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Colorado Employers Face New Employment Laws

With Colorado’s return to one-party control, Colorado employers face a spate of new employment laws. Employers in Colorado should review their practices, policies, and procedures to ensure that they are in compliance with these new laws.

Colorado Chance to Compete Act—“Ban the Box” Legislation: Under the new law, an employer may not state in an advertisement or application that a person with a criminal history may not apply to the position. The employer also may not inquire about or require the disclosure of an applicant’s criminal history in an initial application. The law takes effect on September 1, 2019, for employers with 11 or more employees, and September 1, 2021 for employers with fewer than 11 employees.

Equal Pay for Equal Work Act: The law prohibits an employer from discriminating between employees on the basis of sex by paying an employee of one sex a wage rate less than the rate paid to an employee of a different sex for substantially similar work, regardless of job title. The law also prohibits an employer from seeking or relying on a prospective employee’s wage rate history to determine a wage rate. Finally, employers may not prohibit employees from discussing their wage rates. The law takes effect January 1, 2021.

Criminal Penalties for Wage Violations:  Employers who willfully refuse to pay a wage claim or falsely deny the validity of a wage claim over $2,000 may be liable for felony theft. The penalty for theft ranges from $50 to $1,000,000 depending upon the

U.S. Department of Labor Proposes Changes to Minimum Salary for Overtime Exemptions

March 11, 2019

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On March 7, 2019, the United States Department of Labor issued a notice of proposed rulemaking that would change the minimum salary levels necessary for an employee to be properly classified as exempt from the overtime compensation requirements of the Fair Labor Standards Act.  Under the proposed rule, the minimum salary for most exemptions would rise from $455 per week ($23,660 annualized) to $679 per week ($35,308 annualized).  The minimum annual compensation for the “highly compensated employee” exemption would rise from $100,000 to $147,414.

For employees in the executive, administrative and professional exemptions, the proposed rule would permit nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to ten percent (10%) of the required minimum salary.  In addition, provided that the employee has received at least ninety percent (90%) of the required minimum compensation in each payroll week for 52 weeks, the employer would be permitted to make a single “catch-up” payment within one pay period after the end of the 52-week period, in order to bring the employee’s compensation to the required level.

For “highly compensated employees,” the proposed rule would require that ten percent (10%) of the minimum annual compensation be paid in the form of a weekly salary, but the remainder could be paid in the form of nondiscretionary bonuses and incentive payments.  In addition, the rule would also permit a “catch-up” payment as described above.

The proposed rule would formally rescind the Obama-era rule proposed in 2016, which was blocked by permanent injunction before it

States Continue to Revise Non-Compete Laws

Following the “Call to Action”[1] that was issued by the White House and the U.S. Department of Treasury in October, 2016 concerning what the Obama Administration perceived as overuse of non-compete agreements, a number of states have revised their laws regarding non-competes.

In 2016, prior to the “Call to Action,” Idaho passed a law that established a presumption that an employee’s breach of a non-compete agreement caused irreparable harm to the employer.  However, the legislature reconsidered that move.  In July of this year, the Idaho legislature repealed the presumption, placing the burden back on the employer to prove that it suffered harm to a legitimate business interest.

In 2016, Utah imposed numerous requirements and restrictions on non-compete agreements.  Rather than the previous common law requirement that the agreement only restrict a former employee for a reasonable time, the new law voids any agreement that restricts a former employee for longer than one year.  Now, two years later, Utah continues to reassess its non-compete law.  Earlier this year, the state enacted a law prohibiting non-competes for employees working in the broadcasting field and making less than $913 per week or $47,476 per year, aside from a few exceptions.

Massachusetts has also taken action.  Earlier this month, Massachusetts enacted a law bill regulating non-competes, which will go into effect on October 1, 2018. The new law requires that certain criteria be met or the agreement will not be enforced.  The agreement must be in writing, must be signed by both

Supreme Court Strikes Down Union-Shop Provisions in Public Sector, Unlikely to Follow Suit in Private Sector

June 27, 2018

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On June 27, 2018, the U.S. Supreme Court overruled a 41-year-old legal precedent to hold that states may not compel public employees to contribute any money to the labor union that represents them.  In Janus v. AFSCME, Council 31, the Court held that public employees have a First Amendment right not to contribute money to a labor union and that states have no compelling interest sufficient to overcome that free speech right.

The plaintiff in that case was an Illinois state employee represented by the American Federation of State, County and Municipal Employees, Council 31.  He refused to join that union because he opposed many of the positions that the union advocated, including positions that the union took in collective bargaining.  But Illinois, like many states, requires public employees represented by a union to pay an “agency fee” consisting of the portion of union dues (in this case 78%) that the union estimates are directly related to its duties as collective bargaining representative.

The Court held that public sector unions in labor negotiations engage in speech on matters of great public concern and that requiring employees to pay an agency fee to the union is essentially compelling them to support the union’s speech – whether or not they agree with it.  The Court also concluded that a state’s desire for “labor peace” and its concern that public unions might collapse under the weight of “free riders” are not sufficient to justify the violation of the employees’ First Amendment rights.

This

Impending Changes to the Illinois Human Rights Act: What Every Employer Needs to Know

Responding in part to the #MeToo movement, state and local governments have begun expanding protections for those alleging discrimination and harassment in the workplace.  Last month, the Illinois General Assembly passed a series of amendments to the Illinois Human Rights Act (“the IHRA”) that may have a significant impact on employers if they are signed into law by Governor Bruce Rauner.

  • House Bill 4572: Currently, the IHRA applies to employers who employ 15 or more employees within Illinois for at least 20 weeks per year.  HB 4572 would essentially cover all Illinois employers—any employer who employs one or more employee for at least 20 weeks per year.
  • Senate Bill 20: SB 20 makes several changes to the procedures of the Illinois Department of Human Rights (“IDHR”) and the Human Rights Commission (“the Commission”). Among other things, SB 20 would:
    • Extend the charge-filing period from 180 days after an incident giving rise to a claim to 300 days after the incident;
    • Require the IDHR to notify all parties that the complainant may “opt out” of participating in the IDHR process within 60 days and commence a lawsuit in state court;
    • Change the make-up of the Commission from 13 part-time Commissioners to 7 full-time Commissioners, all of whom must either be licensed to practice law in Illinois or have relevant professional experience;
    • Create a temporary panel of 3 Commissioners to handle the backlog of requests for review; and
    • Require the publication of Commission decisions within 180 days.

NLRB Update: Trump Board Wastes No Time Overturning Obama-Era Precedent

December 26, 2017

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With two appointments by President Trump, the National Labor Relations Board (NLRB) had a Republican majority for several months in 2017, for the first time in ten years.  The “Trump Board” wasted no time overturning Obama-era precedents – and has signaled that there is much more to come.

Harder for Employers to be Declared “Joint Employers”

In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 15, 2017), the Board overruled the joint-employer test announced in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015).  In Browning-Ferris, the Obama Board had departed from decades of precedent to declare that two unrelated employers would be deemed “joint employers” for purposes of the National Labor Relations Act (NLRA) if one had reserved the right to exercise direct or indirect control over the employees of the other, even if that control was never actually exercised, and even if the control was only “limited and routine.”  Under the traditional standard, now restored by the Board in Hy-Brand, joint employer status will be found only where the requisite control is actually exercised, is direct and immediate, and is more than merely limited and routine.

Harder for Unions to Justify “Micro-Units”

In PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017), the Board overruled the Obama-era decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), which had permitted labor unions to petition for elections in “micro units” of cherry-picked employees unless the employer could prove that employees excluded from

Temps in Tenth Circuit Face Stricter Scrutiny When Seeking Time Off as Reasonable Accommodation

On July 6, 2017, a three-judge panel of the United States Court of Appeals for the Tenth Circuit reiterated that physical attendance in the workplace is an essential function of most jobs and emphasized this is particularly true for temporary workers filling short-term vacancies.

In Punt v. Kelly Services, the plaintiff, Kristin Punt, was a temporary worker assigned to work for GE Controls Solutions (“GE”) as a receptionist.  The essential functions of that job included being “physically present at the lobby/reception desk during business hours.”  However, during her six weeks in the position, Ms. Punt was absent or tardy on multiple occasions, often due to medical appointments related to a recent diagnosis of breast cancer.  GE terminated her assignment after she informed GE on a Monday morning that she planned to be absent the entire week and would need unspecified additional time off for “some appointments and tests” and “five times of radiation.”

Ms. Punt filed suit under the Americans with Disabilities Act, alleging failure to accommodate a disability.  In the Tenth Circuit, the plaintiff must make a prima facie showing that (1) she is disabled, (2) she is “otherwise qualified,” and (3) she requested a plausibly reasonable accommodation.  The burden of production then shifts to the employer to present evidence either (1) conclusively rebutting one or more elements of the prima facie case, or (2) establishing one of the affirmative defenses, such as undue hardship.  The Tenth Circuit affirmed summary judgment for GE, concluding as a matter of law

Other Perspectives on Trends in Employee Noncompetition Agreements

In mid-May, the New York Times published a long article reporting a national trend that employers are expanding both the number of employees who are required to sign non-competition agreements and the types of employees required to sign these agreements.  The article emphasized stories of low-paid, low-level employees who could not find a new job, or had to take a lower paying job, because they signed a non-competition agreement.  The Times ran an editorial that urged legislatures to prohibit employers from restricting the employment opportunities of lower paid employees.

What is missing from this picture?

While the Times article mentioned states vary in enforcement of non-competition restrictions, noting that California prohibits all restrictions on employees moving to new jobs, it did not explain the important differences in how states other than California enforce non-competition restrictions.  The Times article also did not report the damage to a business that may result from an employee’s taking advantage of trade secrets learned while working for the former employer, or of customer relationships that were entrusted, to compete unfairly with the former employer.

We asked a few of our non-competition attorneys for their perspectives on some of the questions raised by the Times article: Why do companies require lower-level employees to sign non-competition agreements? How typical is it for companies to seek to enforce those agreements for lower-level employees?  How do courts in each state respond to those enforcement efforts?

Arizona

Under Arizona law, restrictive covenants are disfavored and are construed narrowly by

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