Trade Secrets, Overtime, and Other Priority Developments

It’s been a busy time in the world of employment law. A few recent developments have particular priority for human resources managers and general business lawyers. This post concerns three of those developments: trade secrets, overtime exemptions, and changes to the E.E.O.-1 form.

New Trade Secret Protections and Requirements

One development concerns proprietary and confidential information. A new law offers the first federal protections for trade secrets. It’s an important law. Part of it authorizes the seizure of things that were used in the process of allegedly diverting trade secrets, such as computers and storage media. That’s an important contingency that should be considered when provisioning critical hardware, proprietary software, and network access.

Another part of the law requires the supplementation of all agreements with employees and contractors which addresses confidential information or trade secrets. Those materials must now contain a notice to employees (or reference to a separate, available document) to the effect that trade secrets may be used in a limited fashion to engage in whistleblowing activity or in employment litigation alleging whistleblower retaliation.

In light of the Defend Trade Secrets Act, employee agreements, handbook policies, and other materials which contain provisions on trade secrets should be reviewed and supplemented with appropriate text as soon as possible. (And, of course, this is a good opportunity to be sure that other developments from the past few years are properly implemented, such as Minnesota’s Women’s Economic Security Act and the N.L.R.B.’s application of Section 7 to handbook and other employee policies.)

New Overtime Eligibility Rule, Pay Equity, and the E.E.O.-1

Most employers by now have received multiple announcements of the final rule issued last month by the U.S. Department of Labor concerning the increased salary threshold required to be exempt from overtime. Organizations should review their options on classifying and compensating affected employees. There are several ways to proceed in compliance with the regulation, depending on employer objectives.

Just complying with the new rule, though, could leave an organization vulnerable to adverse assessments in the near future, assuming that the categories of data required for the E.E.O.-1 form expand as planned. Here’s why, and what to do:

All organizations with 100 employees and many smaller organizations must file an E.E.O.-1 annually with the U.S. Equal Employment Opportunity Commission. The form includes information on current employees by job category, ethnicity, and sex. If the current rulemaking proceeds as planned, the form will also include twelve compensation bands. Now hold that thought….

There’s been a resumption in the discussions among some circles about comparable worth analyses. The comparable worth approach seeks to close the gender-based pay gap by comparing compensation by gender within “comparable,” but not “equal,” jobs. Minnesota and California have long required comparable pay assessments in the public sector. Minnesota now also requires comparable pay for private and third sector employers with at least forty employees having government contracts of at least a half-million dollars. There is an increased focus, and in some areas also legislative activity, around employee protections for discussing compensation issues. Add in the increase in data collection, analysis, and dissemination that current technologies and vendors are providing, and it seems likely that there will be an increase in lawsuits attempting to prove sex discrimination through a deep analysis of how employers have arrived at gender disparities in the compensation of comparable, but not equal, jobs. Let’s go back to those E.E.O.-1 changes.

The new form will funnel multiple jobs and job categories into a dozen compensation-based bands for employers (and sufficiently related employer groups) having 100 employees. By doing so, the information will help the government to assess the distribution of jobs by compensation level as well as by the various other attributes entered into the form.

The information should also help employers to smooth out gender- (and other non-job-) based inequities, whether derived from bias, history, or other sources. Smoothing out those arguable inequities would minimize exposure to a range of problems based on a comparable worth analysis, including investor inquiries, government contract compliance, and even discrimination claims, which have generally been unsuccessful but are showing signs of making a comeback. And what might happen if the EEO-1 shows inequities that are not self-remedied? In litigation, the information would likely become available (from the employer, not the government) to plaintiffs challenging job bias.

Now let’s go back to that new F.L.S.A. regulation. Employers should review the overtime classifications of currently exempt workers who make less than the new salary threshold. They could take this opportunity to review, as well, their other employees’ overtime classifications. But any adjustments employers make—e.g., to classification, compensation levels, compensation mechanisms, reporting lines—should anticipate the forthcoming E.E.O.-1 requirements. This is a good time to rationalize classifications and compensation, and to develop a plan to squeeze out any vestige of bias in the way that employees are compensated and assigned. More guidance on ways to implement the new rule will appear in a later post.

A comprehensive approach to these issues also answers one of the common questions raised by the new F.L.S.A. regulation: “How do I communicate the effects of the rule change to my workforce?” Communicating a systematic review of compensation to make the process more transparent and more equitable can increase an employee’s perception of fairness; and research indicates that increased perceptions of fairness result in a decreased litigation risk. (Other elements to communicate in the course of implementing the regulation depend on employer objectives and choices, but the message to employees need not be negative and the effect on employer budgets need not be extreme.) More information on the subject of communication will appear in a later post.

Note that employers are likely to have an obligation to bargain over one or more aspects of compensation adjustments for unionized employees. The scope of the bargaining duty will depend on the specific collective bargaining relationship, including both contract language and past practice.

A careful implementation of the new overtime salary rule could be an affordable opportunity to improve morale, enhance recruiting and retention, minimize bias-related exposure to liability, and promote regulatory compliance. Let us know if we can help.

Workplace Speech: What is Permitted, and What is Prohibited

Employee speech is a complex and developing area. The rules are scattered among otherwise unrelated laws, enforcement guidelines, and employer policies. The reputational, morale, and financial consequences of noncompliance can be significant.

Employers are expected to comply with laws affecting speech in the workplace, but they have few helpful resources. The professional and lay resources that are available tend to focus on single areas such as free speech rights for public employees or protected concerted action in the context of social media. In contrast, the laws governing speech in the workplace derive from many sources, including constitutional and statutory restrictions on a government’s use or disclosure of data; Section 7 of the National Labor Relations Act (N.L.R.A.), which applies to many nonunion as well as unionized workplaces; the Privacy and Security Rules of the Health Insurance Portability and Accountability Act (HIPAA); Title VII (of the Civil Rights Act of 1964); Title IX (of the Education Amendments of 1972); and many other sources.

Assisting employers to navigate these waters, Joe Nierenberg delivered a presentation on the topic to the 2015 Minnesota conference of the Society of Human Resources Managers (MN SHRM). The session addressed the types of employee speech that an employer must allow and the types of speech that an employer can restrict. Attendees learned the general principles that apply, and discussed specific policies that had been ruled lawful or unlawful. The presentation wove together the most common rules on workplace speech, and assessed them under four principles: what speech is prohibited; what speech is permitted; when the allowance or proscription is mandatory; and when the allowance or proscription depends on context. The session objectives included more compliant and confident management of policies, procedures, training, and discipline.

Presentation slides never tell the whole story of a live training program with audience discussion, but here’s the deck that was part of the session. Please note that all rights are reserved to Nierenberg Employment Law; that, because viewing alone is an incomplete experience, the slides alone should not be relied upon as legal advice; and that the slides are current only as of October 13, 2015.

You can view or download the slides here.

If you are interested in training your executives or managers to comply with workplace speech rules, or wish to discuss other available topics, please contact us.

Update stream from publisher Wolters Kluwer

N.L.R.B. on Recent Decisions Regarding Employee Rights Posting

The following text is the entire public announcement by the National Labor Relations Board on April 17, 2012, concerning the requirement that employers post notices of certain federal labor law rights:

“In light of conflicting decisions at the district court level, the D.C. Circuit Court of Appeals has temporarily enjoined the N.L.R.B.’s rule requiring the posting of employee rights, which had been scheduled to take effect on April 30, 2012.

“In view of the D.C. Circuit’s order, and in light of the strong interest in the uniform implementation and administration of agency rules, regional offices will not implement the rule pending the resolution of the issues before the court.

“In March, the D.C. District Court found that the agency had the authority to issue the rule. The NLRB supports that decision, but plans to appeal a separate part that raised questions about enforcement mechanisms. The agency disagrees with and will appeal last week’s decision by the South Carolina District Court, which found the N.L.R.B. lacked authority to promulgate the rule.

“Chairman Mark Gaston Pearce said of the recent decisions, ‘We continue to believe that requiring employers to post this notice is well within the Board’s authority, and that it provides a genuine service to employees who may not otherwise know their rights under our law.'”

New Online Resource Steps through F.M.L.A. Eligibility

The U.S. Department of Labor recently released an updated version of its Family and Medical Leave Act Advisor. The F.M.L.A. Advisor is an online resource that, through an interactive question-and-answer program, helps to clarify which employers are required to provide F.M.L.A. leave and which employees are eligible to take such leave. The resource also provides links and information concerning valid reasons for leave, notice requirements, certification steps, citations to regulations, and other information.

The Advisor may not answer all difficult F.M.L.A. questions, and it does not provide information on how to handle cases that involve not only F.M.L.A. but also the Americans with Disabilities Act or state worker’s compensation law. Nevertheless, it is a helpful first step that, in some cases, may provide all the assistance that a human resources manager needs.

Genetic Discrimination

The subject of this post is not a recent development, but, because many employers remain out of compliance, it is still a timely item. The U.S. Equal Employment Opportunity Commission has revised its “E.E.O. Is The Law” poster to include information about the Genetic Information Nondiscrimination Act of 2008 (“GINA”), which became effective near the end of 2009. The poster also includes information about the Americans with Disabilities Act Amendments Act of 2008 and some updates from the U.S. Department of Labor. To order or print the revised poster or a supplement to go next to your existing (2008) poster, go here. (To review posters on other subjects currently available from the Department of Labor, go here.)

As a reminder–or perhaps a first look–here is how the E.E.O.C. currently interprets the law, which affects employers having fifteen or more employees:

Overview

Under Title II of GINA, it is illegal to discriminate against employees or applicants because of genetic information. Title II of GINA prohibits the use of genetic information in making employment decisions, restricts employers and other entities covered by Title II (employment agencies, labor organizations and joint labor-management training and apprenticeship programs – referred to as “covered entities”) from requesting, requiring or purchasing genetic information, and strictly limits the disclosure of genetic information. The E.E.O.C. enforces Title II of GINA, which addresses genetic discrimination in employment. (The Departments of Labor, Health and Human Services and the Treasury have responsibility for issuing regulations for Title I of GINA, which addresses the use of genetic information in health insurance.)

Definition of “Genetic Information”

Genetic information includes information about an individual’s genetic tests and the genetic tests of an individual’s family members, as well as information about the manifestation of a disease or disorder in an individual’s family members (i.e. family medical history). Family medical history is included in the definition of genetic information because it is often used to determine whether someone has an increased risk of getting a disease, disorder, or condition in the future. Genetic information also includes an individual’s request for, or receipt of, genetic services, or the participation in clinical research that includes genetic services by the individual or a family member of the individual, and the genetic information of a fetus carried by an individual or by a pregnant woman who is a family member of the individual and the genetic information of any embryo legally held by the individual or family member using an assisted reproductive technology.

Discrimination because of Genetic Information

The law forbids discrimination on the basis of genetic information when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training, fringe benefits, or any other term or condition of employment. An employer may never use genetic information to make an employment decision, because genetic information is not relevant to an individual’s current ability to work.

Harassment because of Genetic Information

Under GINA, it is also illegal to harass a person because of his or her genetic information. Harassment can include, for example, making offensive or derogatory remarks about an applicant or employee’s genetic information, or about the genetic information of a relative of the applicant or employee. Although the law doesn’t prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so severe or pervasive that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim’s being fired or demoted). The harasser can be the victim’s supervisor, a supervisor in another area of the workplace, a co-worker, or someone who is not an employee, such as a client or customer.

Retaliation

Under GINA, it is illegal to fire, demote, harass, or otherwise retaliate against an applicant or employee for filing a charge of discrimination, participating in a discrimination proceeding (such as a discrimination investigation or lawsuit), or otherwise opposing discrimination.

Rules against Acquiring Genetic Information

It will usually be unlawful for a covered entity to get genetic information. There are, however, six narrow exceptions to this prohibition:

  • Inadvertent acquisitions of genetic information do not violate GINA, such as in situations where a manager or supervisor overhears someone talking about a family member’s illness.
  • Genetic information (such as family medical history) may be obtained as part of health or genetic services, including wellness programs, offered by the employer on a voluntary basis, if certain specific requirements are met.
  • Family medical history may be acquired as part of the certification process for FMLA leave (or leave under similar state or local laws or pursuant to an employer policy), where an employee is asking for leave to care for a family member with a serious health condition.
  • Genetic information may be acquired through commercially and publicly available documents like newspapers, as long as the employer is not searching those sources with the intent of finding genetic information or accessing sources from which they are likely to acquire genetic information (such as websites and on-line discussion groups that focus on issues such as genetic testing of individuals and genetic discrimination).
  • Genetic information may be acquired through a genetic monitoring program that monitors the biological effects of toxic substances in the workplace where the monitoring is required by law or, under carefully defined conditions, where the program is voluntary.
  • Acquisition of genetic information of employees by employers who engage in DNA testing for law enforcement purposes as a forensic lab or for purposes of human remains identification is permitted, but the genetic information may only be used for analysis of DNA markers for quality control to detect sample contamination.

Confidentiality of Genetic Information

It is also unlawful for a covered entity to disclose genetic information about applicants, employees or members. Covered entities must keep genetic information confidential and in a separate medical file. (Genetic information may be kept in the same file as other medical information in compliance with the Americans with Disabilities Act.) There are limited exceptions to this non-disclosure rule, such as exceptions that provide for the disclosure of relevant genetic information to government officials investigating compliance with Title II of GINA and for disclosures made pursuant to a court order.

As with other workplace laws, employers should review their policies and procedures to ensure that they are current and that the appropriate contact people are knowledgeable about the requirements.

Federal Agency To Require Posting of Employee Labor Rights

The National Labor Relations Board has issued a Final Rule that will require covered employers to notify employees of their rights under the National Labor Relations Act, effective November 14, 2011. 

Private-sector employers (including labor organizations) whose workplaces fall under the National Labor Relations Act will be required to post the employee rights notice where other workplace notices are typically posted. Additionally, employers who customarily post notices to employees regarding personnel rules or policies on an internet or intranet site will be required to post the Board’s notice on those sites. Copies of the notice will be available from the Board’s regional offices may also be downloaded from the NLRB website

The notice, which is similar to one required by the U.S. Department of Labor for federal contractors, states that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, as well as to refrain from any of those activities. It provides examples of unlawful employer and union conduct, and instructs employees how to contact the NLRB with questions or complaints. 

The Board received approximately 6,500 comments during the 60-day comment period following publication of the Proposed Rule in the Federal Register, and accepted an additional 500 that arrived after the deadline. In response to the comments, some parts of the rule were modified. For example, employers will not be required to distribute the notice via email, voice mail, text messaging or related electronic communications even if they customarily communicate with their employees in that manner, and they may post notices in black and white as well as in color. The final rule also clarifies requirements for posting in foreign languages. Similar postings of workplace rights are required under other federal workplace laws. 

Questions about compliance with this or other requirements can be directed to this firm, to the National Labor Relations Board, or to other resources familiar with employment and labor law.

Text credit in part to Nancy Cleeland, Director of N.L.R.B. Office of Public Affairs

New Aid to Employers Paying Health Benefits for Early Retirees

The White House announced Tuesday that it would help pay medical bills for early retirees who have health insurance provided by their former employers. Under the program, the federal government can reimburse employers for 80 percent of the cost of claims from $15,000 to $90,000 a year for a retired worker who is 55 or older and not eligible for Medicare.

The program will run from June 1 of this year to Jan. 1, 2014, when many early retirees will be able to enroll in health plans offered through new state-based markets known as insurance exchanges. John J. Castellani, president of the Business Roundtable, which represents large employers, welcomed the new program, saying it would make health benefits “more affordable for employers and early retirees and their families.” Kathleen Sebelius, the secretary of health and human services, predicted that 4,500 employers — 3,000 private entities and 1,500 state and local governments — would seek federal aid under the program.

Employers can apply through the U.S. Department of Health and Human Services. Applications will be available by the end of June 2010.

The federal aid will be available to private employers, state and local governments, nonprofit and religious organizations and labor unions that sponsor health benefit plans. It will be available to employers who pay premiums to insure early retirees, as well as to employers who assume the risk themselves and pay claims with their own assets. Under the new law, employers must use the federal money to reduce “health benefit costs” for themselves or their retirees — for example, by reducing premiums, deductibles or co-payments. As a condition receiving federal aid, employers must maintain their current contributions to the cost of retiree health benefits. Many companies expected to apply for the new program already receive federal subsidies under a 2003 law to help offset the cost of providing prescription drug benefits to retirees, Ms. Sebelius said.

Edited from the New York Times, May 7, 2010

Preparing for the Flu

The influenza season approaches. This year the several seasonal virus varieties are joined by a new strain that requires planning and preparation. Previously called “swine flu” and now sometimes known as Pandemic H1N1, the new strain combines the familiar symptoms and dangers of influenza with the concerning prospect of mutation into more severe forms that could spread quickly.

Summary

Employers of all sizes in all industries should prepare now for Pandemic H1N1 influenza outbreaks in their communities. Some preparations are common to all grades of potential outbreak, from mild to severe, and require some thought but limited advance planning. Other preparations, more appropriate for a severe outbreak, require advance planning. The time to develop those plans is now.

Prepare for increased absences. Sending sick workers home and keeping them there until they are better will control the spread of the disease and limit operational interruptions. Family-related leave policies should be reviewed and, if necessary, modified in order to accommodate the likely prospect of schools’ dismissing students and child care programs’ closing.

Encourage relevant hygiene. Post notices about covering coughing mouths and sneezing noses. Ensure availability of soap and tissue. Increase the frequency of surface cleaning.

Plan now for steps that will become necessary if an outbreak becomes more severe. Work environments and processes may need modification to increase distances between workers. Health screening that complies with state and federal law may be advisable in some circumstances.

From the Centers for Disease Control:

Actions Employers Should Take Now

* Review or establish a flexible influenza pandemic plan and involve your employees in developing and reviewing your plan;

* Conduct a focused discussion or exercise using your plan, to find out ahead of time whether the plan has gaps or problems that need to be corrected before flu season;

* Have an understanding of your organization’s normal seasonal absenteeism rates and know how to monitor your personnel for any unusual increases in absenteeism through the fall and winter.

* Engage state and local health department to confirm channels of communication and methods for dissemination of local outbreak information;

* Allow sick workers to stay home without fear of losing their jobs;

* Develop other flexible leave policies to allow workers to stay home to care for sick family members or for children if schools dismiss students or child care programs close;

* Share your influenza pandemic plan with employees and explain what human resources policies, workplace and leave flexibilities, and pay and benefits will be available to them;

* Share best practices with other businesses in your communities (especially those in your supply chain), chambers of commerce, and associations to improve community response efforts; and

* Add a “widget” or “button” to your company Web page or employee Web sites so employees can access the latest information on influenza: www.cdc.gov/widgets/ and www.cdc.gov/SocialMedia/Campaigns/H1N1/buttons.html

Important Components of an Influenza Pandemic Plan

* Be prepared to implement multiple measures to protect workers and ensure business continuity. A layered approach will likely work better than using just one measure.

* Identify possible work-related exposure and health risks to your employees. The Occupational Safety and Health Administration (OSHA) has developed tools to determine if your employees are at risk of work-related exposures and, if so, how to respond (see www.osha.gov/dsg/topics/pandemicflu/index.html).

* Review human resources policies to make sure that policies and practices are consistent with public health recommendations and are consistent with existing state and federal workplace laws (for more information on employer responsibilities, employers should visit the Department of Labor’s and the Equal Employment Opportunity Commission’s websites at www.dol.gov and www.eeoc.gov).

* Allow employees to stay home if they are ill, have to care for ill family members, or must watch their children if schools or childcare facilities close.

* Explore whether you can establish policies and practices, such as flexible worksites (e.g., telecommuting) and flexible work hours (e.g., staggered shifts), when possible, to increased the physical distance among employees and between employees and others if local public health authorities recommend the use of social distancing strategies. Ensure that you have the information technology and infrastructure needed to support multiple workers who may be able to work from home.

* Identify essential business functions, essential jobs or roles, and critical elements within your supply chains (e.g., raw materials, suppliers, subcontractor services/products, and logistics) required to maintain business operations. Plan for how your business will operate if there is increasing absenteeism or these supply chains are interrupted.

* Set up authorities, triggers, and procedures for activating and terminating the company’s response plan, altering business operations (e.g., possibly changing or closing operations in affected areas), and transferring business knowledge to key employees. Work closely with your local health officials to identify these triggers.

* Plan to minimize exposure to fellow employees or the public if public health officials call for social distancing.

* Establish a process to communicate information to workers and business partners on your 2009 H1N1 influenza response plans and latest 2009 H1N1 influenza information. Anticipate employee fear, anxiety, rumors, and misinformation, and plan communications accordingly.

Resources

The following bulletins should be distributed to managers with relevant responsibilities:

Federal Minimum Wage Increases

Effective July 24, 2009, the federal minimum wage increases to $7.25 per hour. This is the last increase required by the 2007 Minimum Wage Act.

Employers of covered employees must post a notice that describes, among other things, employees’ minimum wage rights. A link for posters is available below, under “Resources.” Note that the U.S. Department of Labor is likely to revise the currently available posters.

Minnesota employers who are not covered by the federal Fair Labor Standards Act’s minimum wage provisions are likely to be covered by the state’s wage and hour laws. Minnesota’s minimum wage remains unchanged, at $5.25 per hour for employers grossing less than $625,000 and $6.15 per hour for employers at or above that level. More information on Minnesota’s minimum wages, including some exemptions, information on the training wage, and discussion of the fact that there is no tip credit allowed in Minnesota, is provided in the official notice available below, under “Resources.”

Whether a particular classification of employee is covered by the federal minimum wage law is an analysis that is beyond the scope of this brief article. The answer depends in part on the nature of the employer’s enterprise and in part on the specific duties of the employee. If you have questions about coverage, you might contact any of the following: the Wage and Hour Division of the Employment Standards Administration of the U.S. Department of Labor; your employment law advisor; or this firm.

Resources:

  1. Federal minimum wage and other wage-and-hour posters
  2. Frequently asked questions about federal employment posters
  3. Compliance assistance with federal wage-and-hour issues
  4. Minnesota employment posters
  5. Information on Minnesota minimum wage law
Please read the Terms of use and legal notices for this blog.

Archives