Welcome to July! As we head deeper into the summer, the employment law world continues to heat up (and we’re not just talking about the record temperatures across the country!). We have rounded up the most recent developments impacting employers here:

The U.S. Supreme Court closed out an epic 2017 term (pun slightly intended) with the issuance of Epic Systems Corp. v. Lewis, in which it held that contractual waivers of class arbitration in employment agreements are enforceable. Our colleague Gil Samberg also wrote about the decision over on our sister blog, ADR: Advice from the Trenches. The Court also handed down a significant decision in Janus v. AFSCME, holding that public employees who are not union members cannot be required to pay agency fees to a union even if that union represents them for purposes of collective bargaining. Last but certainly not least, Justice Anthony Kennedy announced his retirement from the bench, effective July 31.

At the state level, both New York and Maryland have recently enacted sweeping legislation in response to the #MeToo movement, which we wrote about here and here. New York employers must ensure that their employment agreements are in compliance with the new law by July 11, 2018. On the heels of the New York Paid Family Leave law, which took effect on January 1, 2018, Massachusetts Governor Charlie Baker just signed into law a new paid family and medical leave program that is even more generous than the New York law. That law also increases the state minimum wage and eliminates premium pay for Sundays and certain holidays. We outline the parameters of the new law here.

In New York City, the bill requiring employers to grant two temporary schedule changes per year takes effect on July 18th. Finally, in response to the bevy of leave laws that have recently been passed throughout the country, we will be debuting a new blog series addressing issues arising from and relating to leaves of absence. The series will include posts on navigating the ADA, performance and benefits issues for employees on leave, and the interplay between federal and state-specific leave laws. Stay tuned for more and as always, do not hesitate to contact your Mintz Levin ELB team with any questions about compliance with these laws.

Wishing our readers a happy and restful 4th of July!!

In our sister blog, ADR: Advice from the Trenches, Don Davis explores back-to-back decisions by New York’s intermediate appellate court that applied very narrow state law principles permitting vacatur of an arbitration award on public policy grounds to vacate an arbitrator’s award that had reduced the employer-posed penalty of termination to a brief suspension.  In so doing, the court implicitly endorsed the employer’s decision to terminate an employee that it found, after an investigation, to have engaged in sexual harassment.  The court found that the arbitrator’s reduction of the penalty – despite having made findings of fact that supported the employer’s decision – would have operated to undermine the state’s strong public policy against sexual harassment in the workplace.

With the summer kicking off, it is a good opportunity for employers to review and refresh their employment practices to ensure compliance with developments on the federal, state and legal landscape. This Bubbler Post will review our earlier guidance and (hopefully!) prompt you to review your employment practices:

  • Employment Applications: Equal pay laws have continued to gain traction on the state and local level, and there are a number of jurisdictions banning inquiries into the salary history information of prospective applicants. If you have employees working in the states, counties and/or cities listed below, you should review your application forms and employment documents to ensure that they do not request salary information.
  • Vendor Relationships: Given the pay inquiry laws discussed above, employers should communicate with recruiters and background check companies to ensure that these entities similarly comply with their obligations under applicable law. You can write a letter to your vendors detailing your expectations, you can enter into an amendment to your existing agreement outlining the legal framework, or you can reach out to your vendor contact to discuss the importance of compliance – from both a business and legal perspective – and request that they remove salary history inquiries from their screening process. Whatever you do, be conscious of the potential for joint liability to attach to these claims. Particular provisions to consider are ones regarding compliance with applicable laws and indemnification.

 

  • Employment Agreements: In light of the Supreme Court’s landmark decision holding that employers can enforce class action waivers in arbitration agreements, employers should review and revise their employment agreements to include this language. You can include a class or collective action waiver either by (1) explicitly prohibiting class/collective claims or (2) explicitly requiring that all claims be brought by employees individually and not jointly. Here, we’ve laid out more guidance on this decision’s impact on employers, including factors employers should consider when deciding whether to adopt an arbitration provision with a class waiver and the impact on state law prohibitions on arbitration.

 

  • Employee Trainings: In the wake of the #MeToo movement, workplace professionalism trainings are more relevant than ever. And, in some jurisdictions, they are required. Read more here about the steps New York State and New York City have taken to implement stronger protections against workplace harassment. Employers in other jurisdictions should take note, and perhaps jump on board. While not a complete defense, evidence of thorough and detailed trainings around appropriate workplace conduct can limit liability for an employer defending against a sexual harassment claim. We almost always suggest more training.

 

  • Settlement Agreements: On the federal level, employers should be thoughtful of their obligations under the Tax Cuts and Jobs Act of 2017. Pursuant to a new provision in the tax code overhaul bill – Section 13307 – employers can no longer deduct the taxable income of any sexual harassment settlement amount subject to a non-disclosure agreement. We’ve discussed this here and will continue to track employers’ obligations as additional guidance is issued. In the meantime, employers should tread carefully and make an informed decision about whether to take a tax deduction or include a non-disparagement provision.

In a landmark opinion on an important issue to employers, the Supreme Court held yesterday that employers can enforce class action waivers in arbitration agreements – leaving employers nationwide asking “what does this decision mean for us?”  This post aims to answer that question.

Continue Reading Arbitration Provisions with Class Action Waivers Are Enforceable…Now What? A Guide for Human Resources Professionals and In-House Counsel on the Practical Implications of this “Epic” Decision

As reported by our sister blog, ADR: Advice from the Trenches, the Northern District of Illinois recently issued an unusual decision. After finding that both plaintiffs were bound by arbitration agreements with the defendant and after finding that the plaintiffs’ claims were within the scope of the arbitration clauses, it denied defendant’s motion to compel arbitration. See Zoller v. UBS Secs. LLC, 2018 U.S. Dist. LEXIS 44170 (N.D. Ill. Mar. 9, 2018).

As reported by our sister blog, ADR: Advice from the Trenches, the Sixth Circuit determined that an employer’s notice of its mandatory arbitration policy — without more to secure the employee’s knowing assent to this employment term — is not enough to compel arbitration. While this only applies in the Sixth Circuit (for now), it’s an important development in this area of the law.

Mintz Levin continues to be at the forefront of issues related to contractual arbitration provisions, helping clients optimize their dispute resolution and risk mitigation processes. Check out our sister blog’s latest post, which pieces together a top-10 list of issues in-house counsel should consider when crafting these provisions.  

In a recent series of articles, we asked whether “class arbitration” — meaning the utilization of a Fed. R. Civ. P. 23 class action protocol in an arbitration proceeding — is ultimately viable. Given the nature of arbitration, we suggested that it arguably is not. We noted that the United States Supreme Court and various Courts of Appeal had examined several related procedural questions, but that they had not gotten to the core issues that would ultimately determine the viability of a class arbitration award.

Continue Reading Is “Class Arbitration” an Oxymoron — a Shoe Drops in the Second Circuit

The Supreme Court is set to hear oral argument in October on whether class and collective action waivers are enforceable. While employers await the Supreme Court’s decision, other courts continue to weigh in on the matter.  Just last week, a New York State appellate court in Gold v. New York Life Ins. Co.2017 NY Slip Op 05695 (App. Div. 1st Dep’t, July 18, 2017), found itself aligned with those federal circuit courts of appeal invalidating these waivers.  Given the continuing disagreement among courts across the nation – both federal and state – as to whether the Federal Arbitration Act’s policy favoring arbitration should trump the National Labor Relations Act’s prohibition on contracts that restrict the rights of employees to engage in collective action, the need for clarity from the Supreme Court is more urgent than ever. Employment Matters will of course continue monitoring these important developments, so please check back in for regular updates.