Workplace Policies and Processes

By Jennifer L. Mora

Seyfarth Synopsis: The Equal Employment Opportunity Commission recently settled lawsuits with two employers it claims violated the Americans with Disabilities Act after rejecting a job applicant and terminating an employee based on their prescription drug use.

The opioid crisis is dominating the news. And, employers have reason to be concerned. According to the Bureau of Labor Statistics, overdoses from the non-medical use of drugs or alcohol while on the job increased from 165 in 2015 to 217 in 2016, a 32-percent increase. That same report showed that overdose fatalities have increased by at least 25 percent annually since 2012. Further, the U.S. Centers for Disease Control recently stated that use of prescription opioids can result in serious issues with addiction and that in 2014, nearly two million Americans either abused or were dependent on prescription opioid pain relievers.

However, employers should tread carefully when addressing any prescription drug use in the workplace. It has long been the case that the Americans with Disabilities Act (ADA) and state disability discrimination laws provide protections to applicants and employees taking prescription medication, including opioids, and regulate the right of an employer to inquire about such use. Two recent settlements with the Equal Employment Opportunity Commission (EEOC) highlight a few common issues facing employers.

The Settlements

In one case, the EEOC brought suit against a pre-school that allegedly terminated an afterschool teacher after he disclosed his prior opioid addiction and his participation in a supervised medication-assisted treatment program. As part of his treatment, he was legally prescribed Suboxone, which is a prescription used to treat adults who are dependent on, or addicted to, opioids. The EEOC claimed the school terminated the teacher 30 minutes into his first work day because of his use of this medication. The EEOC claimed that the failure of the school to conduct an individualized assessment to determine what, if any, impact the drug had on the teacher’s ability to perform his job violated the ADA. As part of the settlement, which required a $5,000 payment to the teacher, the EEOC required the school to, among other things:

  • Amend its written drug use policy to include a clear and specific exclusion to the policy for individuals who use legally-obtained prescription medication in a lawfully-prescribed manner.
  • Create an ADA-compliant procedure for conducting an individualized assessment of an employee who is enrolled in any form of alcohol, drug, or illegal substance rehabilitation program in order to determine whether the employee can safely perform the essential functions of his or her position with or without reasonable accommodation.

In another case, the EEOC alleged the employer withdrew an applicant’s job offer based on a positive drug test result for prescription medication. The EEOC also alleged the employer maintained an unlawful policy requiring all employees to report if they were taking any prescription and nonprescription medication. Both actions, according to the EEOC, violated the ADA. The parties settled for $45,000, with a requirement that the employer adopt company-wide policies to prevent future hiring issues under the ADA and only require employees to report prescription medications if the employer has a “reasonable suspicion” that the medication may be affecting performance.

Takeaways for Employers

These settlements serve as a reminder that employers should avoid making adverse decisions based on misperceptions or a lack of information about the effect of lawful prescription drug use on their employees’ ability to perform their job duties. In general, employees have a protected right to use prescribed controlled substances and come to work unless such use creates an undue risk of harm or presents a safety issue. Moreover, employers should take precautions before implementing blanket drug-testing policies that do not account for the need under the ADA to engage in an interactive process with individuals taking prescription medications and, if necessary, provide reasonable accommodations. Employers also should consider revising any workplace policy that requires employees to disclose their prescription medication use, unless there is reason to believe the medication may impact performance, or otherwise suggests that employees taking such medication will be treated in a certain way without regard to whether their drug use impacts their work.

For more information on this topic, please contact the author, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks Team or the Absence Management and Accommodations Team.

 

By Michael Fleischer, Jean Wilson, and Barry Miller

Synopsis: Massachusetts Attorney General investigates 70 employers (both large and small – across all industries), citing 21 of them for violating the state’s “ban the box” law, which prohibits most businesses from asking about job candidates’ criminal backgrounds on initial employment applications.

Last week, Massachusetts Attorney General Maura Healy announced that her office conducted an investigation into the employment applications of more than 70 Boston-area businesses to determine if they violated the Commonwealth’s “ban the box” law. That law prohibits most employers from asking job applicants about their criminal history on initial applications, subject to limited exceptions. The employers investigated ranged from a restaurant chain to a skin care company to a book store.

The Attorney General entered into agreements with four large employers that have multiple locations in Massachusetts. In conjunction with those agreements, three of the companies were fined $5,000 each, and all were required to alter their application process to comply with the law’s requirements. The Attorney General also sent warning letters to an additional 17 employers, noting that they must take immediate steps to comply with Massachusetts law, and remove questions on their initial job applications that ask questions about applicants’ criminal histories. The improper questions included whether applicants have been convicted of violating the law, whether they had been convicted of a crime or offense other than a minor traffic violation, and if they have ever been convicted of a felony.

The Attorney General’s announcement of this enforcement activity comes on the heels of the Commonwealth’s recent passage of a criminal justice reform bill that becomes effective on October 13, 2018, and further restricts the questions that an employer may ask about an applicant’s criminal history following an initial employment application.

The Attorney General stated that the investigation was part of a larger, ongoing effort by her office to help educate businesses about the law, and to ensure that an individual’s criminal history is not used improperly to deny access to employment. This serves as a reminder to employers to review their hiring-related documents to ensure compliance with evolving legal requirements. Even if applicants do not complain about violations or assert legal claims, the Attorney General is engaged in proactive efforts to make sure that employers in the Commonwealth comply.

If you would like further information, please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Background Screening Compliance & Litigation Team.

 

By: Scott Rabe, Sam Schwartz-Fenwick, Marlin Duro

Seyfarth Synopsis:  In a largely symbolic ruling, in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, the Supreme Court ruled 7-2 in favor of a cake shop owner who refused to make a wedding cake for a gay couple based on his religious beliefs.  By limiting its holding to the facts of the case, however, the Court sidestepped an opportunity to delineate the intersection between free expression of religion and LGBT rights.  As a result, the decision provides little in the way of guidance to employers regarding the role of free expression of religion in the workplace.

In the highly anticipated decision in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, a case closely followed by the media, religious rights advocates, and gay rights advocates alike, the Supreme Court delicately avoided making a decision that could be declared a victory by either side.  Instead, the majority emphasized that the holding in Masterpiece Cakeshop was limited to the facts of the case and that further clarification as to the boundaries between religious rights and LGBT rights would have to play out in the courts.

The Case

Charlie Craig and David Mullins were looking to celebrate their marriage by purchasing a custom wedding cake at Masterpiece Cakeshop, a bakery in Colorado.  Jack Phillips, the owner of the bakery refused to make the wedding cake for the couple because of his religious opposition to same-sex marriage.

The couple filed a Charge with the Colorado Civil Rights Commission (the “Commission”), claiming that the baker’s refusal was in violation of the Colorado Anti-Discrimination Act, which makes it “a discriminatory practice and unlawful for a person, directly or indirectly, to refuse, withhold from, or deny to an individual or group because of  . . . sexual orientation, . . . the full and equal enjoyment of the goods [and] services” of “any place of business engaged in any sales to the public and any place offering services . . . to the public.”  The owner of the bakery, however, maintained that the First Amendment rights to freedom of speech and free exercise of religion protected his refusal to make custom wedding cakes for same-sex couples.

The Commission found in favor of the couple and determined that the actions of the bakery violated Colorado law.  Phillips appealed the Commission’s decision to the Colorado Court of Appeals, which affirmed the Commission’s ruling.

After the Colorado Supreme Court refused to hear his appeal, Phillips appealed to the United States Supreme Court.

The Supreme Court’s Decision

In a 7-2 decision, the Supreme Court reversed the judgment of the Colorado Court of Appeals and found the Commission had violated Phillips’ First Amendment rights of free speech and free exercise of religion.

In its decision, the Supreme Court acknowledged that the case presented “difficult questions as to the proper reconciliation of at least two principles,” one, the authority of the State “to protect the rights and dignity of gay persons who are, or wish to be married but who face discrimination when they seek goods or services” and two, the “right of all persons to exercise fundamental freedoms under the First Amendment.”  While acknowledging the tension between these two principles, the Court did not seek to reconcile them.

Instead, the Court first found the creation of wedding cakes was a “creative” endeavor implicating freedom of expression under the First Amendment, not merely selling a good which might not implicate the First Amendment.

The Court then explained that as Phillips’ refusal to bake  of a wedding cake implicated the First Amendment’s freedom of expression and free exercise of religion clauses, the Commission was obligated to weigh the cake shop owner’s First Amendment rights against the rights of the gay couple. Instead of performing this balancing with “the neutrality that the Constitution requires”, the Court found the Commission exhibited hostility toward Phillips’ beliefs throughout the hearing, making disparaging comments about his religious beliefs and treating the cake shop owner’s case differently than other cases addressed by the Commission involving cake shop owners with different beliefs.  The Court found that this treatment of Phillips’ case violated the First Amendment as it indicated a hostility to a religion or religious viewpoints.

The Court took great care to underscore that the holding in Masterpiece Cakeshop was limited to the facts of that case, stating that “[t]he outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context that this disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.”

The Takeaway for Employers

Many anticipated that the decision in Masterpiece Cakeshop would provide employers and small-business owners with guidance on how to lawfully traverse the landmines that arise when religious beliefs conflict with civil rights statutes. By restricting the decision to the facts, the Court did not provide this guidance.

As such, employers, need not and should not change their EEO or other employment practices, policies, and trainings in light of the Masterpiece Cakeshop decision. Masterpiece Cakeshop does not place rights to the free exercise of religion over LGBT rights or other civil rights, and therefore employers should not take action that elevates the right to free exercise of religion within the workplace.

As always, we invite employers to reach out to their Seyfarth contact for solutions and recommendations regarding anti-harassment and EEO policies, addressing compliance with LGBT issues in the law, and tackling questions regarding the free exercise of religion in the workplace.

By Honore Hishamunda and Alex S. Drummond

Seyfarth Synopsis: Plaintiffs in disability discrimination cases often have sympathetic facts on their side. A recent decision out of the United States Court of Appeals for the First Circuit, however, highlighted that courts are tasked with applying the law in such cases even if doing so leads to a loss for a sympathetic plaintiff.

The Americans with Disabilities Act (ADA), among other things, requires employers to provide reasonable accommodations to employees qualified to perform the essential functions of their jobs and prohibits employers from retaliating against employees for exercising their rights under the ADA. Additionally, ADA cases often involve sympathetic plaintiffs. However, a recent First Circuit Court of Appeals decision – Sepulveda-Vargas v. Caribbean Restaurants, LLC – highlighted the importance of applying the law in such cases even where doing so results in a loss for a sympathetic plaintiff.

The plaintiff in the case was an assistant manager for a fast food franchise. One evening while depositing money on behalf of his employer, plaintiff was “attacked at gunpoint, hit over the head, and had his car stolen.” In the aftermath, plaintiff began to suffer from PTSD and depression. He then requested, as a reasonable accommodation, that he be excused from the company’s rotating shift policy (which rotated managers across the franchise’s district map and placed them on two different day shifts, and an evening shift). After initially agreeing to do so, the employer denied the request.

Plaintiff sued claiming a failure to accommodate. Further, the plaintiff alleged that after making his request, he was retaliated against as he was treated poorly by his co-workers. The First Circuit, affirming the District Court, granted employer’s motion for summary judgment on both of plaintiff’s claims. In doing so, the court noted that its decision was “a lesson straight out of the school of hard knocks” and that “[n]o matter how sympathetic the plaintiff or harrowing his plights, the law is the law and sometimes it’s just not on his side.”

The First Circuit held that the employer did not have to provide any accommodation to plaintiff as he was not qualified to perform the essential functions of his job. Specifically, the court found that the ability to work on a rotating shift was one of the essential functions of his job. In doing so, the court noted that (i) both the employer and plaintiff admitted that rotating shifts was an essential function; (ii) the employer’s job applications for assistant managers and advertising for the same highlighted the need to work rotating shifts; and (iii) permitting plaintiff to bypass the requirement would hamper the employer’s ability to flexibly schedule the remaining assistant managers.

The First Circuit also held that the employer did not retaliate against plaintiff for asserting his ADA rights. Specifically, the court found that plaintiff’s allegations – which focused on being scolded by supervisors for bypassing the chain of command, feeling embarrassed by supervisors treatment, and being made to feel as if he was lying about his health conditions – individually and collectively fell short of statutorily prohibited retaliation. In doing so, the court noted that only treatment that could “dissuade[] a reasonable worker form making or supporting a charge of discrimination” or that produces “a significant, not trivial harm” is actionable. Further, the court found that plaintiff’s allegations fell short of this level and instead characterized his allegations as “nothing more than the petty insults and minor annoyances” which are not actionable under the ADA.

This decision highlights that, even in the ADA context, courts must and will apply the law even if doing so results in a loss for otherwise sympathetic plaintiffs.

If you have any questions regarding this area or need assistance evaluating whether to grant or deny long-term or indefinite leave requests, please contact the author, your Seyfarth Attorney, or a member of the Firm’s Absence Management and Accommodations or Workplace Policies and Handbooks Teams.

By Jennifer L. Mora and Frederick T. Smith

Synopsis: Effective July 1, 2018, Iowa employers may lower their standard for alcohol tests and consider taking action against an employee with a blood alcohol concentration as low as .02. Prior to this time, state law prohibited an employer from taking any action against an employee with an alcohol test result below .04.

Iowa’s drug and alcohol testing statute is considered one of the more onerous and difficult to navigate in the nation (along with Maine and Minnesota). It includes numerous requirements that employers must follow to lawfully conduct pre-employment and employment drug and alcohol tests, including (but not limited to):

  • A requirement that employers implement a written policy that is distributed to employees (including the parents of any employees who are minors) and made available to job applicants and employees for review.
  • A requirement that employers establish an awareness program to inform employees of the dangers of drugs and alcohol in the workplace.
  • If the employer has at least 50 employees in Iowa, and if an employee with a confirmed positive alcohol test (1) has been working for at least 12 of the preceding 18 months, (2) agrees to rehabilitation and (3) has not previously violated the employer’s substance abuse policy, the employee must be given an opportunity to participate in rehabilitation in lieu of termination or other disciplinary action.
  • A requirement that supervisory personnel involved with drug or alcohol testing submit to two hours of initial training and, on an annual basis thereafter, a minimum of one hour of additional training. The training must address a number of topics, including information on how to recognize employee alcohol and drug abuse, documentation of such abuse, and referral of employees who abuse drugs or alcohol to the employer’s employee assistance program or the provision of other resources available to assist employees with substance abuse.

On March 28, 2018, Iowa Governor Kim Reynolds signed an amendment to the drug testing law, lowering the threshold for alcohol testing from .04 to .02. The amendment is effective July 1, 2018. It is unclear from the legislative history what prompted introduction of the bill to amend this single provision in the law. Regardless, the amendment will allow employers (as of July 1) to take action (provided all other aspects of the law are followed) against an employee with a blood alcohol concentration of, for example, .03.

Recent court filings suggest that litigation against Iowa employers for violating the statute’s technical requirements may be on the rise and, thus, Iowa employers should consider reviewing their current drug and alcohol testing policies and programs to ensure compliance.

If you would like further information, please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Workplace Counseling & Solutions Team or Background Screening Compliance & Litigation Team.

By Adam R. Young

Seyfarth Synopsis: Employers are widely installing AEDs to protect employees and visitors, but some states require strict compliance with AED regulations to insulate employers from tort liability.

Employers are Installing AEDs

Reports indicate that over 350,000 Americans suffer from sudden cardiac arrest each year, and approximately 95% of sudden cardiac arrest victims die before reaching the hospital. The majority who receive a defibrillation shock within four minutes of the event survive. Perhaps based in part on this data, federal and state laws have mandated the installation of Automated External Defibrillators (AEDs) in public and government buildings. Employers across the United States are installing AEDs to protect their employees, customers, and visitors. Many employers are promoting the business case for installing AED devices, particularly as key management employees across the workforce age and become statistically more likely to suffer such an event.

Tort Liability

Plaintiffs’ lawyers consistently seek new ways to sue American businesses, especially with regard to novel tools for medical treatment. Adding AEDs at your workplace can have the unintended effect of new liabilities — tort liabilities based on an employees’ (1) failure to use the AED when an employee suffers a sudden cardiac arrest, or (2) failure to administer aid with the AED properly.

Imagine: your company has purchased an AED. A visiting customer suffers a cardiac arrest event and your employees scramble to retrieve the AED. Your employee calls 911 and uses the AED as he waits for paramedics to arrive. Unfortunately, the customer goes into a coma and passes away two days later. One year later, you learn that the late customer’s estate has sued the Company and you personally, alleging that you and the Company have been negligent in installing the AED and allowing an employee to operate it “improperly.”

Limited Civil Immunity

Most states have passed laws making employers immune for lawsuits related to the provision or omission of care with an AED. However, many of those laws, such as the Illinois AED Act, only provide immunity if the employer complies with each and every requirement in each statute’s laundry list of AED rules. Some examples of these mandatory rules include:

  • Training Requirements — anticipated rescuers need to be properly trained by certified instructors. Rescuers and instructors needs to be retrained periodically.
  • Settings and Maintenance — employers must select AEDs from an approved government list. AEDs must be set in the appropriate modes. They must be properly maintained and tested.
  • Notification — Employers must notify the proper authorities with specific data on their AEDs. After use in a medical emergency, employees must activate the emergency response system.

Limited Room for Error

The bullets above are examples of common requirements under state AED laws. Recent case law in Illinois, for instance, provides that if employers fail to comply with any single AED requirement, they could lose all immunity from negligence claims. Accordingly, courts have ruled that Illinois employers must comply with all training and notification requirements, or they face potential lawsuits related to employees’ misuse of AEDs.

All 50 states have their own requirements, which may vary considerably. Employers should consult with legal counsel to ensure that they comply with their state’s AED laws.

By Paul Galligan and Samuel Sverdlov

Seyfarth Synopsis: “Thank you for your email, I will be out of the office from….” New York City employers might soon be seeing a lot more of these “out-of-office” emails from their employees if a recently proposed “Right to Disconnect” law is enacted.

In September 2017, Apple created an iPhone commercial in advance of the iPhone X release, which advertised all of the many new features of this smartphone, including: paying for goods with facial-recognition software, creating “animojis,” and taking professional-quality photographs. The new smartphone is being marketed as a traveling computer, bank, camera, video game console, mp3 player, and also, telephone. Interestingly, Apple did not advertise what else the smartphone has essentially become — a mobile workspace, which allows employees to be reached at anytime, anywhere.

At least one New York City lawmaker, New York City Council Member Rafael Espinal, has lofty ambitions to combat the purportedly growing demand on employees to make themselves available to their employers at all hours of the day. On March 22, 2018, Mr. Espinal introduced a potentially landmark piece of legislation, Int. 0726-2018, which is modeled after a similar law in France, and would prevent employers with more than ten employees from requiring employees to access work-related communications outside of normal working hours. Although the legislation excludes certain employees from this requirement [i.e, any employees whose terms of employment require them to be on call twenty-four hours a day on days when they are working (under this scenario the law shall only apply to such employees’ days off, including paid time off), work study program employees, employees compensated through qualified scholarships, and independent contracts], employers would be prohibited from retaliating against employees who exercise their rights under this legislation.

Further, the law would mandate that employers give written notice to employees of their rights under this law, and adopt a written policy regarding the use of electronic devices to send or receive work-related communications during non-working hours, the usual working hours for each class of employees, and the various categories of paid time off that employees are entitled to. Employers who violate this statute must pay employees compensatory damages, and are subject to financial penalties ranging from $50 for failing to notify employees of their rights to $2,500 for retaliating against employees.

If this law does pass, New York City will be the first jurisdiction within the United States with a right-to-disconnect bill. It goes without saying that this legislation would have a monumental impact on the workplace for New York City employers, and would cause them to, for the most part, rethink and overhaul their entire workplace. As always, we will monitor this legislation and update you accordingly.

If you have any questions regarding this area or need assistance evaluating whether to grant or deny long-term or indefinite leave requests, please contact the author, your Seyfarth Attorney, or a member of the Firm’s Workplace Policies and Handbooks or Absence Management and Accommodations Teams.

By Jennifer L. Mora and Pamela Q. Devata

Seyfarth Synopsis: Michigan Governor Rick Snyder recently signed a bill that will prohibit counties and cities from enacting “ban-the-box” ordinances or other restrictions on the ability of private employers to inquire about criminal history early in the hiring process.”

On March 26, 2018, Michigan Governor Rick Snyder signed Senate Bill 0353, which amends existing state law that limits the powers of local governmental bodies regarding the regulation of terms and conditions of employment for private sector employers (the “Local Government Labor Regulatory Limitation Act”), by providing that:

A local governmental body shall not adopt, enforce, or administer an ordinance, local policy, or local resolution regulating information an employer or potential employer must request, require, or exclude on an application for employment or during the interview process from an employee or a potential employee.

In other words, Michigan cities and counties are prohibited from passing ban-the-box-ordinances for private sector employers or other laws that regulate hiring decisions made in the private sector. As a practical matter, this means that local government bodies in Michigan cannot require employers to wait until later in the hiring process, such as after an interview or a conditional offer, to ask job applicants, “Have you ever been convicted of a crime?”.

The law goes on to state that it does not prohibit an ordinance, local policy, or local resolution “requiring a criminal background check for an employee or potential employee in connection with the receipt of a license or permit from a local governmental body.”

The amendment is effective 90 days after it is enacted into law.

In the last few years, nationwide employers have struggled to keep up with the onslaught of state and local ban-the-box laws. Fortunately, for the time being, Michigan employers, and nationwide employers with a presence in Michigan, do not have to worry about this jurisdiction being added to the growing list of such laws, including, most recently, California and Washington. That said, existing Michigan law restricts employer use of criminal history in some respect by making it unlawful for an employer to request information regarding a misdemeanor arrest, detention or conviction that did not result in a conviction.

Employers that hire in Michigan should consider reviewing their background screening policies to ensure that misdemeanor non-convictions are not being requested or considered. All employers should continue to be mindful of other laws regulating criminal records checks and screening policies, including the Fair Credit Reporting Act (a consistent source of class action litigation) and state and local employment and ban-the-box laws.

If you would like further information, please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Background Screening Compliance & Litigation Team.

By Gerald L. Maatman, Timothy F. Haley, and Ashley K. Laken

Seyfarth Synopsis: True to his word, the Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice has announced the first of a number of anticipated no-poach enforcement actions.  While this was a civil proceeding, the Department of Justice has said that in some cases it may treat the conduct as criminal.  Many executives and HR professionals are unaware that the antitrust laws apply to the employment marketplace.  Thus, if they have not done so already, employers should consider the implementation of compliance programs to make sure that appropriate employees are aware of these developments and risks.

In January 2018, Makan Delrahim, the Assistant Attorney General for the Antitrust Division, said that the Department Of Justice (“DOJ”) had been very active in reviewing potential antitrust violations resulting from agreements among employers not to compete for workers.  (We previously reported on this announcement here.)  He said that he was “shocked” at how many there were and that in the coming months there would be announcements of enforcement actions.  He also mentioned that if the conduct occurred or continued after issuance of the October 2016 joint DOJ and Federal Trade Commission (“FTC”) Antitrust Guidance for Human Resource Professionals (the “Joint Guidance”), the DOJ may treat those agreements as criminal.

On April 3, 2018, the first of these announcements was made.  See “Justice Department Requires Knorr and Wabtec to Terminate Unlawful Agreements Not to Compete for Employees,” available at (“News Release”).  The DOJ advised that it filed a complaint in which it alleged that Knorr-Bremse AG (“Knorr”), Westinghouse Air Brake Technologies Corporation (“Wabtec”) and Faiveley Transport S.A., before it was acquired by Wabtec, entered into agreements not to compete for each other’s employees (“no-poach” agreements).  The DOJ contends that these were naked agreements – i.e., not reasonably necessary for a separate, legitimate business transaction or collaboration – and amounted to per se violations of Section 1 of the Sherman Act.  With the Complaint DOJ also filed a Competitive Impact Statement; Explanation of Consent Decree; and Stipulation and Proposed Final Judgment.  (See News Release.)

As noted, Mr. Delrahim stated that there were a number of these investigations ongoing, and in the News Release said that this Complaint was “part of a broader investigation by the Antitrust Division into naked agreements not to compete for employees.”  So more of these announcements can be expected, and some may be announcements of criminal prosecutions.

Many Employees Are Unaware That the Antitrust Laws Apply to the Employment Market

Often some business executives and human resource professionals are unaware that the antitrust laws apply to the workplace.  Executives who would never consider discussing prices with their competitors are unaware that discussing wages or salaries could have antitrust risks.  Similarly, employee covenants not to compete are commonplace and many executives have them in their own employment contracts.  So unless they have received specific training, an executive may be unaware of the antitrust risks associated with no-poaching agreements.  And up until recently even the most elaborate and detailed antitrust compliance policies that strictly prohibited discussing prices rarely addressed the exchange of wage and salary information or prohibited no-poaching agreements.

But the DOJ and FTC have now greatly ratcheted up their enforcement efforts with respect to alleged restraints in the employment market.  And with the DOJ and FTC taking the position that naked no-poaching agreements are per se unlawful and subject to criminal prosecution, the antitrust risks have been greatly increased — not to mention the costly class actions that are likely to follow any settlement with the DOJ.

Employers Should Investigate and Implement Compliance Programs

Thus, employers can no longer ignore the risk.  If they have not already done so, employers should consider:

  1. Conducting an internal investigation to determine whether the company is engaging in the informal gathering of wage, salary or benefit information; or whether it has entered into any no-poach agreements.  The investigation should be conducted or closely supervised by counsel with steps taken to preserve the attorney-client privilege.  Also, if it is discovered that the company has engaged in any “naked” wage-fixing or no-poaching agreements on or after October 25, 2016, then criminal counsel should be consulted as DOJ may treat such conduct as criminal.
  2. Implementing an antitrust compliance program that ensures that all management and human resources personnel are aware that they cannot: (1) engage in a naked wage, salary or benefits-fixing agreement with any other unrelated employer; (2) engage in the gathering or exchange of wage, salary or benefits information without full compliance with the Joint Guidance; or (3) enter into any no-poach agreement without prior approval of counsel.  Such individuals should, on an annual basis, be required to acknowledge in writing that they are aware of these prohibitions.  Also, anyone hired or transferred into any of these positions should be made aware of these prohibitions at the time they are hired or transferred.  These employees should also be advised that the DOJ is likely to treat naked wage/salary/benefit-fixing and no-poaching agreements as criminal and employees could be sentenced to prison for engaging in such conduct.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Labor & Employment Team.

By Brent I. Clark and Craig B. Simonsen

Seyfarth Synopsis: The National Institute for Occupational Safety and Health (NIOSH) recently released its results from a study conducted in 2016 and 2017 that looked at safety programs developed to prevent motor vehicle crashes.

The study included four focus groups conducted with thirty-three managers of employees that drive for work. The managers represented small businesses across four motor vehicle user groups: (1) first responders, (2) oil and gas workers, (3) light-vehicle drivers (e.g., workers who operate passenger vehicles for a variety of work purposes, such as salespeople, home health care workers, realtors, and food delivery workers), and (4) truck drivers.

NIOSH, in its Science Blog, related that vehicle crashes were a leading cause of workplace fatalities, with “1,252 deaths of vehicle drivers and passengers on public roads in 2016. In 2013, on-the-job crashes cost employers over $25 billion and led to 155,000 lost work days.”

The study found that the managers of truck and light vehicle drivers noted a range of minimal approaches to safety, such as mandatory vehicle inspections. Of particular note on the topic of the effectiveness of training is that managers indicated that safety materials needed to be designed that take into account the limited time that they and their drivers can devote to safety training. “Drivers’ varied work schedules and intense workload limit opportunities for group discussions about roadway safety. Managers said they and their drivers prefer concise, highly visual, and interactive communication products, such as short videos and simulations.”

NIOSH concluded that despite the human and financial costs of crashes, safety programs developed to prevent motor vehicle crashes are unlikely to work unless they are designed with the employers’ needs and constraints in mind. “This is particularly true among smaller and midsize employers, which need additional resources and knowledge to be successful.”

For employers, it is important to have safety programs in place that protect company employees. Employers can be sure that, given a workplace accident, agency inspectors may well be reviewing the employer’s policy documents and training materials, and will likely interview the injured employee about her training and understanding of the materials.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the OSHA Compliance, Enforcement & Litigation Team.