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New Jersey may have started a trend. As of April 10, covered New Jersey employers must now comply with new requirements under the New Jersey mini-WARN Act (see our blog here). New York and California are giving chase, with proposed amendments to New York State’s WARN Act regulations, New York State’s WARN Act, and California’s WARN Act. And New York employers should take note: New York’s WARN Portal is set to go live this month.

Proposed Amendments to NYS WARN Regulations–And a New NYS WARN Portal

The New York State Department of Labor has proposed amendments to the New York State WARN Act (“NYS WARN”) regulations that are intended to account for the post-pandemic workforce, including clarifying how remote work impacts NYS WARN compliance and simplifying language to ensure employers understand their obligations under the law. The Department of Labor is accepting comments to the proposed regulations until May 30, 2023. 

Key items in the proposed amendments to the NYS WARN regulations include:

  • Remote employees included in threshold count: The employers covered by NYS WARN has been expanded to include any employer who employs 50 or more full-time employees, who work at the single site of employment plus individuals that work remotely but are based at the employment site, which may include remote employees in New York as well as other states.
  • Certain notices must be provided electronically: Notices being sent to the New York State Department of Labor Commissioner (“Commissioner”) must be provided electronically and are no longer required to have original signatures.
  • Notice must include additional information: The notice to the Commissioner must include more detailed information about the affected employees, including telephone numbers, job titles, and whether they are paid on an hourly, salary or commission basis. The notice to affected employees must include any other information relevant to their separation, such as information related to any financial incentives an employee may receive if they remain employed by the employer until the effective date of the employment loss, as well as available dislocated worker information.
  • The exceptions for notice are changing:
    • Faltering company exception reduced: The faltering company exception will apply only to plant closings, and will no longer apply to mass layoffs, relocations or reductions in hours.
    • Unforeseeable business circumstances exception expanded: The unforeseeable business circumstances exception will be expanded to expressly include in certain circumstances a public health emergency (including a pandemic) or a terrorist attack.
    • Exception to notice requires determination by Commissioner: The 90-day notice period can be reduced in limited circumstances (including under the faltering company, unforeseeable business circumstances, and natural disaster exceptions) only if:
      • The employer submits a request for consideration for eligibility of an exception to the Commissioner within 10 business days of providing the required notice under NYS WARN to the Commissioner (unless the Commissioner grants an extension);
      • The employer provides a reason for reducing the notice period in addition to any other documents the Commissioner may require; and
      • The Commissioner determines that the employer has established all of the elements of the claimed exception.
  • The calculation of back pay is being clarified for hourly employees: The calculation to be used to determine the average rate of compensation and final rate of compensation for hourly employees is clarified. Such calculation uses the number of hours worked instead of the number of days worked. The days worked method of calculation should still be used for non-hourly employees.
  • The use of payment in lieu of notice is being clarified: Liability for an employer’s failure to give the required notice to employees under NYS WARN will be reduced by amounts paid to an employee in lieu of notice, except where the following conditions are met (then such payments will be considered wages for the notice period):
    • There is an employment agreement or uniformly applied company policy that requires the employer to give the employee a certain amount of notice before a layoff or separation;
    • The employee is laid off without the required notice; and
    • The employer pays the employee an amount equal to the employee’s wages and any benefits for the required notice period.
Continue Reading Employer WARN-ING: Potential Changes to New York’s and California’s WARN Acts Barreling Down the Turnpike
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Join us for a four-part webinar series as our US moderators welcome colleagues from around the globe to share the latest labor and employment law updates and trends. US-based multinational employers with business operations in Asia Pacific, Europe, the Middle East and Africa, and the Americas regions will hear directly from local practitioners on the major developments they need to know, and come away with practical tips and takeaways to implement.

In each 60-minute discussion, we will explore:

  • The impact of the current economic and political climate on multinational employers
  • The current restructuring and cost-cutting landscape (benchmarking & jurisdiction-specific hurdles to plan for)
  • New significant legislative developments
  • Local hot topics in the inclusion, diversity and equity (ID&E) space

We look forward to welcoming you at the sessions relevant to your business — no passport or line ups for customs necessary!

ASIA PACIFIC
Australia, China, the Philippines and Singapore
Wednesday, May 3, 2023
3 pm PT/ 6 pm ET
Click here to register.

EUROPE
France, Germany, the Netherlands, Spain and the UK
Wednesday, May 10, 2023
9 am PT/ 12 pm ET
Click here to register.

THE MIDDLE EAST AND AFRICA
Egypt, Saudi Arabia, South Africa, Türkiye and the UAE
Wednesday, May 17, 2023
9 am PT/ 12 pm ET
Click here to register.

THE AMERICAS
Argentina, Brazil, Canada, Colombia and Mexico
Wednesday, May 24, 2023
9 am PT/ 12 pm ET
Click here to register.

To view these programs in a different time zone, click here. 
Please “register” for a copy of the recording and materials if you are unable to attend live.

To view the complete roster of presenters for each regional program, click here.

CLE Accreditation

Each program is approved for 1.0 general California CLE credit, 1.0 general Illinois CLE credit, 1.0 areas of professional practice New York CLE credit, and 1.0 general Texas CLE credit. Participants requesting CLE for other states will receive Uniform CLE Certificates. Baker & McKenzie LLP is a California and Illinois CLE approved provider. Baker & McKenzie LLP has been certified by the New York State CLE Board as an accredited provider in the state of New York. This program is appropriate for both experienced and newly admitted New York attorneys. Baker & McKenzie LLP is an accredited sponsor, approved by the State Bar of Texas, Committee on MCLE.
 
Each 1-hour activity can be applied towards the 9 Substantive Hours of Continuing Professional Development (CPD) required by the Law Society of Ontario.
 
**While CLE credit may be pre-approved in certain jurisdictions, final CLE accreditation approval is anticipated, but not guaranteed.

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As discussed in our blog here, in February the National Labor Relations Board issued the McLaren Macomb decision prohibiting employers from “tendering” to employees separation or severance agreements that require employees to broadly waive their rights under the National Labor Relations Act.

Then, on March 22, the NLRB General Counsel Jennifer Abruzzo issued guidance addressing some of the outstanding questions that employers have been grappling with in the wake of McLaren.

GC Abruzzo issued the Guidance to assist NLRB Regional Directors, Officers-In-Charge, and Resident Officers in addressing McLaren‘s holding. While the GC guidance is not binding or controlling law, it is helpful for understanding how the Regions might prosecute matters post-McLaren, as well as how the Board might enforce the decision. Of course, it remains to be seen how courts will interpret McLaren.

Here’s a summary of the GC Guidance:

  • McLaren applies retroactively. According to the Guidance, agreements proffered to employees prior to the February decision may be subject to challenge.

  • In GC Abruzzo’s view, McLaren could apply to agreements with supervisors. The Guidance restates the established rule that the Act does not protect supervisors unless they oppose conduct prohibited by the Act, so an agreement with a supervisor or higher level employee could include provisions barred by McLaren. This is not new.

    But what is somewhat new, however, is Abruzzo’s opinion that “an employer who proffers a severance agreement to a supervisor in connection with Parker-Robb Chevrolet-related conduct, such as preventing the supervisor from participating in a Board proceeding, could also be unlawful.” Given this position, if a supervisor has opposed conduct that may be prohibited by the Act, such as objecting to an employer requirement that line employees sign broad confidentiality agreements, prudence suggests that any agreement offered to that supervisor should have strong Section 7 carve outs and limited confidentiality and non-disparagement covenants similar to line employee agreements post-McLaren.

  • Severance agreements are not prohibited, even if they prohibit defamatory conduct, so long as they do not have “overly broad provisions that affect the rights of employees to engage with one another to improve their lot as employees.” This is not surprising. Lawful severance agreements may continue to be proffered, maintained and enforced as long as they do not contain overly broad provisions limiting the rights of employees to engage with one another for their mutual benefit relating to terms and conditions of employment.

    Additionally, the Guidance explains that certain kinds of non-disparagement provisions are permissible. Non-disparagement provisions that are “limited to employee statements about the employer that meet the definition of defamation as being maliciously untrue, such that they are made with knowledge of their falsity or with reckless disregard for their truth or falsity” are allowed.

  • A savings clause or disclaimer language won’t necessarily save overly broad provisions, but may help explain the agreement’s restrictions. The Guidance says that though specific savings clause or disclaimer language may be useful to resolve ambiguity over vague terms, such clauses won’t necessarily cure overly broad provisions.

    The Guidance includes a model savings clause that is a detailed and lengthy description of nine specific protected activities. The most conservative approach would be to conform Section 7 carve outs to this “prophylactic statement of rights,” but since the Guidance is not absolute, and companies’ appetite for risk varies, employers should consult with counsel to find the best language and approach for their company.

  • Severability clauses may not be necessary, but we still recommend them. According to the Guidance, the NLRB Regions generally will make decisions based solely on the unlawful provisions and will seek to have individual provisions voided as opposed to entire agreements–regardless of whether the agreements contain a severability clause. Though not required in GC Abruzzo’s view, severability clauses certainly can’t hurt.

  • Interestingly, the Guidance says that employees who want confidentiality or non-disparagement protections in a separation agreement also may not seek or request prohibited confidentiality or non-disparagement provisions. So even if an employee negotiates for broad and mutual confidentiality and non-disparagement language, employers could still violate the law by agreeing to include such language in an agreement.

As shared in our previous post discussing McLaren, your approach will depend on the type of workforce you have, your risk tolerance, and what you are trying to protect. We are standing by, ready to assist, should you need further guidance.

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Special thanks to co-author, Jeff Bauman.

It is common practice for US-based multinational companies to adopt executive severance plans to provide for additional benefits to be paid to executives in the event of certain specified termination events, including those in connection with the change of control of the parent. These benefits may consist of cash payments, favorable treatment of equity awards, and/or other benefits (e.g., payment of health insurance premiums).

These types of plans help companies recruit and retain talent and also provide some certainty around payments which will be made to executives upon termination while securing a release of claims for the company. Multinationals with executives in countries outside the US often desire to cover their non-US executives under the same plan.

In our latest NASPP guest blog post, we explain why it is difficult to extend US executive severance plans to non-US executives and the approaches companies can consider to provide equivalent severance benefits to their non-US executives.

To read more, click here.

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As volatility and uncertainty in the global economy continues, many multinationals are taking (or considering) major changes to their workforce composition. Labor costs are typically the largest cost center for any company, so of course businesses need to understand how best to flex up and down as markets change. At the same time, a company’s greatest assets are its people so changes must be implemented precisely, thoughtfully and artfully.

Without the right strategy and protections in place, layoffs can be detrimental to a company’s inclusion, diversity and equity (ID&E) goals. In this episode of ID&E IMPACT, we discuss the nuances of thinking about how proposed restructuring changes might impact a company’s ID&E goals and offer tips to help guard against unintended discrimination during layoffs. 

Click here to watch the video.

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Special thanks to Jose (Pepe) Larroque, Carlos Martin del Campo and Javiera Medina-Reza.

The Mexico Ministry of Labor and Social Welfare (STPS) has announced that it will carry out an estimated 42,000 inspections in 2023. The inspections carry the possibility of significant fines and penalties issued per violation, per employee. It is imperative for global employers with operations in Mexico to train personnel and response teams on best practices for managing potential inspections and mitigating risk, including maintaining all necessary information and documents that must be supplied during an inspection.

In this Quick Chat video, our Labor & Employment partners in Mexico along with the Managing Partner for Baker McKenzie’s Mexico offices discuss what to expect from an inspection and outline the penalties for noncompliance. They also share insights from the field, discuss the potential defenses and warn against the possible registration cancelation for specialized service providers.

Click here to watch the video.

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The Illinois Supreme Court just handed union employers with broad management rights clauses in their collective bargaining agreements (CBA) a win. On March 23, 2023 the Illinois Supreme Court affirmatively answered a certified question (Does Section 301 of the Labor Management Relations Act preempt BIPA claims asserted by bargaining unit employees covered by a collective bargaining agreement?), and held in Walton v. Roosevelt University that Biometric Information Privacy Act (BIPA) claims brought by employees covered by union contracts with broad management rights clauses are preempted by the Labor Management Relations Act (LMRA). (We recently mentioned the Walton case in our blog, here.) Like many BIPA cases against employers, Walton alleged that former-employer Roosevelt’s collection, use, storage, and disclosure of Walton’s and similarly situated employees’ biometric data violated BIPA.

Section 301 of the LMRA

Section 301 of the LMRA preempts a state law claim, such as a BIPA claim, if resolution of the claim requires the interpretation of a CBA. Claims founded directly on rights created by the CBA as well as claims that substantially depend on analysis of the CBA are preempted, as are claims that are obvious disputes over labor contracts and ones posing as state-law claims that are deemed to actually be claims under a labor contract. In addition, where an employer advances a “nonfrivolous argument” that the conduct the individual employee complains of was authorized by the union in the management-rights clause of the CBA, the claim is deemed to require interpretation of the CBA and, therefore, is preempted.

What the Illinois Supreme Court said

In Walton, the Illinois Supreme Court aligned with federal Seventh Circuit precedent in Miller v. Southwest Airlines, 926 F.3d 898 (7th Cir. 2019) and Fernandez v. Kerry, 14 F.4th 644 (7th Cir. 2021) after finding the Seventh Circuit’s analysis in the cases was not “without logic or reason.” In Miller v. Southwest Airlines, the Seventh Circuit held that the union-represented airline workers’ BIPA claims were preempted by the federal Railway Labor Act, which contains a preemption standard virtually identical to the one in the LMRA. In Fernandez v. Kerry, the Court held that Fernandez’s BIPA claims were preempted by Section 301 of the LMRA since resolution of the claims depended on the interpretation of the CBA between Kerry and the union, requiring an arbitrator to determine whether the employer and the union bargained about the issue or the union consented on the employees’ behalf. In each of these cases, the BIPA claims had to be resolved between the union and the employer.

In Walton, the Court found that when an employer invokes a broad management rights clause from a CBA in response to a BIPA claim brought by bargaining unit employees, there is an arguable claim for preemption. Given that the CBA at issue in Walton contained a broad management rights clause, the Court answered the question in the affirmative and found Walton’s BIPA claims preempted by the LMRA.

Employer Takeaways

  • Union employers in Illinois can breathe a little easier now that the Illinois Supreme Court has followed the Seventh Circuit’s guidance on this issue. Such employers should examine their collective bargaining agreements, including management rights clauses, and other evidence to determine whether Walton can be used to prevent employees from bypassing the grievance process to assert BIPA claims directly, as many claims will be forced to arbitration, keeping them out of court.
  • Employers with unions–or who see employee unions on the horizon–should continue to negotiate the collection of biometric information and / or broad management right clauses in CBAs to guard against liability resulting from direct BIPA claims by CBA-covered employees.

As always, for assistance with your labor and employment related needs, contact your Baker McKenzie attorney.

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The New York City Council is already considering an expansion to the City’s pay transparency law to require NYC employers to include a description of non-salary or non-wage compensation in job postings. Dramatically increasing the burden on employers, the proposed ordinance would require a description of “bonuses, benefits, stocks, bonds, options and equity or ownership, if any.”

Background

As discussed here, New York City’s pay transparency law (Local Law 32 and its amendment), went into effect on November 1, 2022, and requires NYC employers with four or more employees to disclose in job postings – including those for promotion or transfer opportunities – the minimum and maximum salary offered for any position located within New York City. This range may extend from the lowest to the highest salary that the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion, or transfer opportunity.

Update

On February 2, 2023, the Council introduced Int. No. 907, a local law to amend the administrative code of the city of New York, broadening the information that must be disclosed in job postings.

Continue Reading Proposed Expansion of NYC’s Pay Transparency Law Includes Bonuses, Equity Awards and Other “Non-Wage Compensation”
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As layoffs hit the headlines in the post-pandemic world it raises the question as to what is next when it comes to managing work forces. In this episode of TMT Talk, Susan Eandi, Kim Sartin and Jonathan Isaacs discuss key factors of workforce reduction, developing restructuring plans, cost-cutting measures to consider and opportunistic hiring across the US, Europe and Asia Pacific in this unique economic climate.

Please click here for the podcast.

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We are pleased to share with you The Global Employer – Global Immigration & Mobility Quarterly Update, a collection of immigration and mobility alerts from around the world.

Please click here to view.