Businesses are constantly challenged by the ever-evolving landscape of labor and employment law, with new legislation and judicial developments occurring almost daily fueling a seemingly never-ending stream of litigation. For companies operating in multiple states, complying with this patchwork of federal, state, and local laws and developments can be daunting. Knowing these issues are a top concern for management and in-house counsel, Morrison Foerster keeps pace with this rapidly evolving landscape. MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues covering key judicial, litigation and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Co-Chair, Global Employment and Labor Practice

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Andrew Turnbull represents companies on a broad range of labor and employment litigation and counseling matters. He has successfully defended clients in complex employment litigation before federal and state courts and administrative agencies. A primary focus of his practice involves helping companies navigate the unique employment issues that arise when doing business with the federal government, including advising on all aspects of OFCCP compliance, creating and implementing affirmative action plans, defending OFCCP audits and onsite investigations, conducting mock pay equity audits, drafting and developing business ethics policies and programs, and complying with the Service Contract Act, E-Verify, and the Drug Free Workplace Act.

Andrew Turnbull

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MoFo ELC equips our clients with the most up-to-date and relevant information on employment and labor law issues, covering key judicial, litigation, and legislative developments, their implications for employers, and strategies to ensure compliance and avoid lawsuits. To learn more about our capabilities, please visit the <a href="https://www.mofo.com/capabilities/employment-labor" target="_blank">Employment + Labor</a> practice page and read about our <a href="https://www.mofo.com/people?practices=Employment%20%2B%20Labor" target="_blank">Team</a>.

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DOJ Creates Initiative to Pursue Aggressive False Claims Act Enforcement Against DEI Programs and Civil Rights Violations

Fourth Circuit Stays Injunction of Trump DEI Executive Orders

President Trump Rescinds Affirmative Action for Federal Contractors and Requires Enforcement Plan to End Unlawful DEI at Private Companies

FAR Council Withdraws “Pay Equity and Transparency” Proposed Rule

The “Preventative Duty”: New Law Places Active Duty on Employers in the UK to Prevent Sexual Harassment in the Workplace

On September 22, 2020, President Trump signed an Executive Order on Combatting Race and Sex Stereotyping (the “EO”), prohibiting federal contractors and certain federal grant recipients from holding diversity and EEO training for their workforce that includes “divisive concepts,” such as training employees that the U.S. or an individual is “inherently racist, sexist, or oppressive, whether consciously or unconsciously.”  The EO follows a September 4, 2020 White House memorandum criticizing federal agencies for having “divisive, un-American” training sessions on “white privilege” and “critical race theory” and demanding that they end racial sensitivity trainings.  The EO also comes at a time when many contractors have been increasing their diversity and anti-bias trainings in response to racial and social justice issues brought to the forefront over the last several months.While the precise parameters of the types of training prohibited by the EO are not clear, contractors should review their diversity and anti-bias training initiatives in light of these new requirements.  If implemented, the EO requirements will be included in federal prime contracts entered on or after November 21, 2020, and will require prime contractors to flow the requirements down their subcontractors and vendors.Read more on <a target="_blank" href="https://govcon.mofo.com/labor-employment/president-trump-issues-executive-order-banning-federal-contractors-from-race-and-sex-stereotyping-training/">MoFo's Government Contracts Insights Blog</a>.

Andrew co-chairs the firm’s Global Employment and Labor Group. He represents companies on a broad range of labor and employment litigation and counseling matters, successfully defending clients in number complex matters before federal and state courts and administrative agencies.

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Locke Bell is a partner in the firm’s Government Contracts & Public Procurement practice.

Locke Bell

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President Trump Issues Executive Order Banning Federal Contractors from Race and Sex Stereotyping Training

In a Long-Anticipated Move, the Trump Administration Revokes Executive Order 13495, Giving Service Contractors More Flexibility when Hiring Predecessor Contractor Employees 

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On September 22, 2020, President Trump signed an Executive Order on Combatting Race and Sex Stereotyping (the “EO”), prohibiting federal contractors and certain

President Trump Issues Executive Order Banning Federal Contractors from Race and Sex Stereotyping Training

Government contractors may soon be required to certify annually that they have affirmative action programs (“AAP”) in place for their U.S. workforce. On September 14, 2020, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a <a href="https://www.govinfo.gov/content/pkg/FR-2020-09-14/pdf/2020-20105.pdf" target="_blank" rel="noopener noreferrer">notice</a> seeking comments for its proposal to the Office of Management and Budget (“OMB”) for approval of: (1) an annual AAP online certification process for federal contractors; and (2) a secure method for federal contractors to submit AAPs electronically when they are scheduled for a compliance evaluation.Read more on <a target="_blank" href="https://govcon.mofo.com/labor-employment/ofccp-seeks-comments-on-annual-aap-certification-proposal/">MoFo's Government Contracts Insights Blog</a>.Morrison & Foerster associate Victoria Dalcourt Angle contributed to the writing of this post.

Associate

Tori Dalcourt Angle is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.
Tori advises clients on various government contract matters, including both pre

Victoria Dalcourt Angle

Victoria Angle

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OFCCP Seeks Comments on Annual AAP Certification Proposal

OFCCP Seeks Comments on Annual AAP Certification Proposal

Government contractors may soon be required to certify annually that they have affirmative action programs (“AAP”) in place for their U.S. workforce. On Septemb

On September 11, 2020, the Office of Federal Contract Compliance Programs (OFCCP) released <a href="https://www.dol.gov/agencies/ofccp/foia/library#Q1" target="_blank">a list of nearly 900 federal supply and service contractors and subcontractors</a> that it will be sending Corporate Scheduling Announcement Letters (CSALs) to for potential audits of over 2,200 contractor establishments. For the first time, the CSAL list includes audits focusing on contractors’ promotion practices and accommodations of individuals with disabilities. The list reveals that OFCCP will be sending CSALs for various types of compliance reviews, including:<ul><li>402 Establishment Compliance Reviews;</li><li>31 FAAP Reviews;</li><li>67 Corporate Management Compliance Evaluations;</li><li>500 Compliance Checks;</li><li>500 Accommodation Focused Reviews;</li><li>500 Promotion Focused Reviews; and</li><li>250 Section 503 Focused Reviews.</li></ul><h4>Proactive Steps If Your Company Is On the CSAL List</h4><ul><li>Timeline for Potential Audit: OFCCP sends CSALs to service and supply contractors as a courtesy to let them know that one or more of their establishments may be scheduled for an OFCCP audit. CSALs provide contractors with at least 45-days advance notice to prepare for the compliance review. Although receipt of a CSAL does not necessarily mean that a contractor’s establishment has been selected for an audit, contractors receiving CSALs are typically scheduled for an OFCCP audit.</li><li>Notify Relevant Staff to Watch for CSALs: CSALs are typically sent to the HR Director (or designated point of contact) at the establishment on OFCCP’s CSAL list. As these individuals are not always responsible for the contractor’s affirmative action compliance (or even aware of the contractor’s affirmative action obligations), contractors should notify HR personnel and other designated points of contact at their establishments to keep a lookout for those notices in the next few weeks.</li><li>Prepare for Audit upon Receipt of CSAL: Contractors that receive CSALs should take advantage of the advance notice by immediately reviewing their affirmative action practices in preparation for a potential audit. Investing ample time up front to have a good initial submission can potentially save significant costs in defending an audit and avoid unnecessary adverse findings. The review should generally begin with determining which type of compliance review will be conducted (i.e., establishment review, compliance check, accommodation focused review, etc.) and then using the <a target="_blank" href="https://www.dol.gov/agencies/ofccp/compliance-checks/scheduling-list">applicable OFCCP scheduling letter</a> as a guide for preparing the initial submission, should the contractor be selected for an audit. In addition, if the review requires submission of the contractor’s affirmative action plan (AAP), the contractor should ensure its AAP is completely compliant and ready for review. Contractors should also review other compliance areas, including their outreach and recruitment efforts, compliance with notice posting and job listing requirements, and accommodation practices.</li><li>Pay Close Attention to Areas Showing Adverse Impact: OFCCP has been very effective at pursuing and settling systemic discrimination cases in the last few years. In many instances, the best defense to these claims is having a good offense. If a contractor has potential indicators of discrimination for hiring, promotions, terminations, or compensation, it should immediately analyze those areas, under the attorney-client privilege, to ensure that the data and similarly situated employee groupings (SSEGs) underlying those indicators are accurate or that the contractor has legitimate explanations for those indicators.</li><li>Do Not Expect Extensions for Responding to the Scheduling Letter: Contractors have 30 days from the date they receive a scheduling letter to provide OFCCP the items requested in the itemized listing attached to the scheduling letter, which usually includes a request for a copy of the contractors’ AAP for the establishment under review. Under the current administration, unless there are extraordinary circumstances, OFCCP usually will provide a one-time extension of the 30-day period for data supporting the AAP only if: (1) the contractor requests the extension before the 30-day period expires; and (2) the contractor timely submits its AAP narrative (non-data portion) within the 30-day period of receiving the scheduling letter.</li><li>No CSAL Does Not Mean No Audit: Contractors should not assume they are safe merely because they have not received a CSAL. OFCCP is not required to send CSALs. A contractor may be scheduled for a compliance review even if it did not receive a CSAL. It is also possible for a contractor to be scheduled for a compliance review at a location that did not receive a CSAL. </li></ul>Andrew Turnbull routinely assists contractors with preparing for and defending OFCCP audits. If you have any questions about this alert, he can be reached at <a href="mailto:aturnbull@mofo.com">aturnbull@mofo.com</a>.

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OFCCP Issues New List of Advance Audit Notices

On September 11, 2020, the Office of Federal Contract Compliance Programs (OFCCP) released a list of nearly 900 federal supply and service contractors and subco

OFCCP Issues New List of Advance Audit Notices

On July 27, 2020, Senate Republicans introduced the HEALS Act, its response to the Democrat-backed stimulus bill, the HEROES Act. Although the HEALS Act is currently on life support in light of the stalemate in negotiations over the competing bills, employers should nonetheless take notice of one lesser publicized piece of the Senate’s proposed stimulus package: the SAFE TO WORK Act (the “Act”). The Act would create a liability shield (with retroactive effect) for employers and others “to discourage insubstantial lawsuits relating to COVID-19 while preserving the ability of individuals and businesses that have suffered real injury to obtain complete relief.”Read our <a target="_blank" href="https://www.mofo.com/resources/insights/200811-safe-to-work-act.html">client alert.</a>

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The SAFE TO WORK Act: An In-Depth Guide for Employers to the Senate's Proposed Coronavirus Liability Shield

Virginia Becomes the First State to Adopt COVID-19 Workplace Safety Mandates

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On July 27, 2020, Senate Republicans introduced the HEALS Act, its response to the Democrat-backed stimulus bill, the HEROES Act. Although the HEALS Act is curr

The SAFE TO WORK Act: An In-Depth Guide for Employers to the Senate's Proposed Coronavirus Liability Shield

This week, on August 3, 2020, the California Supreme Court issued its opinion in Ixchel Pharma, LLC v. Biogen, Inc., which resolved two questions regarding the standards to be applied for non-competition agreements and disputes between businesses in California. The first was whether a plaintiff in a dispute between businesses is required to plead an independently wrongful act in order to establish a claim for tortious interference with a contract that is terminable at-will, to which the court responded, yes. The second question, was what is the proper standard for determining whether California Business and Professions Code section 16600 (Section 16600) voids a non-competition agreement between two businesses, to which the court responded, the Rule of Reason.Read the <a href="https://www.mofo.com/resources/insights/200807-california-supreme-court.html" target="_blank">full client alert</a>.

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Eric Akira Tate co-chairs the firm’s Global Employment and Labor Group. He represents technology and other companies in bet-the-company trade secrets and employee mobility cases.

Eric Akira Tate

Eric Tate chairs the firm’s Global Employment and Labor Group. He has represented technology and other companies in the biggest and most highly-publicized trade secrets and employee mobility cases across multiple industries. Eric also represents companies in whistleblower, wage and hour, and other employment litigation.

Eric Tate

California Supreme Court Clarifies Standards for B2B Non-Competition Agreements and Disputes in California

This week, on August 3, 2020, the California Supreme Court issued its opinion in Ixchel Pharma, LLC v. Biogen, Inc., which resolved two questions regarding the 

California Supreme Court Clarifies Standards for B2B Non-Competition Agreements and Disputes in California

On August 3, 2020, President Trump signed an Executive Order aimed at limiting the use of foreign workers on federal contracts and subcontracts. The issuance of the Executive Order comes on the heels of the Tennessee Valley Authority, a federally owned utility, announcing plans to outsource 20% of its technology jobs overseas.Read more on <a href="https://govcon.mofo.com/labor-employment/executive-order-seeks-to-limit-the-use-of-foreign-workers-on-federal-contracts/" target="_blank">MoFo's Government Contracts Insights Blog</a>.Morrison & Foerster associate Victoria Dalcourt Angle contributed to the writing of this post.

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Executive Order Seeks to Limit the Use of Foreign Workers on Federal Contracts

On August 3, 2020, President Trump signed an Executive Order aimed at limiting the use of foreign workers on federal contracts and subcontracts. The issuance of

Executive Order Seeks to Limit the Use of Foreign Workers on Federal Contracts

On July 15, 2020, the Virginia Department of Labor and Industry (DOLI) Safety and Health Codes Board voted 9-2 to approve the nation’s first emergency workplace regulation related to COVID-19. The new regulation was issued in response to Virginia Governor Ralph Northam’s directive in May 2020 to address workplace safety issues in Virginia given the lack of response from the federal Occupational Health and Safety Administration (OSHA). While the final text of the regulation has yet to be issued, the regulation will require Virginia employers to implement various policies and procedures to reduce the spread of COVID-19 in the workplace. <h3>Background</h3>Virginia has established the Virginia Occupational Safety and Health (VOSH) to oversee workplace and safety compliance. While VOSH’s regulations mostly follow OSHA standards, VOSH can establish additional workplace safety standards beyond OSHA’s requirements. Since the outbreak of the COVID-19 pandemic in the United States, many state officials and employee advocacy groups have been waiting for OSHA to take an active role in protecting workers from the spread of the virus. While OSHA issued guidance for employers on safety standards related to COVID-19, the guidance is non-binding. Multiple parties, from lawmakers to workers’ advocate organizations, have attempted to get OSHA to issue an emergency standard related to COVID-19, but OSHA has thus far declined to do so.In May 2020, Governor Northam issued an executive order calling for increased workplace safety standards for COVID-19, given the lack of federal guidelines. Governor Northam is not alone in his frustration. Oregon OSHA, for example, is expected to issue a similar regulation shortly, following that state’s Governor Kate Brown issuing numerous executive orders, including the expansion of mandatory face coverings, intended to slow the spread of COVID-19. The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) continues to urge OSHA to create an emergency workplace standard for COVID-19, and it is currently appealing the U.S. Court of Appeals for the D.C. Circuit’s rejection of the AFL‑CIO’s request for an order mandating OSHA create such a standard.<h3>Effective Date and Coverage</h3>The new regulation will become effective once it has been published in a Richmond, Virginia general circulation newspaper, which is expected to happen during the week of July 27, 2020. DOLI states that the regulation is still being finalized and that training and outreach resources for employers will be provided. It is anticipated to be in effect for six months from its effective date, unless the Safety and Health Codes Board extends the regulation or repeals it earlier. Most private and public employers in Virginia will have to comply with the regulation.<h3>New Requirements</h3>The regulation will require employers to assess whether their workplace is at “very high,” “high,” “medium,” or “lower” risk for exposure to COVID-19. The regulation provides various factors for employers to consider in assessing the risk level within their workplace, including whether the work environment is outdoors or indoors, the type of tasks being undertaken, and whether there are shared spaces for employees to use. Employers that determine their workplace presents hazards or job tasks at the “very high,” “high,” or “medium” risk levels must:<ul><li>Provide COVID-19 related trainings to their employees within 30 days of the effective date of the regulation; and</li><li>Implement a written Infectious Disease Preparedness and Response Plan within 60 days of the effective date of the regulation.</li></ul>Employers that determine their workplaces are at the “low” risk level are not required to develop the response plan or provide training, but they will be required to inform their employees in writing about hazards/characteristics of COVID-19 and measures to minimize exposure. VOSH plans to develop a written information sheet for employers to use to comply with the notification requirement.Regardless of risk level, the new regulations will require all employers to take various actions to mitigate the risk of exposure of COVID-19 in their workplaces, including: <ul><li>Encourage employees to self-monitor for COVID-19 symptoms;</li><li>Develop and implement policies and procedures for employees to report when they are experiencing symptoms consistent with COVID-19; </li><li>Bar from the workplace employees or other persons, including customers and visitors, who have known or suspected COVID-19 cases until cleared to return to work, although employees can still telework during that period;</li><li>Discuss with subcontractors, temporary placement agencies, and staffing firms that service the employer the importance of having their workers who are known or suspected to have COVID-19 cases to stay home and not report to work until cleared to return;</li><li>In accordance with law (including HIPAA and the ADA), develop and implement policies and procedures for employees to report when they have a suspected or confirmed COVID‑19 case;  </li><li>Within 24 hours of discovering a confirmed COVID-19 case in the workplace, inform: (a) employees and other employers’ employees who may have been exposed of their possible exposure; (b) the building owner; and (c) VOSH, while maintaining confidentiality of the infected employee in accordance with the ADA and other applicable law;</li><li>Notify VOSH if three or more persons present at the workplace test positive within a two-week period;</li><li>Develop and implement policies about return to work for known or suspected cases of COVID-19 using either a symptom‑based or test‑based strategy;</li><li>Develop policies and procedures to ensure employees observe physical distancing on the job and at paid breaks on employer’s property, including using announcements and signs to promote distancing and taking actions to decrease congregation of personnel within the workplace;  </li><li>Comply with respiratory and personal protective equipment standards applicable to the employer’s industry if social distancing is not possible and allow for reasonable accommodations for medical conditions;</li><li>Close or control access to common work areas, such as breakrooms and cafeterias;</li><li>Implement various sanitation measures for commonly used areas; and</li><li>Provide flexible sick leave, telework, and staggered shifts when feasible.</li></ul>Employers that comply with Center for Disease Control guidelines that provide the same or equal protection as the regulation will be considered compliant. <h3>Enforcement/Penalties</h3>VOSH will be responsible for the enforcement of the new regulation. Employers that violate these new mandates can face fines of up to $130,000 for willful or repeated violations, with smaller fines for lesser violations. VOSH will also consider good‑faith efforts to comply with the regulations and CDC guidance when determining whether an employer is in compliance.The regulation also prohibits employers from retaliating against employees who raise reasonable concerns about COVID-19 infection risks in the workplace, whether that concern is raised with the employer, co-workers, government agencies, or the media, including through social media. While the current version of the regulation does not provide employees with a private right of action for retaliation or violations of the regulation, as of July 1, 2020, Virginia’s whistleblower protection law provides a private right of action for retaliating against employees for reporting any violation of federal or state law. <h3>Practical Implications</h3>In light of this new regulation, Virginia employers may want to reassess whether remote work is possible. If an option exists for most or all employees to telework, employers may want to allow for such telework while this rule is in effect. Even if full telework is not possible, staggered shifts or days could also mitigate some of the compliance and logistical challenges created by the new rule.Where having staff onsite is necessary for the business, employers should review their current COVID-19-related practices and procedures to ensure that they comply with the new regulation for any employees reporting to the workplace. Employers that determine their workplace is at the higher risk levels of exposure will need to consider putting more extensive mitigation efforts in place.Given the inaction at the federal level, more states are likely to follow Virginia’s lead. A number of other states have their own OSHA plans, including California, Maryland, Oregon, and Washington. Interestingly, OSHA retains the right to revoke state plans and require that only federal standards be applied. Whether it will do so if more states enact regulations similar to Virginia remains to be seen. Morrison & Foerster summer associate Marcus Kennedy-Grimes contributed to the writing of this post.

Virginia Becomes the First State to Adopt COVID-19 Workplace Safety Mandates

On July 15, 2020, the Virginia Department of Labor and Industry (DOLI) Safety and Health Codes Board voted 9-2 to approve the nation’s first emergency workplace

In the midst of Pride month, the Supreme Court of the United States has issued a landmark civil rights decision, holding that Title VII prohibits employers from discriminating on the basis of sexual orientation and gender identity. Writing for a six-Justice majority in Bostock v. Clayton County, Justice Neil Gorsuch explained that an employer who fires an individual for being gay or transgender “fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.”[1] The Court’s opinion resolves inconsistent interpretations of Title VII in courts across the country. And the Court’s reading of Title VII provides anti-discrimination protection to many LGBT workers in states and cities that had not yet promulgated such protections.<h3>Background</h3>Until recently, courts had unanimously read “because of … sex” in Title VII as not prohibiting discrimination on the basis of sexual orientation and gender identity. Although many states and local governments have expanded their anti-discrimination laws to extend workplace protections to sexual orientation and gender identity, many have not. LGBT employees in those jurisdictions have been stuck in a reality where, as one court put it, an employee could theoretically “be married on Saturday and then fired on Monday for just that act.”[2]Despite several U.S. Supreme Court decisions laying the groundwork for extending Title VII’s protections to LGBT employees, the Supreme Court had not previously addressed whether the federal statute covered sexual orientation or gender identity. In the absence of Supreme Court guidance, a split resulted in the federal circuits, with several courts of appeals recognizing that Title VII’s prohibition against “sex” discrimination prohibited discrimination on the basis of sexual orientation and gender identity, while others continued to hold it did not. To resolve this circuit conflict, the Supreme Court granted review in three cases. The first, Bostock v. Clayton County, involved a man who was fired for being gay after his employer, the Child Welfare Services Coordinator for the Clayton County Juvenile Court System in Georgia, found out about his participation in a gay recreational softball league.[3] The second, R.G. & G.R. Harris Funeral Homes, Inc. v. E.E.O.C., involved a funeral home worker who presented as a male when hired but was fired six years later when she announced her intention to live as a woman.[4] The third, Altitude Express, Inc. v. Zarda, involved a skydiving instructor who, after several seasons with his employer, was fired within days of revealing that he was gay.[5]<h3>The Court's Decision</h3>Writing for the Court, Justice Gorsuch (joined by Chief Justice John Roberts and Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan) assumed, as the employers argued, that the word “sex” in Title VII referred to the biological distinctions between male and female. But that, the Court said, was “just a starting point”: “The question isn’t just what ‘sex’ meant, but what Title VII says about it.”[6] Title VII prohibits an employer from firing an individual based in part on the employee’s sex. And, the Court reasoned, “it is impossible” to discriminate against a person for being gay or transgender without taking the employee’s sex into account.[7] The Court thus concluded that an employer that discriminates against an employee for being gay or transgender “inescapably intends to rely on sex in its decision-making.”[8]Justice Gorsuch offered several examples to illustrate how decisions based on those characteristics were inextricably tied to sex. In one, he imagined an employer with a policy of firing any employee known to be gay. If an employee comes to an office party with their wife, whether they will be fired hinges entirely on the sex of the employee. So, explained Justice Gorsuch, even if the employer’s “ultimate goal” was to discriminate on the basis of sexual orientation, it must, “along the way, intentionally treat an employee worse based in part on that individual’s sex.”[9]That was so, the Court held, even if the employer (or the employee) would describe the termination as being based on sexual orientation or transgender status. The Court explained that liability under Title VII does not turn on how one might label an employer’s action. Pointing to its past decisions, the Court noted that an employer’s rule requiring women to pay more into a pension fund than men could not be saved by calling it a “life expectancy” adjustment, nor could a policy against hiring mothers (but not fathers) of young children be defended as one based on “motherhood.”[10]The Court also held that sex need not be the sole or primary cause of the adverse employment action. Whether another factor is at play—even if it played a more important role—has no significance to the question of whether Title VII liability attaches.Finally, the Court rejected the notion that an employer could escape liability by treating all male and female gay and transgender employees equally. Because Title VII prohibits treating an “individual” differently because of their sex, Justice Gorsuch explained that an employer that fires both a man and a woman for being gay or transgender “doubles rather than eliminates Title VII liability.”[11]Justice Samuel Alito (joined by Justice Clarence Thomas) and Justice Brett Kavanaugh filed separate dissents. Both dissents accused the Court of legislating, reading into Title VII protections not included in the text as understood when passed in 1964. Although Justice Gorsuch, writing for the Court, acknowledged that the drafters of Title VII likely did not anticipate the Court’s result, the broad language they chose—“because of … sex”—required it: “When the express terms of a statute give us one answer and extratextual considerations suggest another,” he wrote, “it’s no contest. Only the written word is the law, and all persons are entitled to its benefit.”[12]<h3>Practical Implications</h3>Under the Court’s decision, that benefit is now available to nearly all LGBT employees in the United States.[13] The decision brings federal law in line with the numerous states and localities that already protect sexual orientation and gender identity. Most of these laws cover small employers that are not subject to Title VII. Many companies already have policies and practices prohibiting discrimination against LGBT individuals; indeed, hundreds of companies joined amicus briefs in the Supreme Court supporting the employees’ position. But employers should continue to review their policies and practices to ensure against discrimination on the basis of sexual orientation and gender identity.The Court’s decision left open several issues. The Court did not address how doctrines protecting religious liberty might interact with Title VII’s protections. Nor did it decide whether employer sex-specific restroom or changing facility policies would violate that law. Both questions were for future cases. The meaning of other federal statutes that prohibit discrimination because of sex likewise remains unresolved. Justice Alito’s dissent predicted that the Court’s decision is “virtually certain to have far-reaching consequences.”[14] He attached an appendix listing dozens of laws that may be affected, including Title IX, the Fair Housing Act, and the Equal Credit Opportunity Act. Companies with activities potentially affected by these open questions should review their practices with an eye on whether changes are warranted in light of the Court’s decision. <a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref1">[1]</a> Bostock v. Clayton County, Georgia¸ 590 U.S. ___, slip op. at 2 (2020).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref2">[2]</a> Hively v. Ivy Tech Community College, 853 F.3d 339, 342 (7th Cir. 2017).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref3">[3]</a> Bostock v. Clayton Cnty, 2017 WL 4456898 (N.D. Ga. 2017); affirmed Bostock v. Clayton Cnty. Bd. of Commissioners, 723 <a href="https://en.wikipedia.org/wiki/F._App%27x" title="F. App'x">F. App'x</a> 964 (<a href="https://en.wikipedia.org/wiki/11th_Cir.">11th Cir.</a> 2018).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref4">[4]</a> Equal Employment Opportunity Comm'n v. R.G. & G.R. Harris Funeral Homes Inc., 100 <a href="https://en.wikipedia.org/wiki/F._Supp._3d" title="F. Supp. 3d">F. Supp. 3d</a> <a href="https://www.leagle.com/decision/infdco20150424e00">594</a> (<a href="https://en.wikipedia.org/wiki/E.D._Mich." title="E.D. Mich.">E.D. Mich.</a> 2015); summary judgment granted, 201 F. Supp. 3d <a href="https://www.leagle.com/decision/infdco20160819951">837</a> (E.D. Mich. 2016); reversed, 884 F.3d <a href="https://www.leagle.com/decision/infco20180307120">560</a> (<a href="https://en.wikipedia.org/wiki/6th_Cir." title="6th Cir.">6th Cir.</a> 2018).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref5">[5]</a> Zarda v. Altitude Express, Inc., No. 2:10-cv-04334 (<a href="https://en.wikipedia.org/wiki/E.D.N.Y." title="E.D.N.Y.">E.D.N.Y.</a> 2014); affirmed, 855 <a href="https://en.wikipedia.org/wiki/F.3d" title="F.3d">F.3d</a> <a href="https://www.leagle.com/decision/infco20170418090">76</a> (<a href="https://en.wikipedia.org/wiki/2d_Cir." title="2d Cir.">2d Cir.</a> 2017); reversed on rehearing <a href="https://en.wikipedia.org/wiki/En_banc" title="En banc">en banc</a>, 883 <a href="https://en.wikipedia.org/wiki/F.3d" title="F.3d">F.3d</a> <a href="https://www.leagle.com/decision/infco20180226048">100</a> (2d Cir. 2018).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref6">[6]</a> Bostock at slip op. at 5 (2020).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref7">[7]</a> Id. at 9.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref8">[8]</a> Id. at 11.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref9">[9]</a> Id. at slip op. at 11.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref10">[10]</a> Id. at slip op. at 14.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref11">[11]</a> Id. at slip op. at 12.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref12">[12]</a> Id. at slip op. at 2.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref13">[13]</a> 42 U.S. Code § 2000e(b). Note: “Title VII covers employers with 15 or more employees.”<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/Bostock%20final.DOCX#_ftnref14">[14]</a> Bostock at slip op. at 44 (Alito, J., dissenting).

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Protecting Pride: Supreme Court Holds Title VII Prohibits Workplace Discrimination on the Basis of Sexual Orientation and Gender Identity

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In the midst of Pride month, the Supreme Court of the United States has issued a landmark civil rights decision, holding that Title VII prohibits employers from

Protecting Pride: Supreme Court Holds Title VII Prohibits Workplace Discrimination on the Basis of Sexual Orientation and Gender Identity

While the United States and California legal worlds remain (understandably) focused on issues arising out of the COVID-19 global pandemic, California courts continue to issue important, and potentially policy-altering, rulings in cases affecting employment law. One such case, McPherson v. EF Intercultural Foundation, Inc.,[1] finds the California Court of Appeal opining for the first time on the intersection of the growing trend of California employers offering at least their exempt employees “unlimited” vacation time (meaning employees do not accrue or vest in a set number of hours) and California Labor Code Section 227.3, which provides that employees must be paid out for any accrued but unused vacation time at the termination of employment. While McPherson does not purport to outlaw the practice of offering unlimited vacation, it does put in place some significant potential restrictions on such policies, ones which employers that have or are contemplating unlimited vacation policies should be aware of. McPherson also contains an important reminder regarding releases of employment-related claims and the statutes of limitations. We note that the defendant in McPherson has now filed a petition for review of the case with the California Supreme Court which, if granted, would render the case non-binding and non-precedential, but still citable for its persuasive value only pending review.<h3>What Does McPherson Say About Unlimited Vacation?</h3>In McPherson, three former employees sued EF Intercultural Foundation (“EF”) seeking payment for accrued but unused vacation they alleged EF failed to pay at the time of each plaintiff's termination of employment.[2] EF argued that while it had a written accrual-based vacation policy for most of its employees, the policy applicable to the plaintiffs, each of whom occupied an area manager position, was an unwritten unlimited vacation policy where the plaintiffs could take days off with pay as long as they notified their supervisors of the time requested and received approval.The trial court held, and the appellate court affirmed,[3] that EF did indeed owe the plaintiffs payment for accrued but unused vacation under Section 227.3. The court found that EF’s policy allegedly applicable to the area managers was not in writing and not formally communicated to the area managers, who thus had no reason to understand that vacation time was not included in their compensation. According to the court, while EF referred to its vacation policy applicable to plaintiffs as “unlimited” or “uncapped,” substantial evidence showed that it was neither.[4]The trial court, and later the appellate court, determined that EF’s vacation policy applicable to area managers did in fact have an implied limit. EF “expected plaintiffs to take vacation in the range typically available to corporate employees (such as two to six weeks), not an “unlimited” amount.”[5] Moreover, the court found, the plaintiffs’ work schedules precluded them from being able to take advantage of supposedly unlimited vacation. Plaintiffs and other EF area managers indicated that they had no understanding that they could take off as much time as they wanted, and they indeed used the written policy contained in the Employee Handbook – which did provide for specific amounts of vacation, accrual, and usage limits – as guidance for their vacation usage. All of this, according to the court, supported a finding that the plaintiffs were owed vacation pay under Section 227.3.<h3>A Roadmap for Unlimited Vacation Policies Going Forward?</h3>The appellate court was careful to try and limit the scope of its holding. “In any event, we need not decide whether vacation wages are earned under an unlimited policy—whether “uncapped time off equate[s] to ‘vested vacation’”—as that is not the policy here.”[6] The court cited with seeming approval the benefits and appeal that unlimited vacation policies potentially offer.[7] The court then laid out a variety of factors that might allow an employer to avoid the requirements of Section 227.3 while offering unlimited vacation. Viewed from another angle, however, these factors can also be read as demonstrating what a successful unlimited vacation policy might need to have to avoid triggering Section 227.3. According to the court, an unlimited vacation policy may successfully avoid the obligations of Section 227.3: where, for example, in writing it (1) clearly provides that employees’ ability to take paid time off is not a form of additional wages for services performed, but perhaps part of the employer’s promise to provide a flexible work schedule – including employees’ ability to decide when and how much time to take off; (2) spells out the rights and obligations of both employee and employer and the consequences of failing to schedule time off; (3) in practice allows sufficient opportunity for employees to take time off, or work fewer hours in lieu of taking time off; and (4) is administered fairly so that it neither becomes a de facto “use it or lose it policy” nor results in inequities, such as where one employee works many hours, taking minimal time off, and another works fewer hours and takes more time off.[8] This is hardly a bright line standard, but it does provide guidance to employers who currently have or are contemplating unlimited vacation policies. Important to note is that factors 3 and 4 look at how the policy operates in actual practice versus just what the written policy purports to offer. Employers claiming to offer unlimited vacation but who know employees could never in practice take more than two weeks due to job and/or industry demands may want to consider if a court would consider their policy truly “unlimited.” Clearly, this guidance from the court is likely to be used by employees and their attorneys as a roadmap to challenge unlimited vacation plans for employees who have taken little vacation but are not being paid out anything at termination.Bonus Concern: When Is a Release of Claims Not a Release?While the court’s opining on unlimited vacation policies is the main focus of McPherson, the court also made other conclusions about releases and wage claims that are worth reviewing as a reminder that releases are not always completely effective against certain wage claims.One such finding deals with general releases of claims. We note that this section of the court’s opinion is not certified for publication, but it is instructive nonetheless. One of the plaintiffs had signed a release in exchange for severance at the time of her termination. The release specifically provided that it was a release of claims under any state or federal labor law and that the employee understood that “[n]o additional payments will be due or made to you for salary, bonus, commissions, benefits, severance, vacation, personal days, or otherwise other than as specified in this agreement.”[9] EF argued that this release precluded this particular plaintiff’s claim for vacation wages. The trial court, and the appellate court, disagreed. According to the trial court, California Labor Code Section 206.5 “prohibits an employer from requiring an employee to release a claim for wages that are due and unpaid unless it has paid those wages.”[10] However, wages “are not considered “due” under the statute if the employer and employee have “a bona fide dispute” as to whether they are owed.”[11] Here, however, according to the court, there was no dispute over the vacation pay at the time the plaintiff signed the release of claims. Indeed, according to the court, at the time the plaintiff signed the release, “neither she nor EF knew EF owed her unpaid vacation wages. No conflict existed between them over vacation pay or any other earned, but unpaid wages, for that matter.”[12] Thus the court held the plaintiff’s release was void under Section 206.5 as to vacation pay.The court stated that it was not saying that an employee could never release unknown claims, just that “there must exist at least a “bona fide” or “good faith” dispute between the parties at the time the employee releases a claim for past wages for the release to be valid under section 206.5.”[13] We note as well that most courts agree that in order to effectively waive claims under the federal Fair Labor Standards Act (“FLSA”), settlements must be supervised by either a court or the U.S. Department of Labor.[14]While the McPherson court construes this holding as dictated by precedent, it certainly seems to place more restrictions around when a release of a wage claim is valid than has long been thought.Bonus Concern: How Far Back Does a Claim for Vested Vacation Go?In affirming the amount of damages awarded to two of the three plaintiffs, the trial and appellate courts held that the plaintiffs’ claims for vacation pay that vested more than four years prior to their terminations were not barred by the statute of limitations. Like the section discussed above, this section of the court’s opinion is not certified for publication, but it is again instructive. The court noted that another Court of Appeal in an older case had held that claims for vacation pay were limited by the applicable statute of limitations back from the filing date of the claim.[15] That court based its decision on a Division of Labor Standards Enforcement (“DLSE”) interpretive bulletin that applied the statute of limitations in a similar way.[16] The McPherson court, however, stated that it was not bound by Sequeira and observed that more recent cases did not apply this “look-back” statute of limitations to claims for vacation pay.[17] Rather, a claim could encompass all the vacation earned but untaken during an employee’s full term of employment or, in this case, dating back to the start of each plaintiff’s employment in the Area Manager position.For employers who currently have or are considering unlimited vacation policies, the concept that they could be held liable for some amount of vested vacation back to the beginning of employees’ employment is troublesome. While the McPherson court claims not to be holding anything about unlimited vacation policies in general, as discussed above, it seems highly likely that unlimited policies that do not meet the factors laid out by the court could be challenged if not invalidated, putting employers on the hook for what could be years of vacation pay.Bonus Concern: Can Vacation Policies Lead to Lawsuits in M&A Transactions?The McPherson decision highlights how unlimited vacation policies are not without potential risk. In an M&A transaction, how to treat vacation pay is often a source of contention and the added complication of unlimited vacation may create additional risk. Illustrating the issues a vacation policy and how it is treated in a transaction can create is a lawsuit against General Electric Corp., filed in Pennsylvania state court by a purported class of up to 1,100 former GE Transportation workers whose employment was transferred to Wabtec Corp. when General Electric Corp. sold the GE Transportation division to Wabtec Corp. in February 2019. According to the employees, they should have been paid out for their accrued but unused vacation hours in accordance with a provision in their contracts. According to the complaint, employees who transferred to other divisions within GE, or stayed with GE and then left post transaction, either kept or were cashed out for their accrued but unused vacation. The employees who went to Wabtec, however, did not receive a cash out despite having been technically terminated as GE employees. These employees are now suing for that unpaid time, plus additional liquidated damages equal to 25% of their unpaid time or $500, whichever is greater, alleging that GE did not act in good faith when it failed to cash out its former employees.This lawsuit highlights the importance of ensuring that vacation pay is handled correctly in corporate transactions, so that companies are not subject to unanticipated claims that neither the buyer nor the seller has taken into account in the transaction. McPherson found that an unlimited vacation policy actually wasn’t unlimited while also holding that vacation pay was not subject to a statute of limitations. If this type of finding was made in connection with a corporate transaction involving a large number of employees, the costs could be significant. Companies involved on both sides of a transaction should do their due diligence on all vacation policies and understand the various implications of how vacation pay will be handled when a transaction closes.<h3>Conclusion</h3>Employers should consider the McPherson findings and stated factors about when an unlimited vacation policy is truly unlimited and then assess their existing or planned policy to ensure that all of the factors – which include how the policy actually plays out in practice – are satisfied. Otherwise, employers may find themselves paying for vacation pay it did not plan, or budget, for, or subject to a lawsuit, as seen in the Pennsylvania case. Of course, as noted above, if the California Supreme Court accepts the case for review, McPherson will no longer be binding, though it would be citable for its persuasive value, and we will follow it for a potentially definitive ruling from the Court. <a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref1">[1]</a> 260 Cal. Rptr. 3d 640 (Ct. App. 2020).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref2">[2]</a> 260 Cal. Rptr. 3d at 646.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref3">[3]</a> The Court did reverse one aspect of the trial court’s ruling; namely, the amount of damages the trial court awarded to one plaintiff, who moved to Virginia from California during the course of her employment.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref4">[4]</a> McPherson, 260 Cal. Rptr. 3d at 655.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref5">[5]</a> Id.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref6">[6]</a> McPherson, 260 Cal. Rptr. 3d at 654-55.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref7">[7]</a> Id.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref8">[8]</a> Id.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref9">[9]</a> McPherson, 260 Cal. Rptr. 3d 640, section not certified for publication.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref10">[10]</a> Id.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref11">[11]</a> Id.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref12">[12]</a> Id.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref13">[13]</a> Id.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref14">[14]</a> While most courts do take this view, there have been some decisions finding that a pre-litigation waiver of FLSA claims is effective. See, e.g., Martin v. Spring Break '83 Prods., L.L.C., 688 F.3d 247, 250 (5th Cir. 2012); Gaughan v. Rubenstein, 261 F. Supp. 3d 390 (S.D.N.Y. 2017), order withdrawn, No. 17-2490, 2017 WL 7532583 (2d Cir. Dec. 6, 2017). <a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref15">[15]</a> Sequeira v. Rincon-Vitova Insectaries, Inc., 32 Cal.App.4th 632, 637, 38 Cal. Rptr. 2d 264 (1995).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref16">[16]</a> Id. at 635.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/QLEOSFMQ/ELC%20-%20Unlimited%20Vacation%20Article%20-%201905731%20(002).DOCX#_ftnref17">[17]</a> The McPherson court cited Church v. Jamison, 143 Cal.App.4th 1572 (2006) and Soto v. Motel 6 Operating, L.P. 4 Cal.App.5th 385 (2016).

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Of Counsel

Lloyd W. Aubry, Jr. is a member of our Employment and Labor Group. Lloyd’s practice encompasses all aspects of employment and labor law, including litigation and counseling.

Lloyd Aubry

Lloyd Aubry’s practice encompasses all aspects of employment and labor law, including litigation and counseling. He represents public and private clients in a variety of matters relating to wage and hour law, employment discrimination, wrongful discharge, safety and health issues, and National Labor Relations Act (NLRA) issues. Mr. Aubry represents clients before administrative agencies and in state and federal court. A significant part of his practice involves expert testimony and consulting on issues relating to the Department of Industrial Relations. In this capacity, he has served for both employers and employees.

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New California Court Decision Highlights Potential Perils of Unlimited Vacation. Bonus Concerns: Settling Cases with Releases, Vacation Pay Statute of Limitations and Vacation Pay Lawsuit in M&A

New California Court Decision Highlights Potential Perils of Unlimited Vacation. Bonus Concerns: Settling Cases with Releases, Vacation Pay Statute of Limitations and Vacation Pay Lawsuit in M&A

Paid Time Off - Do Not Use

While the United States and California legal worlds remain (understandably) focused on issues arising out of the COVID-19 global pandemic, California courts con

Since 1949, May has been Mental Health Awareness Month in the United States. The goals of Mental Health Awareness Month include raising awareness about mental health issues and illnesses, educating the public about mental health, reducing the stigma and misconceptions about mental illness, and providing strategies for improving mental health and general wellbeing.Mental health issues affect every aspect of an individual’s life, and the workplace – where Americans spend about one third of their adult life – is no exception. A 2019 survey conducted by Mind Share Partners revealed that experiencing symptoms of negative mental health at the workplace is the norm rather than the exception. While one in five (i.e. 20%) individuals have a mental health condition, the study showed that 60% of individuals experienced mental health symptoms over the past year.[1] And, symptoms are equally prevalent across all levels of seniority, from company CEOs all the way down the chain of command. Not surprisingly, a negative environment at work can lead to or exacerbate mental health problems. And, a negative work environment does not only take a toll on employees’ health and wellbeing; the health consequences can also be costly to employers by resulting in reduced productivity and increased absenteeism and staff turnover. In fact, the Mind Share Partners’ survey found that 61% of individuals stated their productivity was affected by their mental health. Also, a recent study led by the World Health Organization estimated that depression and anxiety disorders cost the global economy approximately $1 trillion U.S. dollars each year in lost productivity.[2] Consequently, employers that promote mental health and support employees with mental illnesses are more likely to benefit from associated economic gains, such as increased productivity and talent retention.While Mental Health Awareness Month comes to a close, mental health issues continue to press on, particularly during the current COVID-19 pandemic. Employers and employees alike will benefit from an employer’s efforts to promote positive mental health and support employees with mental health issues. These efforts may include providing training on mental health, particularly to managerial employees; encouraging open communication between colleagues through open-ended questions and consistent check-ins; putting programs in place that encourage employees to be more comfortable sharing and discussing their mental health; and establishing anti-harassment policies and effective protocols to address harassment.<h3>Taking Steps against Workplace Harassment</h3>Preventing workplace harassment is extremely important for employers as a way to promote positive mental health.  Indeed, harassment is a commonly reported cause of work-related stress and presents health risks to employees. A study conducted in 2014 found that workplace harassment in the United States is associated with significant health risk factors and morbidity, and that anti-harassment workplace policies and protocols can play a major role in reducing harassment and the resulting negative health consequences.[3]Proactive steps employers can take to prevent or limit workplace harassment may include:<ol><li>Maintain a written anti-harassment policy. The policy should be clear-cut and easy to understand. The policy should be reviewed with all employees and made easily accessible for future reference. Some states, such as California[4] and New York,[5] require such policies by law.  </li><li>Institute training programs. Employers may consider providing training programs to all employees with a focus on how to identify unacceptable behavior in the workplace, including recognizing sexual harassment and what steps to take to report inappropriate behavior the employee observes or personally experiences. Also, specialized harassment training may be provided to managers and supervisors on issues relating to identifying harassment as well as properly responding to complaints and reports of harassment received from subordinates. In some states, training is mandatory and must be provided on a regular basis (annually or every two years).  </li><li>Establish a clear complaint reporting procedure. The process for making a complaint should be clear and easy to follow. Employees should feel that each complaint is taken seriously and will be investigated when appropriate to do so. Additionally, consistent communication with the employee making the complaint throughout the process is helpful to provide assurances.</li><li>Create a protocol for investigating reports and complaints. Larger organizations may find it useful to have a set protocol in place for investigations to ensure consistency in the company’s approach and ensure that appropriate steps are taken each time.[6]   </li></ol>While the current global pandemic has disrupted nearly every aspect of the workplace, including a shift for many companies to a virtual, work-from-home model, it does not mean that workplace harassment has ceased. In fact, with many employees working in pajamas and sitting comfortably at home behind a computer screen, the type of professionalism exhibited at the workplace may be lost and lines regarding acceptable behavior may begin to blur. Harassment such as crude jokes or inappropriate images shared over emails may become more rampant. So, while employers have a lot of other priorities due to the global pandemic, their obligation to address and investigate harassment complaints should not fall by the wayside. Even if investigations of reported harassment need to be conducted virtually because employees continue to work from home, they should be conducted promptly and thoroughly. Employers may consider changing or revising their protocols accordingly to lend themselves to this new environment.  <h3>A Quick Reminder about Harassment Training Requirements in CA and NY</h3>New York State Law now requires that every employer, no matter its size, provide anti‑sexual harassment training to all employees on an annual basis.[7] The New York Department of Labor and Division of Human Rights provides free training videos and materials that employers can use to satisfy the training requirements.[8] If an employer prefers to use its own training, the training must be interactive and include (1) an explanation of sexual harassment, (2) examples of conduct that would constitute unlawful sexual harassment, (3) information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment, (4) information concerning employees’ rights of redress and all available forums for adjudicating complaints, and (5) information addressing conduct by supervisors and any additional responsibilities for such supervisors.Under California law, employers with five or more employees (including temporary and seasonal workers) are required to provide sexual harassment prevention training to all employees by January 1, 2021, and once every two years thereafter.[9]  The law requires covered employers to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees. Note that under current law, employers with 50 or more employees are already required to provide supervisory employees with two hours of sexual harassment training. The new law does not extend the compliance deadlines for those obligations. However, it clarifies that supervisors who were provided training in 2018 do not need to be trained again until 2020. Beginning January 1, 2021, temporary or seasonal employees hired to work for less than six months must be trained within 30 calendar days of beginning work or 100 hours of work, whichever occurs first. The California DFEH offers a free online training course that satisfies the requirement for nonsupervisory employees[10] and is working on developing free training for supervisory employees as well. Employers, however, can choose to provide their own training, either live or in another kind of interactive format. The training must include (1) information and practical guidance regarding federal and state law concerning the prohibition against and prevention of sexual harassment, (2) information regarding the remedies available to victims of sexual harassment; (3) practical examples of harassment, discrimination, and retaliation; and (4) information about preventing abusive conduct and harassment based on sexual orientation, gender identity, and gender expression.Even for those employers not in New York or California, harassment training for employees can be very beneficial, particularly for supervisory employees. Taking steps to prevent harassment in the workplace can promote positive mental health. <a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref1">[1]</a> <a target="_blank" href="https://www.mindsharepartners.org/mentalhealthatworkreport">https://www.mindsharepartners.org/mentalhealthatworkreport</a>.  Mind Share Partners’ 2019 Mental Health at Work Report surveyed 1,500 individuals from March to April 2019.  All participants were at least 16 years old, employed in a full-time position at a company with at least 11 employees, and resided in the United States.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref2">[2]</a> See World Health Organization Mental Health in the Workplace Information Sheet.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref3">[3]</a> Khubchandan, J., Price, J.  Workplace Harassment and Morbidity Among US Adults: Results from the National Health Interview Survey.  Journal of community health 40, no. 3 (2015): 555-563, available at <a target="_blank" href="https://pubmed.ncbi.nlm.nih.gov/25399052/">https://pubmed.ncbi.nlm.nih.gov/25399052/</a>.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref4">[4]</a> See California Code of Regulations, section 11023 (2 CCR § 11023).  California also requires employers to either post the poster on sexual harassment created by its Department of Fair Employment and Housing (“DFEH”) or distribute the fact sheet on sexual harassment to employees.  Both can be found at <a target="_blank" href="https://www.dfeh.ca.gov/Posters/">https://www.dfeh.ca.gov/Posters/</a> under Required Materials.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref5">[5]</a> See New York Labor Law Section 201-g (N.Y. Lab. Law § 201-g).<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref6">[6]</a> The California DFEH has published a comprehensive Workplace Harassment Prevention Guide, which can be useful to employers both in and outside of California.  The guide can be found here: <a target="_blank" href="https://www.dfeh.ca.gov/wp-content/uploads/sites/32/2017/06/DFEH-Workplace-Harassment-Guide-1.pdf">https://www.dfeh.ca.gov/wp-content/uploads/sites/32/2017/06/DFEH-Workplace-Harassment-Guide-1.pdf</a> <a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref7">[7]</a> N.Y. Lab. Law § 201-g.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref8">[8]</a> This resource is available here: <a target="_blank" href="https://www.ny.gov/combating-sexual-harassment-workplace/employers">https://www.ny.gov/combating-sexual-harassment-workplace/employers</a>.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref9">[9]</a> Under SB 1343, the initial compliance deadline was January 1, 2020, but SB 778 extended that deadline to January 1, 2021.  It would not be surprising if this deadline were extended again, given the disruptions to business caused by the global pandemic.<a href="file:///C:/Users/btk1/AppData/Local/Microsoft/Windows/INetCache/Content.Outlook/AMZF9Y4N/ELC%20May%202020%20-%20Mental%20Health%20and%20Workplace%20Harassment%20-%204250655%20(003).DOCX#_ftnref10">[10]</a> This resource is available here: <a target="_blank" href="https://www.dfeh.ca.gov/shpt/">https://www.dfeh.ca.gov/shpt/</a>.

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The Impact of Workplace Harassment on Mental Health

IS TIME UP FOR THE SEVERE OR PERVASIVE STANDARD? HARASSMENT CLAIMS IN 2020 AND BEYOND

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Since 1949, May has been Mental Health Awareness Month in the United States. The goals of Mental Health Awareness Month include raising awareness about mental h

The Impact of Workplace Harassment on Mental Health