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Archive for the ‘Employment Law Blog (US)’ Category

Florida Governor Signs Employment Eligibility Verification Bill into Law

Posted on: July 2nd, 2020

By: Melissa Santalone

Florida Governor Ron DeSantis has signed into law a bill on verification of employees’ legal authorization to work in the U.S. that is a far cry from the original bill proposed at the beginning of the legislative discussion. As we discussed here, the initial bill would have required all Florida employers to register with and use the E-Verify system, a web-based system operated by the Department of Homeland Security (DHS) that compares information supplied by the user with data held by DHS and the Social Security Administration, to verify the employment eligibility of each new employee. It would also have imposed suspension of business licensure upon the first violation and allowed a private right of action by employees that are U.S. citizens or resident aliens that were discharged by the employer while the employer knowingly employs an “unauthorized alien” at the same job site or in the same job classification elsewhere in Florida. However, this initial version was stripped of these and other provisions through the legislative process, making compliance for Florida private employers much easier.

In the end, the bill signed by Gov. DeSantis will require, beginning January 1, 2021, all Florida public employers, contractors and subcontractors to use the E-Verify system to verify the employment eligibility of all their employees. These public employers, contractors, and subcontractors are prohibited from entering into contracts with another entity unless each party uses the E-Verify system. Subcontractors are required to provide contractors with whom they enter into contracts with an affidavit providing that the subcontractors do not employ, contract with, or subcontract with “unauthorized aliens.” 

In contrast, beginning January 1, 2021, private employers are only required to verify new employees’ and, upon renewal or extension of their contracts, contract employees’ eligibility either by requiring the employees to fill out standard I-9 forms and providing the documentation required by the form, which is already required by federal law, or by using E-Verify. The law provides that private employers may not be held civilly or criminally liable for hiring or continuing to employ an “unauthorized alien” for whom the information collected for verification of employment eligibility indicates the person’s work authorization status is not that of an “unauthorized alien.” Compliance with the statute gives rise to a rebuttable presumption that private employers did not knowingly employ an “unauthorized alien.”  In terms of enforcement, private employers must retain verification documentation for three years and must produce such documentation to the Florida Department of Law Enforcement, the Florida Attorney General, a state attorney, or a statewide prosecutor upon request. If a private employer is found to have violated this statute, it must produce an affidavit attesting that it will comply with the statute going forward, has terminated all “unauthorized aliens” in its employ, and will not knowingly employ “unauthorized aliens.” If the private employer fails to provide such an affidavit within 30 days, it will be subject to suspension of its business licensure until it provides the affidavit. If a private employer is found to have violated the law three times within three years, its business licenses may be permanently revoked. 

If you have questions about Florida law surrounding the use of E-Verify or other labor and employment-related questions, please contact Melissa A. Santalone at [email protected]

Agreement to Arbitrate Enforceable Even After Termination of Agreement with Assisted-Living Facility

Posted on: July 1st, 2020

By: Kevin Kenneally, Janet Barringer and William Gildea

The United States Court of Appeals for the First Circuit has upheld a challenge to the enforceability of an arbitration agreement in the senior living facility and long-term care (LTC) arena. In Biller v. S-H OpCo Greenwich Bay Manor, LLC, No. 19-1865, 2020 U.S. App. LEXIS 17735, at *1 (1st Cir. June 5, 2020) (“Biller”), the First Circuit determined an arbitration clause in a residency agreement was enforceable after the LTC resident had ceased receiving care at the facility.  With this decision, facilities will have clarity about the agreements and can rely on the contractual terms with its residents to arbitrate applicable claims, even after a resident may leave the facility. The decision should further dissuade residents from challenging arbitration clauses and reduce unnecessary litigation costs.

In Biller, the plaintiff moved into the assisted-living facility in 2016 where the plaintiff’s daughter and attorney-in-fact signed the residency agreement on her mother’s behalf. The residency agreement, among other things, stated that “it would continue indefinitely, but that either party could terminate it ‘immediately upon written notice in the event of [Plaintiff’s] death or if [she] must be relocated due to [her] health.’” Biller, supra at * 2.  The residency agreement included an arbitration provision stating, in part:

Any and all claims or controversies arising out of, or in any way relating to, this Agreement or any of your stays at the Community…. shall be submitted to binding arbitration, as provided below, and shall not be filed in a court of law…. The parties to this Agreement further understand that a judge and/or jury will not decide their case.

Id., at * 3 (emphasis in original). More than one year after moving into the defendant facility, the plaintiff alleges she suffered serious health complications due to the failure of the facility’s staff to properly administer prescribed medication. The plaintiff eventually was admitted to the hospital, and she vacated the facility permanently. 

The plaintiff brought claims under Rhode Island state law arising out of the facility’s alleged negligent administration of prescription drugs. The facility removed the action to federal court and simultaneously moved to compel arbitration. The facility resident opposed the motion to compel arbitration asserting the arbitration agreement “wasn’t in effect” between the plaintiff and the facility, in part, and claiming the agreement terminated when the plaintiff left the original unit.  The ALF facility in turn argued “the termination clause in the residency agreement had not been triggered, because [plaintiff] merely ‘receiv[ed] different services over time at the same facility’ throughout her stay; and there was no superseding agreement, because the March 2016 residency agreement contemplated additional services and fees.” Biller, supra at * 6.

The United States District Court, District of Rhode Island, denied the facility’s motion to compel arbitration because, in its view, the residency agreement terminated when the plaintiff moved to a different unit within the facility. The First Circuit Court of Appeals in Biller, however, reversed the District Court’s decision. Biller held plaintiff failed to “mount an ‘independent’ challenge to the arbitration agreement itself” and the plaintiff did not “identif[y] evidence that the parties intended not only the residency agreement but also their arbitration obligations to lapse when [plaintiff] relocated (or at some other time before [the facility] sought to invoke arbitration).” Biller, supra at * 21 (internal citations omitted).

The First Circuit Court of Appeals’ decision in Biller bolsters assisted-living facilities and other long-term care centers’ right to enforce arbitration, even after moving out. Unless a resident or the respective representative is able to establish the parties’ intent at contract formation that arbitration obligations terminate upon expiration of a residency agreement, claims arising out of the agreement should remain arbitrable.

If you have questions or would like more information, please contact Kevin Kenneally at [email protected], Janet Barringer at [email protected] or William Gildea at [email protected].

OSHA Issues Guidance On Reopening for Non-Essential Businesses

Posted on: June 24th, 2020

By: Hillary Freesmeier

The Occupational Safety and Health Administration, better known as OSHA, has recently released its Guidance on Returning to Work for those businesses that have been deemed “non-essential” during the COVID-19 pandemic.

The Guidance directs a Three Phase approach to reopening and identifies several categories employers should address in their reopening plans. OSHA continues to encourage employers to consider ways in which to utilize workplace flexibility, such as teleworking, and alternative business operations to provide goods and services to customers, such as curbside pickup.

During Phase 1, employers should consider allowing employees to telework when possible and feasible. For employees returning to the workplace, employers should consider limiting the number of people in the workplace and maintain strict social distancing practices. Flexibilities should also be offered for high risk workers and for those whose household members are considered to be at high risk. Non-essential business travel should be limited.

During Phase 2, employers should continue to make teleworking available where possible, but can allow non-essential business travel to resume. Restrictions on the number of people in the workplace can be eased, but moderate to strict social distancing should be maintained. Employers should also continue to accommodate vulnerable workers as they did in Phase 1.

During Phase 3, businesses may resume unrestricted staffing.

Employers should also develop and implement policies and procedures for preventing, monitoring, and responding to any possible emergence or resurgence of COVID-19 in their workplace or community.

All reopening plans should address:

  • Hazard assessment, which should include practices and procedures to determine when, where, how, and to what sources of COVID-19 employees are likely to be exposed to in the workplace;
  • Hygiene, including practices for hand washing, cleaning, and disinfection;
  • Social distancing;
  • Identification and isolation of sick employees, including employee self-monitoring, screening, and isolation procedures;
  • Returning to work after an employee recovers from COVID-19 or has completed a self-quarantine after exposure to a person with COVID-19;
  • Controls for safe work practices, including providing for personal protective equipment based on your hazard assessment results;
  • Workplace flexibility for teleworking and sick leave;
  • Training to ensure employees know how to identify the signs, symptoms, and risk factors associated with COVID-19 and to prevent the spread in the workplace;
  • Anti-retaliation for those who adhere to guidelines or raise workplace safety concerns.

The Guidance also provides that employers may:

  • Conduct worksite COVID-19 testing if done in a transparent, non-retaliatory manner, and
  • Take worksite temperature checks or other health screenings, such as temperature/symptom screening, self-checks, self-questionnaires, etc.; however, employers should ensure these are conducted in a confidential manner as required by the Americans with Disabilities Act
    • Be aware that if you decide to record these results, these records may qualify as medical records under the Access to Employee Exposure and Medical Records standard, which would require employers to retain the results for 30 years and follow confidentiality standards. However, employers may take employee temperature in real time and forgo maintaining records of the results.

Additional Information:

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

Massachusetts Superior Court Rules Non-Compete Agreement Fully Enforceable Despite Minor Change in Job Duties Between Signing and Enforcement of Agreement

Posted on: June 22nd, 2020

By: Janet Barringer and Zinnia Khan

The Massachusetts Superior Court’s recent decision in Now Business Intelligence, Inc. v. Sean Donahue, et al., held minor changes in an employee’s job duties will not create a “new employment contract” so as to invalidate or obviate the employee’s existing non-compete agreement with the employer. This decision reveals the best course of action for employers is to require employees to sign new non-competes in connection with substantial job changes. If there is any doubt or ambiguity as to whether a job change is “substantial” or “material,” we recommend consulting with counsel.

The decision in Now Business Intelligence, Inc. v. Sean Donahue, et al., centered on whether the employer, Now Business Intelligence, Inc. (“NBI”), may hold its former employee, Sean Donahue (“Donahue”), liable for breaching a non-compete agreement, thereby interfering with NBI’s business relations or whether the nature of Donahue’s job had transformed since he had first been hired and entered into the non-compete agreement so as to now invalidate the agreement under the “material change” doctrine. NBI maintained its former employee breached the non-compete agreement, thereby violating the Massachusetts Consumer Protection Law (Chapter 93A).

By way of background in a case from more than fifty years ago, F.A. Bartlett Tree Expert Co. v. Barrington, 353 Mass. 585 (1968), Massachusetts law declares the “material change” doctrine may be invoked by a former employee to support that a restrictive covenant in an employment agreement, such as a non-compete clause, is no longer enforceable because substantial changes to the nature of the employee’s job have occurred since the time the employee entered into the employment agreement. 

In the recent NBI case, Donahue was a former Project Manager at NBI, a technology-based consulting company placing information technology specialists inside of client companies to assist with, manage or solve their technology issues. Immediately prior to his first day on the job at NBI, Donahue executed a non-compete and confidentiality agreement. During his first year at NBI, Donahue was assigned to assist NBI client Raytheon with its implementation of SharePoint, a proprietary Microsoft technology requiring specialized knowledge to implement and operate. 

In or about July 2016, approximately eleven months after he signed his non-compete agreement, Raytheon cut short Donahue’s assignment due to its decision to pause SharePoint implementation. At this stage of Donahue’s employment, Donahue and NBI’s respective accounts of his ensuing job duties began to differ. NBI maintained Donahue was experiencing a slow work period while his job title, key job duties and rate of pay did not change. In contrast, Donahue claimed his position with NBI changed entirely from a Project Manager to a Sales Representative and included new duties such as recruiting customers for NBI and attending sales meetings.  In or about August 2017, Donahue voluntarily left NBI to start his own consulting business.  When NBI discovered Donahue, after his departure from NBI, provided SharePoint services to NBI’s former clients, including Raytheon, NBI sued Donahue to enforce the non-compete agreement. As a defense to NBI’s claims, Donahue invoked the “material change” doctrine and claimed the changes to his job beginning in July 2016 were material thereby invalidating his non-compete agreement with NBI. 

The Superior Court agreed with NBI there were no material changes to Donahue’s job while at NBI which would invalidate his non-compete agreement. The Court noted after his Raytheon assignment concluded, Donahue’s job title at NBI did not change, he was not asked to sign a new non-compete agreement, he was nether promoted nor demoted, his rate of pay remained the same and SharePoint-related tasks remained a significant portion of his billable work. Additionally, the NBI court determined certain changes to Donahue’s regular job duties, such as the need for occasional client pitches, were not a basis for finding the non-compete enforceable under Bartlett Tree. Further, NBI emphasized changes to an employee’s job must be material for the “material change” doctrine to apply, and cited Bartlett Tree as an example. In Bartlett Tree, the employee’s job changed significantly over an eighteen year period, including a promotion, different employment titles, different job duties, changes in remuneration and changes in sales area. These changes, taken together, showed a clear new employment contract and that the original employment contract was “abandoned and rescinded by mutual consent.”

The NBI v. Donahue decision is helpful for employers because it reaffirms only “material” job changes invalidate an existing employment agreement. Even so, employers must remain aware of the “material change” doctrine and the potential it holds for invalidating employment agreements. As a practical matter, it can be burdensome to require employees to enter into a new non-compete each time his or her position changes. Yet, if employees do not sign new agreements following a change in job duties or circumstances that is later deemed to be “material,” then a pre-existing non-compete may be deemed unenforceable.  

The best course of action for employers is to require key employees to sign new non-competes in connection with substantial job changes. If there is any doubt or ambiguity as to whether a job change is “substantial” or “material,” we recommend consulting with counsel.

If you have questions or would like more information, please contact Janet Barringer at [email protected] or Zinnia Khan [email protected].

U.S. Supreme Court Rules 6-3 That Federal Employment Law Prohibits Discrimination On The Basis Of Sexual Orientation Or Gender Identity

Posted on: June 17th, 2020

By: Ryan Greenspan

In perhaps the most significant and far-reaching employment-law decision in decades, the U.S. Supreme Court ruled on June 15, 2020 that the 1964 Civil Rights Act’s prohibition of discrimination “because of… sex” necessarily includes discrimination based on one’s sexual orientation or gender identity. This decision resolves a circuit split that had developed over the last three years, which meant that the question of whether sexual-orientation or gender-identity discrimination was unlawful depended on the federal circuit in which the case arose. In some circuits it was unlawful, in others it was not. Now there is uniformity on this issue throughout the country.

Before the Court were three cases from three different federal circuits:  Bostock v. Clayton County, Georgia; Altitude Express, Inc. v. Zarda; and R.G. & G.R. Harris Funeral Homes, Inc. v. Equal Employment Opportunity Commission. The plaintiffs in Bostock and Zarda alleged they had been terminated because of their sexual orientation, while the plaintiff in Harris Funeral Homes alleged she had been terminated due to her gender identity.

The Supreme Court’s decision largely turned on the phrase “because of… sex” in the statute. As Justice Neil Gorsuch wrote in the majority opinion:

An employer who fires an individual for being homosexual 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. Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result. Likely, they weren’t thinking about many of the Act’s consequences that have become apparent over the years, including its prohibition against discrimination on the basis of motherhood or its ban on the sexual harassment of male employees. But the limits of the drafters’ imagination supply no reason to ignore the law’s demands. When the express terms of a statute give us one answer and extratextual considerations suggest another, it’s no contest. Only the written word is the law, and all persons are entitled to its benefit.

What does this mean for employers? Companies, including government agencies, that discriminate against a worker for being gay or transgender now face the same exposure as if they discriminate against an employee on the basis of race, color, religion, sex, or national origin. These remedies can include back pay, attorney’s fees, and compensatory and punitive damages up to the statutory caps from $50,000 to $300,000, depending on the size of the employer. While 21 states and the District of Columbia already had such protections in place for gay and transgender employees, the Bostock decision adds an extra layer of protection at the federal level, which applies to all states. Employers should adjust their policies accordingly.

It bears noting the 1964 Civil Rights Act applies only to employers with 15 or more employees, so smaller employers are not affected by this ruling (or the Civil Rights Act in general). It is also important to note that, because this decision is interpreting a statute, Congress has the authority to revise or amend the existing law, though there is no indication that it intends to do so.

It will be interesting to see how the Supreme Court’s decision may affect other laws. As Justice Samuel Alito noted in his dissent, over 100 other federal statutes also prohibit discrimination because of sex. If the very concept of sex discrimination necessarily includes discrimination because of sexual orientation or gender identity, as the majority opinion reasons, then these other laws, too, may well be impacted.

If you have questions or would like more information on this decision and its impact on the law, please contact Ryan Greenspan at [email protected].