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The US Supreme Court’s SFFA decision ending affirmative action in higher education continues to have ramifications for corporate America. Attacks to workplace DEI are gaining momentum with targeted challenges from a variety of angles, not the least of which are those coming from conservative advocacy groups filing lawsuits, requesting agency investigations and pursuing other complaints. Just last week, as many prepared to watch Taylor Swift’s boyfriend perform in the Super Bowl, America First Legal (a nonprofit founded by a former adviser to Donald Trump) filed an EEOC complaint against the NFL challenging the Rooney Rule, a widely used hiring practice that emanated in the NFL and is followed across corporate America. For in-house counsel, this just further emphasizes the need to continue to diligently monitor the changing DEI landscape for signals warranting targeted audits or adjustments to workplace DEI programming.

When should in-house counsel take action? Let’s start to answer that question by looking at where we are now and the escalation of events in the past 7 months.

Timeline of Recent Material Attacks on Workplace ID&E

July 2023 | Letter to Employers from 13 State AGs

Thirteen attorneys general used SFFA to support their opposition to corporate DEI programs (see letter to Fortune 100 CEOs here). In response, attorneys general from other states wrote to the same CEOs stating that SFFA “does not prohibit, or even impose new limits on, the ability of private employers to pursue diversity, equity, and inclusion.”

Continue Reading Is The Risk Calculus Related To Workplace DEI Shifting For US Employers This Election Year?
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The new year brought some good news for California employers. On January 1, 2024, U.S. District Court Judge Kimberly Mueller issued a decision permanently enjoining California state officials from enforcing AB 51, the contested law that sought to prohibit employers from “forcing” job applicants or employees to enter into pre-dispute employment arbitration agreements covering certain discrimination and retaliation claims. The permanent injunction reaffirmed the ability of employers to mandate arbitration for most employment disputes.

This decision comes less than a year after the Ninth Circuit found that the Federal Arbitration Act (FAA) preempts AB 51 in Chamber of Commerce of the United States v. Bonta. As noted in our blog post on the Bonta decision, the Ninth Circuit ultimately upheld a temporary injunction against AB 51, allowing California employers to continue to use employment arbitration agreements while the matter was litigated, and which—given Judge Mueller’s permanent injunction—now can continue indefinitely.

The Lead Up: Recap of the AB 51 Litigation Battle

Here is a quick summary of the AB 51 litigation leading up to the January 1, 2024 permanent injunction:

  • In December 2019, Judge Mueller issued a temporary restraining order, prohibiting California from enforcing AB 51.
  • In September 2021, the Ninth Circuit struck down Judge Mueller’s decision to temporarily restrain California from enforcing AB 51, holding that AB 51 was not largely preempted by the FAA.
  • In August 2022, the Ninth Circuit withdrew its September 2021 decision and voted to take another look at the case through a panel rehearing.
  • In February 2023, the Ninth Circuit, backtracking on their September 2021 decision, held that AB 51 is preempted by the FAA because the deterring penalties that AB 51 imposes on employers is antithetical to the FAA’s policy of favoring arbitration agreements.
Continue Reading End of the AB 51 Saga: California Employers Can and Should Continue Using Arbitration Agreements
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Special thanks to co-authors Thomas Asmar, Victor Flores, Denise Glagau, Christopher Guldberg, Jen Kirk, Maura Ann McBreen, Lindsay Minnis, Kela Shang, Aimee Soodan and Brian Wydajewski.

As many readers likely know, last fall California doubled-down on the state’s hostility to noncompete agreements. Assembly Bill 1076 codified the landmark 2008 Edward v. Arthur Andersen decision that invalidated all employment noncompetes, including narrowly tailored ones, unless they satisfy a statutory exception.
   
AB 1076 also added new Business & Professions Code §16600.1, requiring California employers to notify current (and certain former) employees that any noncompete agreement or clause to which they may be subject is void (unless it falls within one of the limited statutory exceptions).

Individualized written notice must be sent by February 14, 2024 or significant penalties may apply.

Continue Reading Don’t Miss California’s Noncompete Notice Requirement (Deadline 2/14/24) |Review Equity Award Agreements & Other Employment-Related Contracts ASAP
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In this episode, Blair Robinson (Partner, New York) and Lorren Martin (Senior Associate, London) discuss how financial institutions are navigating issues around IDE on both sides of the Atlantic and globally, with Rachel Farr, Senior Knowledge Lawyer.

Click here to tune in.

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Combining the views of 600 senior in-house lawyers at multinational companies across four continents with the insights of Baker McKenzie experts in tax, employment and antitrust, the 7th Edition of our Global Disputes Forecast helps in-house counsel see around corners as they prepare for 2024. The forecast includes detailed predictions for disputes involving ESG, cybersecurity and data, transactions, AI, and geopolitical risk.

We remain in an era best characterized by uncertainty and volatility. Against the backdrop of economic stagnation and geopolitical conflict, the risk and cost of employment disputes is materially higher. In the year ahead, many companies will face economic and technological pressures to restructure, the wave of labor activity signals a return to prominence for American unions, ever expanding equal pay and transparency laws will encourage a spike in discrimination and bias claims, and more. In-house counsel must prepare not only for a continuance of current threats (such as the resurgence of wage and hour class actions – read more here), but also new threats (such as pattern-or-practice-discrimination lawsuits against companies as AI screening and recruiting tools).

For a deeper dive on our 2024 predictions for employment disputes globally, register here for our Global Disputes Forecast Webinar on February 29 at 9 AM EST.

And, to learn more about how our best-in-class team of US employer litigators can help, have a look here or reach out to one of us to connect

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Special thanks to co-presenters Maria Cecilia Reyes, Victor Estanislao Marina and Katherine Ninanya.

Many employers have made getting their arms around their remote work populations a new year’s resolution for 2024. Simultaneously, a growing number of jurisdictions are offering Digital Nomad Visas to attract foreign nationals — and some countries are actually shifting their rules because they became such a hotspot in recent years. Employers must be aware of the changing landscape, and how new laws might not only impact their Immigration compliance but also how such policies may open them up to tax and benefits ramifications.

In our latest Global Immigration and Mobility Video chat, our on-the-ground immigration and mobility attorneys in the US, Colombia, Argentina and Peru explore the latest options, specific requirements, and legal “gotchas” that employers should watch out for.

Click here to view the video.

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Tracking and complying with federal, state, and local wage and hour requirements has long been top of mind for employer as wage and hour liability continues to be one of the most expense employment law risks. Indeed, in 2022, the 10 largest reported settlements for wage and hour actions totaled $574 million.

Currently, in addition to federal rulemaking and enforcement activities, state and local legislatures and administrative agencies remain extremely active in the wage and hour space, resulting in an increasingly complex compliance environment. Given the intricacies here, we help companies identify the areas of wage and hour law that are most likely to trigger liability.

In 2024, among other things, we recommend that companies invest in compliance related to:

  • Minimum wage changes | Over 20 state and local jurisdictions increased minimum wage requirements effective January 1, 2024, with more to follow. Some states are also eliminating tip credits (e.g. Alaska, California, DC, Minnesota, Montana, Nevada, Oregon and Washington) and subminimum wage categories and imposing new or increased salary thresholds.
  • A tsunami of pay transparency laws | As pay disclosure in job postings requirements continue to gain traction (e.g. in California, Colorado, Connecticut, DC, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island and Washington) employers should understand how this impacts their compensation and recruitment policies, including how to address employee questions when pay information is disclosed for open roles. Towards the end of 2023, a flurry of class actions were filed in Washington alleging violations of the state’s new pay transparency law. We’re tracking this litigation and will report significant updates.
    • On a related note, we always recommend that companies conduct periodic pay equity audits with counsel to protect against unexplained disparities that may encourage discrimination suits.
    • Also, for a quick and easy way to stay on top of pay transparency obligations globally, we offer a fixed fee Global Pay Equity Compliance Compendium that monitors the legal pay equity requirements and forthcoming developments across 70+ jurisdictions (of which over 40 currently have transparency or reporting requirements). Please contact a member of our team for more information.
  • Comparable pay for temporary workers | In some jurisdictions (e.g. Illinois and New Jersey), day and temporary workers have significant new rights and protections, including comparable pay requirements. It’s important for companies to keep tabs on their temporary worker utilization and the compliance obligations of employers and temporary labor service providers.
  • DOL enforcement and rulemaking | Employers should continue to monitor federal DOL priorities, including:
    • Investigation and prosecution of off-the-clock claims and child labor violations and
    • Rulemaking regarding minimum wage and overtime pay exemptions for executive, administrative, and professional employees.

For wage and hour guidance or defense, please contact a member of our team.

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DC is the first jurisdiction in 2024 to join the likes of many states (including California, Colorado, Connecticut, DC, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island and Washington) in requiring pay transparency in job postings. 

On January 12, 2024, Mayor Muriel Bowser signed the Wage Transparency Omnibus Amendment Act of 2023. If the Act survives the 30-day period of review by Congress (as required under the District of Columbia Home Rule Act), it will go into effect June 30, 2024. 

The Act will apply to employers with at least one employee in DC.

New Requirements

Covered employers must provide the minimum and maximum projected hourly or salary pay in all job listings, as well as a description of the position. Employers will also be required to disclose the existence of healthcare benefits to prospective employees before the first interview. Further, in line with several states that have passed salary history ban laws, employers will be prohibited from screening applicants based on their wage history, or seeking the wage history of a candidate from a former employer.  Finally, employers will also be required to post a notice in their workplaces notifying employees of their rights under the Act. This notice must be posted in a conspicuous place, in at least one location where employees congregate.  

Continue Reading New Year, New Rules in DC: This January the District of Columbia Joins the Pay Transparency Club
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Illinois employers navigated an avalanche of new laws in 2023, with more on the horizon in 2024 (and even 2025). New paid leave obligations for Illinois (and Chicago and Cook County) employers are a significant change, and additional developments expand employer liability in some circumstances where individuals are victims of gender-related violence. There are also new obligations for employers who use temporary employees, and increased protections for striking workers–not to mention a soon-to-be requirement for employers to include pay scale and benefits information in job postings starting January 1, 2025.

Here are key updates that Illinois employers should be aware of for 2024–and beyond.

1. New paid leave laws in Illinois, Chicago and Cook County

Employers in Illinois, Chicago and Cook County have new paid leave obligations for 2024 under three new laws:

  • The Illinois Paid Leave for All Workers Act (PLAWA) (effective January 1, 2024) requires Illinois employers to provide most employees with a minimum of 40 hours of paid leave per year to be used for any reason at allnot just for sick leave.
  • The Cook County Paid Leave Ordinance (effective December 31, 2023, the sunset date of the prior Cook County Earned Sick Leave Ordinance) covers employees who work in Cook County and largely mirrors the PLAWA. The Cook County Commission on Human Rights will begin enforcement of the paid leave Ordinance on February 1, 2024.
  • The Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (effective July 1, 2024) will require covered employers to provide eligible employees 40 hours of paid sick leave and 40 hours of paid leave (the latter usable for any reason) per 12-month accrual period, for a total entitlement of up to 80 hours of PTO per 12-month period.

Importantly, under both the PLAWA and the Cook County Paid Leave Ordinance:

  • Eligible employees earn 1 hour of paid leave for every 40 hours worked, up to a minimum of 40 hours in a 12-month period (with exempt employees presumed to work 40 hours per workweek for accrual purposes, but leave accrues based on their regular workweek if their regular workweek is less than 40 hours)
  • Though unused accrued paid leave from one 12-month period can be carried over to the next, employers can cap the use of paid leave in one 12-month period to 40 hours
  • Frontloading is permitted, and employers who frontload 40 hours at the beginning of the 12-month period are not required to carry over unused accrued paid leave
  • Employers cannot require employees to provide a reason they are using paid leave, or any documentation or certification as proof or in support of paid leave

The Chicago Paid Leave Ordinance diverges from the PLAWA and the Cook County Ordinance in several ways, including:

  • Covered employees will accrue one hour of paid sick leave and one hour of paid leave for every 35 hours worked-five hours less than what is required to accrue an hour of paid leave under the PLAWA or Cook County Ordinance
  • Employees may carryover up to 80 hours of paid sick leave and up to 16 hours of paid leave from one 12-month accrual period to the next
  • Employers may frontload 40 hours of paid sick leave and 40 hours of paid leave on the first day of the 12-month accrual period. Frontloaded paid leave does not carry over from one 12-month period to the next (unless the employer prevents the employee from having meaningful access to their PTO), but up to 80 hours of unused paid sick leave does
  • Employers with more than 50 employees in Chicago are required to pay the employee the monetary equivalent of unused accrued paid leave when an employee separates from the employer or transfers outside of the City of Chicago (see chart below for specifics)
  • Unlike in the PLAWA or Cook County Ordinance, unlimited PTO is specifically addressed in the Chicago Paid Leave Ordinance (so employers with unlimited PTO policies should review the Ordinance closely)
Continue Reading A Legislative Snowstorm: Key 2024 Updates for Illinois Employers Include a Number of New Leave Obligations and More
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Join us for our virtual New York 2023-2024 Employment Law Update on Tuesday, February 13, 2024 at 1 pm ET.

In this 60-minute session, our team will highlight what employers in New York and the surrounding areas need to know to effectively navigate 2024, with practical tips to handle the latest developments including:

  • The shifting legal landscape impacting employee noncompetes in the US and globally, with a focused update on New York, New Jersey, and Massachusetts (plus important considerations when including noncompetes in equity awards)
  • Best practices for using AI in the workplace, with a look at how New York City’s Local Law 144 is impacting employers, and pending legislation in New York State, New Jersey, and other states
  • A “quick hits” roundup of the most impactful changes for US employers this year, including the status of pay equity / pay transparency requirements and the NLRB‘s recent employee-friendly wave of decisions

Click here to register.