to similar legal challenges that may delay implementation. However, the VC companies should assess their internal capabilities to prepare for collecting the required information for investments made during calendar year 2024 in order to comply with the reporting obligations and meet the expected March 1, 2025 reporting deadline.

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Recent and rapid artificial intelligence developments have captured public attention and much has been discussed around how organizations will need to prepare.

From an employment standpoint, the increasingly sophisticated potential for AI applications spans the entire employee lifecycle, from recruitment to onboarding, training and more.  
 
In the second report in our Workforce Redesign: Outlooks for Business Leaders series, we explore how businesses can responsibly address evolving AI risk in the context of recruitment and empower a more diverse and engaged workforce. Key considerations include:

  • Critical blind spots in HR and hiring tools oversight as it relates to the use AI.
  • Discrimination and data privacy concerns in the application of AI throughout the recruitment process.
  • The importance of establishing your “AI mindset” across initiatives to withstand rapid change and addressing AI-specific risk areas.

Read the article today to confidently plan for what’s next for your workforce.

More articles coming soon! Our Workforce Redesign: Outlooks for Business Leaders series spans the key areas of change that are shaping the modern workforce, including: responsible AI in HR, the future of flexible work and the war for talent. Visit our hub for all of the insights on this topic to date, with more content coming soon!

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Presented by the Institute for Technology Law & Policy at Georgetown Law in collaboration with Baker McKenzie.

On November 8, join thought leaders from government, the judiciary, academia, and private practice for this timely gathering on the Georgetown Law campus in Washington, DC. Laws and policy surrounding the protection of trade secrets are changing as technology evolves.

In this first-of-its-kind event at Georgetown, intellectual property experts will discuss the following topics:

  • How generative AI is transforming the trade secret landscape
  • The role of non-competes
  • Protecting against leaks of confidential information
  • The impact of China’s emerging trade secret protection landscape on global commerce
  • The future of trade secrets in the US and abroad 

Date: Wednesday, November 8, 2023

Time: 9:00 am to 6:00 pm EST

Location: 500 1st Street Northwest, Washington, DC 20001

Click here to indicate your interest in attending this in-person event.
Click to view the complete agenda.

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In many cases, when a candidate is recruited, they offered a new hire grant of equity awards and (possibly) subsequent “refresh” grants. Depending on the company, this can be a significant component of the employee’s total compensation and may be the most important piece to get the candidate to accept the offer. 

So, naturally, companies tend to include information about the equity awards in the offer letter provided to the candidate, together with information about the employment terms (e.g., base pay, bonus eligibility, etc.). 

If the candidate is to be employed by an entity outside the United States that is different/separate from the company that will be granting the equity awards (typically the parent company), we strongly recommend changing this practice. In a nutshell, we would advise to delete any references to the equity awards from the offer letter (as well as from any employment agreement that may be provided later or at the same time) and to communicate information regarding the equity awards in a separate equity award side letter that is provided by the granting company. 

Continue Reading The Case for Not Mentioning Equity Awards in Offer Letters
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Special thanks to presenters David Hackett, Eva-Maria Ségur-Cabanac, Sali Wissa, Peter Tomczak, Daniel De Deo and William-James Kettlewell.

ESG reporting is evolving quickly. Earlier this year the EU Corporate Sustainability Reporting Directive (CSRD) went into effect, which has broad legal implications for US companies with EU subsidiaries that meet a certain criteria.

In the latest webinar of our Demystifying ESG series, we address what US legal departments need to know about the EU CSRD and provide an overview of the new sustainability reporting requirements.

Click here to view the webinar recording and here to find out if the EU CSRD applies to you.

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This August, the Equal Employment Opportunity Commission published proposed regulations to implement the Pregnant Workers Fairness Act, which became effective June 27.

The new law requires covered employers to “provide reasonable accommodations to a qualified employee’s or applicant’s known limitation related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions,” unless the accommodation will cause the employer an undue hardship.

The proposed regulations are open for public comment through October 10, and must be finalized and implemented by December 29. Although the proposed regulations could change after the comment period, their current form offers perspective on how the EEOC believes the PWFA should be interpreted.

Click here to continue reading this article.

Original article published in Law360.