By Kevin Young and Christina Meddin

Seyfarth Synopsis: Some states are known for setting high legislative bars with respect to employment rights and protections (looking at you, California). The State of Georgia isn’t one of them. Earlier this month, however, the Peach State broke its mold by enacting one of the most stringent lactation break laws in the country.

Since 2010, the federal Fair Labor Standards Act has required covered employers to provide reasonable, unpaid break time to hourly employees to express breastmilk for a nursing child up to one year after the child’s birth. The law also requires that employers provide employees a private place that is not a bathroom for these breaks. The FLSA’s lactation break requirement does not apply to salaried workers.

While Georgia previously had a law in place addressing lactation breaks in the workplace, the law did not impose requirements beyond what the FLSA required. The state’s law provided that an employer “may, but is not required to” provide a lactation break to an employee who “needs” to express breastmilk “for her infant child.” The law additionally provided that an employer “may, but is not obligated to, make reasonable efforts” to provide a location in close proximity to the work area, other than a toilet stall, to pump breast milk.

In a move that commands attention from employers throughout the state, Georgia ended its permissive approach to lactation breaks with the August 5, 2020 passage of HB 1090, also referred to as “Charlotte’s Law” (named for a teacher whose supervisor would not allow her to pump during a break). The amended law, which is codified under Georgia Code Section 34-1-6, makes several critical changes:

  1. Providing the opportunity for lactation breaks is mandatory, not optional;
  2. Providing a private location other than a restroom to express breast milk in privacy is mandatory, not optional;
  3. Break time provided under the statute must be paid;
  4. The age of the child is not referenced; and
  5. The right to lactation breaks extends to salaried employees.

The law applies to employees who desire to express breast milk at the worksite, and during work hours. Employers are not required to provide this paid break time to employees who are working away from the worksite. Further, the law prohibits employers from discriminating or retaliating against an employee for expressing or requesting to express breast milk, or for reporting any violations of the law.

The new law includes an undue hardship exemption for businesses with fewer than 50 employees. The exemption is available only if compliance would cause “significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.”

In addition to following the new law (which is effective immediately), we advise businesses with employees in Georgia to review their break or nursing mother policies to ensure they’re configured to promote compliance. Please don’t hesitate to reach out to us, or your favorite Seyfarth attorney, if you need help.

By Kevin Fritz and Erin Dougherty Foley

Seyfarth Synopsis: Athleisure company is rightfully able to terminate the employment of individual with physical limitations, despite that individual’s ability to delegate such functions of her position. See Tonyan v. Dunham’s Athleisure Corp., No. 19-2939 (7th Cir. 2020).

Angela Tonyan was employed by Dunham’s Athleisure Corp. as a store manager. She was fired when, after a shoulder injury, she could no longer perform physical tasks such as lifting and reaching. Indeed, her doctor imposed permanent lifting and reaching restrictions.

As usually goes, Tonyan argued that physical tasks weren’t an essential part of her job with the retailer. But the lower court and Seventh Circuit panel disagreed, finding that job descriptions in Tonyan’s case record describe physical tasks — sometimes involving lifting items weighing up to 50 pounds or more — as essential functions of her position. And even though physical tasks only took up 30% of her work day, Illinois and Seventh Circuit precedent on the issue has consistently found that an essential function does not need to encompass the majority of an employee’s time, or even a significant amount of time.

Ultimately, Tonyan lost her case for two reasons:

First, she never disputed that the descriptions were created through a detailed process or that the descriptions reflected the actual experience of a store manager in Dunham’s stores. Nor could she. After all, the Dunham’s store manager description she signed in August 2011 says her job’s essential functions include constantly reaching outward, frequently lifting or otherwise handling items up to 50 pounds and occasionally lifting goods even heavier than that.

Second, the court opined something nuanced in this case: the ability to delegate a task does not necessarily render the task not-essential. Interestingly, Tonyan’s argument that physical tasks were not essential because of the ability to delegate did not hold water. The lower court and Seventh Circuit panel reasoned that the tools available to delegate essential tasks were always available, with or without physical limitation, but just because they were available does not mean that it would be appropriate to delegate these tasks to other employees, and deem them non-essential.

These reasons, combined with a smattering of other evidence that Dunham’s expects its managers to perform physical tasks as part of its efforts to keep labor costs low, led to the holding that a permanent lifting restriction can impact an individual’s ability to manage a retail store, despite the ability to delegate physical tasks.

So what does this ruling tell us?  Well first, it is an excellent reminder to ensure that job descriptions are up-to-date.  If a two pound lifting requirement is actually an essential function of the position, employers should make sure that this is documented accurately in the job description.  Additionally, consider having employees sign off on job descriptions at various times throughout the employment relationship – including upon hire, during reviews/promotion opportunities, and in conjunction with annual reviews.

If you have any questions on these topics, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Absence Management and Accommodations Team.

By Dawn Mertineit

Seyfarth Synopsis: In a rare appellate decision on enforceability of non-disclosure agreements and a plaintiff’s burden to establish the existence of trade secrets, the First Circuit recently overturned a district court summary judgment order and trial verdict. This decision serves as an important reminder for both those who litigate trade secrets claims and those who draft restrictive covenants agreements.

Background

TLS Management and Marketing Services, LLC, a tax planning and consulting firm, sued its former employee, Ricky Rodríguez-Toledo, for alleged misappropriation of trade secrets under Puerto Rico’s misappropriation law and breach of his NDA with TLS. TLS claimed two trade secrets germane to the litigation, the “US Possession Strategy”—essentially a tax arbitrage strategy designed to help clients avoid higher mainland taxes—and “Capital Preservation Reports” or “CPRs,” client-specific reports with tax recommendations based on an analysis of applicable statutes and regulations.

TLS alleged that after leaving its employ, Rodríguez-Toledo used the US Possession Strategy and certain CPRs without TLS’s consent to service client. In fact, Rodríguez-Toledo conceded that before he left TLS, he had downloaded information from TLS’s Dropbox account without authorization, and later referred to TLS information in emails with clients.

On the parties’ summary judgment cross-motions, the district court determined that Rodríguez-Toledo had breached the NDA by using the US Possession Strategy after his departure from TLS. After a bench trial, the district court also found in TLS’s favor on the misappropriation claim, holding that both the CPRs and the US Possession Strategy were trade secrets, which Rodríguez-Toledo had misappropriated. The court also issued a permanent injunction prohibiting Rodríguez-Toledo from “using or disclosing any of TLS’s ‘confidential information’ or its trade secrets” as defined in the NDA.

Trade secrets

On appeal, the First Circuit reversed the district court’s trial verdict in TLS’s favor, finding that it had failed to demonstrate the existence of trade secrets. In doing so, the Court addressed the unique challenges of relying on trade secret protections, compared to other forms of intellectual property such as patents, copyrights, or trademarks:

[M]ost forms of intellectual property have boundaries that are defined before the commencement of litigation … Trade secrets are different. There is no requirement of registration and, by definition, there is no public knowledge of the trade secret in advance of litigation. Even the defendant is not necessarily on notice of the trade secret before litigation. This raises the possibility that the trade secret owner will tailor the scope of the trade secret in litigation to conform to the litigation strategy.

In light of the “potentially amorphous nature of trade secrets,” the Court noted that a trade secret owner bears the burden of proving the “existence and scope of the alleged trade secret.”

Ultimately, the Court determined that TLS had failed to carry its burden for either alleged trade secret. Despite TLS’s claim that the compilation of its employees’ knowledge and skill provided it with a competitive advantage in the form of the CPRs, the Court observed that the reports included voluminous publicly available information, and TLS conceded that the individual client information contained in the reports was not a trade secret. Given that TLS was unable to explain what portion of the CPRs contained information rising to the level of a trade secret, but rather resorted to general descriptions, the First Circuit held that TLS had not established that the CPRs were trade secrets.

Likewise, the US Possession Strategy largely consisted of public knowledge, used openly by competitor firms. Moreover, even as to the parties’ conflicting testimony as to one portion of the strategy that TLS contended was not known to its competitors, the First Circuit held that “TLS could not claim a trade secret protection simply because its loan strategy was not publicly known. TLS also had to establish that this aspect of the Strategy was not readily ascertainable from public sources” (emphasis added). In other words, it was not enough that competitors did not know all aspects of the strategy; TLS would have had to show that even with reasonably diligent efforts, its competitors could not discover the strategy.

NDA

Perhaps to TLS’s surprise and chagrin, the First Circuit likewise reversed the district court’s summary judgment order on the breach of the NDA claim. While practitioners in many jurisdictions may assume that NDAs, as opposed to more onerous restrictive covenants such as non-competes and non-solicits, are easily enforceable and not subject to judicial scrutiny, this decision is an important reminder that all restrictive covenants must be narrowly tailored and bear a reasonable relationship to an employer’s legitimate business interests.

The Court identified several instances in which an NDA might be overbroad, pointing out that an employer’s interest “does not extend to prohibiting the employee from using general knowledge acquired by the employee,” and clarifying that even where such knowledge and skill was developed during employment, that alone is insufficient to support a restrictive covenant. The Court also pointedly disapproved of NDAs prohibiting disclosure of information that is not, in fact, confidential, or prohibiting use of information “properly provided . . . by third-party sources.” The NDA between TLS and Rodríguez-Toledo, hit all these high (or low) notes, as it prohibited disclosure of virtually any information that Rodríguez-Toledo obtained while working for TLS, with extremely limited exceptions.

Perhaps the most surprising aspect of the Court’s order, however, was its decision not to reform the NDA by narrowing its scope to be reasonable and enforceable. While the First Circuit pointed to the Puerto Rico Supreme Court’s guidance, in the context of non-competes, that the court may not modify overbroad covenants, it also highlighted in a footnote that “other mainland US courts have reached the same conclusion as to nondisclosure agreements,” and hinted that revising an overbroad covenant might be contrary to public policy—even in jurisdictions that typically allow reformation.

Takeaways

This rare decision from the First Circuit is instructive to trade secret and restrictive covenants practitioners, and offers several important takeaways:

  • First, it serves as a reminder that plaintiffs asserting misappropriation claims must be prepared to explain, in sufficient detail, why their alleged proprietary information meets the statutory definition of a trade secret, and cannot rest on generalities (especially when it relates to compilations of information that include both public and private information). This follows the general trend of defendants holding plaintiffs’ feet to the fire in demanding that plaintiffs describe with particularity the trade secrets at issue.
  • The decision also confirms that it is also not enough to show that an alleged trade secret is not generally known in the industry; rather, a plaintiff must show that it cannot be readily discovered through public sources.
  • Additionally, this case highlights the need for employers to carefully draft their restrictive covenants agreements to be only as restrictive as necessary to protect a legitimate business interest. Even NDAs, typically considered the least scrutinized of all restrictive covenants, must still satisfy this basic requirement.
  • Finally, it serves as a cautionary tale that employers cannot simply rest on an assumption that a court will reform an overbroad covenant to render it reasonable. While the First Circuit rested primarily on Puerto Rico’s non-reformation approach, its footnote hints at judicial disapproval and invalidation of excessively overbroad covenants, even in reformation jurisdictions.

TLS Mgmt. & Marketing Servs., LLC v. Rodriguez-Toledo, 2020 WL 4187246 (1st Cir. July 21, 2020).

By Paul Cutrone and Amanda Cavanough

Seyfarth Synopsis: The novel coronavirus pandemic has put a spotlight on the mental health of workers. This blog was originally posted in Seyfarth Australia’s Workplace Law & Strategy blog.

The crisis posed immediate and acute challenges for organisations and workers. In an extremely short period of time, we have all had to navigate periods of isolation and loss of social interactions, new ways of working, constantly changing health messages and much more. The situation is unprecedented in our lifetime. One “silver lining” of the crisis, however, seems to be an uptick in awareness about and action taken in relation to mental health in the workplace.

The government has recognised that Australians need additional resources and support to “flatten the curve” of a mental health crisis while tackling the virus and has implemented a number of measures to achieve this goal.

In the context of work, there has long been an obligation on organisations to ensure, so far as is reasonably practicable, the mental health of workers. Officers of organisations have a duty to take reasonable steps to exercise due diligence to ensure that the organisation complies with its health and safety obligations. Workers themselves also owe a duty to take reasonable care for their own health and safety, and to take reasonable care that their acts or omissions do not adversely affect the health and safety of others. Current guidance from SafeWork Australia points to several psychosocial hazards relating specifically to Covid-19 that need to be considered, including isolated work.

With this in mind, many organisations have stepped up their mental health and wellbeing programs and tailored them to the situation at hand during the Covid-19 lockdown, based on expert guidance and in consultation with workers. We have seen organisations implement some great initiatives including:

  • enhanced Employee Assistance Programs and counselling sessions;
  • free or discounted online meditation, resilience training or yoga;
  • sharing information about the best mental health resources to deal with particular issues affecting workers; and
  • finding new ways to regularly share and “connect” with team members via technology.

Here at Seyfarth, the firm has implemented a range of measures to combat isolation, stress and anxiety. For instance, partnering with the Resilience Project to deliver a 10 part digital wellbeing series. As employees of the firm, we have found the evidence based practical strategies about nutrition, exercise and stress extremely useful and will continue to apply them as “normal” life resumes.

As restrictions ease and the return to work process begins, many risks to health and safety may remain. Until there is a solution to the health crisis in the form of a cure or vaccine, those that can work from home will likely continue to do so and office spaces will not look or operate in the way they did previously. However, every workplace has a different risk profile. It will be important to adopt a risk management based approach and continue to innovate and tailor solutions to the needs of your workforce even as we return to “normal” work. We are excited to see how Australian workplaces continue to lean into this challenge.

Those with questions or concerns about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of Seyfarth Shaw’s International Employment Law or Labor & Employment Teams.

Seyfarth Synopsis: Today we will begin posting a monthly summary of our employment law blogs, as a way to keep you connected and aware of our latest thought leadership. As always, readers are encouraged to reach out to our authors with any comments or questions raised from the blog.

Heat Illness – A Phantom Menace: Sweatt Blogs on Safety Measures and Heat Illness in the Workplace

Seyfarth Synopsis: OSHA Administrator Loren Sweatt recently blogged related to heat illness in the work place as “forecasters are calling for above-average heat in some parts of the country and scorching temperatures in July and August.” Sweatt suggests six items to keep in mind as employers prepare for a hot summer.

EEOC Update: The Commission Announces Two New Pilot Programs For Conciliation And Mediation Processes

Seyfarth Synopsis:  On July 7, 2020, the EEOC announced in a press release two new six-month pilot programs aimed at increasing voluntary resolutions of discrimination charges. One of the new programs seeks to increase the effectiveness of the conciliation process at the Commission, and the other will create more opportunities to resolve matters through the EEOC’s popular mediation process. The details of the EEOC’s latest programs are a critical “must read” read for all employers dealing with EEOC charges.   

Boy, I Need a Vacation: FAQs Regarding Employee Travel and PTO

Seyfarth Synopsis: Between states reopening and summer vacation beginning, employers have wondered what say they have over their employees’ use of PTO. Below are some of most frequently asked questions from employers about employee vacation in light of the pandemic.

OSHA Updates FAQs on Face Masks in the Workplace

Seyfarth Synopsis: The Occupational Safety and Health Administration (OSHA) has updated its frequently asked questions and answers to advise employers about the use of face masks in the workplace.

Happy Birthday to Us! Employment Law Lookout Blog’s Seventh Year Anniversary – A Look Back at our Top Posts

Seyfarth Synopsis: Seven years ago today The Employment Law Lookout Blog launched its twice weekly publications. Now as we enter a new year — we wanted to celebrate this milestone by taking a look back at our seven most popular posts of “all time.”  (As compiled by our marketing team and based on number of hits/reads.) But first — and because this has always been a team effort — to all of our authors we say “good job and well done.” To all of our readers we say “thank you — very much” for following the ELL Blog. We look forward to continuing to bring you the latest and the best thought leadership blogs on employment law and liability issues and equally exciting topics! Now…. Who wants cake?

Seyfarth Team Launches Part 2 of its ADA 30: 30 Tips for 30 Years Video Series

Seyfarth Synopsis: The ADA Title III team launches the second installment of its 3-part video series containing 30 tips for businesses on how to better serve individuals with disabilities. This video covers reasonable modifications to normal policies, practices and procedures.

GoT’s All-Seeing Three-Eyed Raven: The Gig Economy in California

Seyfarth Synopsis: The controversy surrounding AB 5 unveiled a clear need for a new avenue of classifying so-called gig workers to combine the certainty of employee designations with the flexibility of gig jobs. What are the promises of and prospects for a hybrid classification that would provide workers with some employee benefits while also providing workers and companies some of the freedom and efficiencies observed in a gig economy? Can we see what the future will hold? This post explores some possibilities.

Seventh Circuit Affirms Summary Judgment in Disability Suit Where No Evidence that Disability Was “But For” Cause of Position Elimination

Seyfarth Synopsis: In McCann v. Badger Mining Corporation, — F.3d. — (7th Cir. 2020), the Seventh Circuit affirmed summary judgment and held that no jury could conclude that plaintiff’s position would not have been eliminated “but for” her disability.

Blog Series – Managing a Future Tele-Workforce

Seyfarth Synopsis: In part one of a series concerning managing the future tele-workforce, below are some tips to navigate reasonable accommodation requests and monitor the performance of employees who will likely be working remotely in greater numbers in the future.

Updated Massachusetts Guidance Clarifies Lodging Providers’ Responsibility For Ensuring Guest Compliance With Travel Order

Seyfarth Synopsis: As we previously reported, on July 24, Massachusetts Governor Charlie Baker issued an Executive Order announcing a $500 daily civil fine, effective August 1, for individuals traveling into the Commonwealth who fail to comply with the State’s mandatory 14-day quarantine requirement.

By Gerald L. Maatman, Jr., Christopher DeGroff, Matthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis:  On August 3, 2020, the EEOC announced in a press release that it will resume issuing charge closure documents, or “Notices of Right to Sue.” The Commission had previously suspended issuing closure documents as a result of the COVID-19 pandemic in an effort to help preserve the rights of charging parties and employers. The EEOC’s latest announcement indicates that they are pushing to get back to “business as usual.”

On March 21, 2020, the EEOC announced that it would cease issuing charge closure documents, also known as Notices of Right to Sue (“Notices”), in response to the difficulties facing parties in light of the COVID-19 pandemic. Since March, Notices have only been issued upon request of the charging party. As charging parties generally have 90 days from the issuance of a Notice to pursue their claims in court, the suspension of the Notices has meant a downturn in the filing of discrimination and harassment lawsuits against employers over the past several months.

The EEOC’s August 3 announcement now indicates that EEOC managers and supervisors are reviewing charge resolution recommendations and that the EEOC will begin issuing Notices for charges held in suspense and for charge resolutions that occur on and after August 3, 2020.  The Notices that have been held in suspense will be issued over the course of the next six to eight weeks, beginning with those that have been in suspense the longest.  The EEOC has also noted that all Notices will be issued by mail.

Implications For Employers

Now that the EEOC is resuming its issuance of Notices, employers with pending EEOC charges should be on the lookout for Notices closing the charge process to arrive by mail. Once a Notice is issued, a charging party has 90 days from receipt to file their claims in court. Accordingly, employers will also likely see an uptick in discrimination and harassment claims filed in court over the next several months.

This announcement is the latest in a series of high priority press releases issued by EEOC over the past few months. The ongoing changes at the Commission are a must-watch for employers, as they have considerably impacted the charge investigation and resolution processes at the EEOC.

By John Ayers-MannDaniel B. Klein, and Robert A. Fisher

Seyfarth Synopsis: As we previously reported, on July 24, Massachusetts Governor Charlie Baker issued an Executive Order announcing a $500 daily civil fine, effective August 1, for individuals traveling into the Commonwealth who fail to comply with the State’s mandatory 14-day quarantine requirement.

Pursuant to the Order, the Department of Public Health (DPH) issued updated guidance clarifying how out-of-state travelers are expected to comply with the Order. In addition to the DPH Guidance, the State updated its sector-specific guidelines for several sectors to include guidelines consistent with the Travel Order.

In general, the sector-specific guidelines were updated to emphasize an employer’s responsibility to strongly discourage travel to high-risk locations and ensure that employees engaged in business-related travel were aware of and complied with the Order.

Additionally and of particular note for hotels, the guidance for lodging providers added clarity regarding a lodging provider’s responsibilities relative to their guests’ compliance with the new Order. Under prior guidance, lodging providers were urged, but not required, to inform guests at the time of their reservation and check-in of the State’s travel guidance. The updated guidance now requires lodging providers to inform guests at the time they make a reservation and again upon check-in about the out-of-state travel order and the guests’ obligation to quarantine for 14 days after arrival, or until they receive a negative test result, unless they meet an exemption under the Order. The new sector-specific guidance also encourages lodging providers to post signage on their websites and near their check-in desks with information about the State’s requirements for out-of-state travelers. Importantly, the updated guidance stops short of requiring lodging providers to monitor and enforce the self-quarantine requirements imposed by the Order.

In addition, the updated sector-specific guidance for indoor and outdoor events urges event venue operators to notify their clients of the Order, encourage their clients to inform out-of-state guests of the Order, and post information on their website about the requirements for out-of-state travelers.

We will continue to keep you apprised of any other significant developments in or changes to the Commonwealth’s sector-specific guidelines

Those with questions or concerns about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of Seyfarth Shaw’s Labor & Employment Team.

By Christina Jaremus, Patrick D. Joyce, Louisa Johnson, and Katherine Mendez

Seyfarth Synopsis: In part one of a series concerning managing the future tele-workforce, below are some tips to navigate reasonable accommodation requests and monitor the performance of employees who will likely be working remotely in greater numbers in the future.

Despite a recent spike in COVID-19 cases around the country, especially in the West and Southeast, states continue to give employers a green light to begin re-staffing their physical offices. However, pandemic preparedness has spurred a monumental shift from physical offices to remote workforces that many believe may be here to stay. Downsizing office space and offering employees the option to work remotely as a permanent alternative eliminates the time and money spent commuting to a physical office each day, saves employers office space expenses, simplifies employee health and safety, and, overall, affords employees more control over their own time. But managing a tele-workforce comes with its own challenges that implicate accommodation laws, workers’ compensation and safety laws, and wage-hour laws, among others.

Future blogs in this series will discuss key issues regarding workers’ compensation and safety that should be considered for a tele-workforce; wage-hour considerations, such as tracking and paying for remote worktime, tracking meal and rest breaks of non-exempt tele-workers, and reimbursable business expenses for remote workers; and finally, technology applications for remote workers, such as data privacy, employer network control, and employee surveillance.

Part One:  Reasonable Accommodations and Performance Management

A.  Determining Which Employees Should Be Permitted to Tele-Work

If physical presence in the office is an essential function of an employee’s job, an employer is generally not required to permit the employee to work remotely as an accommodation. But the shift to tele-work spurred by the pandemic will result in employers likely facing in the future a growing number of requests to work from home as accommodations for disabilities.

Before deciding to deny these requests based on the assertion that physical presence in the workplace is an essential job function — particularly if all or part of the Company’s workforce managed (and maybe even flourished) working remotely over the past several months — employers may want to reevaluate the essential functions of these positions to make sure this argument still holds water.

While employees are still quarantined at home, employers should take some time to clearly document which positions are not capable of being performed effectively from home based on specific problems and performance issues that may have arisen during the mandatory stay-at-home period. This documentation will help to bolster the employer’s position that certain requests to work from home are not reasonable in the long-term future because they were tested during the quarantine and could not be performed with success remotely.

B.  Home Office Equipment for Tele-Workers

If an employer provides special office equipment to employees who meet the ADA’s definition of disability, the employer may be hard-pressed to argue that offering the same accommodation to an employee working from home is not reasonable. For example, providing an ergonomic chair or keyboard necessitated by an employee’s disability would likely be a reasonable accommodation whether the employee is working from home or in an office.

In addition, though not mandated by the Occupational Safety and Health Administration, employers may want to consider the health and safety and productivity benefits of ensuring employees have an ergonomic home workspace. We will discuss these issues in more detail in one of our upcoming blogs in this series.

C.  Flexible Work Schedules And Performance Management for Tele-Workers

Other reasonable accommodation requests may be more complicated to administer when an employee is working remotely. For example, if an employer provides alternative work schedules, and some flexibility in those schedules, to employees working in an office, supervisors can easily monitor the time the employees are actually working by monitoring the employee’s physical presence in the office.

To ensure accountability of employees working in a remote environment, it becomes more important to have a defined work schedule, even if it is an unusual schedule that has large periods of non-working time during the day and contains working periods after standard business hours. For non-exempt (i.e., overtime eligible) remote workers who “clock in” and “clock out” in an electronic timekeeping system, the time records can be used to verify that the tele-worker is adhering to the agreed-upon schedule.

For those remote employees, such as exempt-classified workers, whose adherence to the agreed-upon work schedule cannot be monitored through detailed timekeeping records, employers may want to consider asking employees to regularly or periodically submit work logs to demonstrate that they are meeting expectations concerning their periods of availability and overall work hours.

Another way to monitor productivity is to ask employees to consent to the installation of software to monitor their productivity. As Axios author Erica Pandley discussed in her article 1 Big Thing: Surveilled at Work, many companies “have asked their newly remote employees to install software that tracks their mouse movements or keystrokes or which webpages they visit as a way  to ensure they’re being productive…”  Employees’ attitudes towards such surveillance may be less antagonistic in exchange for flexibility, freedom, and safety assurances associated with being permitted to work remotely. Of course, for some employers, such personal monitoring may clash with the company’s culture or be viewed as too detrimental to employee morale. Thus, this is an option to consider in the context of your specific company’s culture and workforce.

Another option that should be more universally feasible is active performance management. With employees in an office environment, supervisors often use regular meetings or one-on-one time to assess whether employees are meeting goals. With remote employees, this can be more easily overlooked. Therefore, supervisors should be vigilant about scheduling regular face time with their remote employees to ensure they are staying up to date with positive (and negative) employee performance. And management should consider whether there are alternative more metrics-driven key performance indicators that could be used in evaluating employees’ performance. Where it makes sense, more data-based metrics allow employee performance to be measured objectively so that performance of remote employees is gauged on the same accountabilities as employees who are regularly in the office.

In parts two and three of this series, we will provide thoughts about workers’ compensation and safety issues that should be considered for a tele-workforce and wage-hour considerations, such as tracking and paying for remote worktime, tracking meal and rest breaks of non-exempt tele-workers, home office health and safety, and reimbursable business expenses of remote workers.

Those with questions or concerns about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations or Workplace Policies and Handbooks Teams.

By Samantha L. Brooks and Erin Dougherty Foley

Seyfarth Synopsis: In McCann v. Badger Mining Corporation, — F.3d. — (7th Cir. 2020), the Seventh Circuit affirmed summary judgment and held that no jury could conclude that plaintiff’s position would not have been eliminated “but for” her disability.

In McCann, the plaintiff alleged that she had been discriminated against on the basis of age and disability when her former employer eliminated her position in October 2015 and failed to accommodate her. The District Court granted the employer’s motion for summary judgment on all counts.  Plaintiff appealed only her claim that her position was eliminated because she was disabled.

Plaintiff was employed by Badger Mining Corporation’s (Badger) predecessor, Atlas Resin Proppants (Atlas), as a laboratory technician in the research and development laboratory.  Plaintiff’s performance reviews for the years 2013 and 2014 were acceptable, but her supervisors noted some shortcomings, including dealing with conflict, communication, and dispute resolution. Badger merged with Atlas in April 2015. After the merger, Plaintiff was assigned and trained to perform “batch mixing.” Shortly thereafter, however, it was determined that Plaintiff was not satisfactorily performing her batch mixing responsibilities and another employee was assigned to perform batch mixing.

In September 2015, Plaintiff sought treatment for pain and numbness in her hands. On September 21, Plaintiff emailed her supervisor and human resources, stated that she had been diagnosed with two different conditions, and that she would require time off for additional follow-up tests, appointments, and possibly surgery. This email was the first notice to Badger about plaintiff’s hand conditions.

Unbeknownst to Plaintiff, in the late summer and early fall of 2015, Badger had been exploring cost-cutting measures and other measures to increase efficiency. Ultimately, Badger determined that 33 positions across three different facilities needed to be eliminated, including one position in the research and development department where plaintiff worked. The head of the research and development department, after reviewing the plaintiff’s performance reviews from 2013 and 2014, and based on her own knowledge and observations of plaintiff’s performance, including the difficulties plaintiff had with batch mixing, decided that plaintiff’s position would be eliminated. Plaintiff was notified on October 26, 2015.

The Seventh Circuit held that plaintiff failed to establish that her position would not have been eliminated and she would not have been terminated “but for” her disability, and that she failed to establish that defendant’s explanation for elimination of her position was pretext for disability discrimination.

Specifically the Court noted that, although plaintiff disputed the negative assessments of her performance, her supervisor’s belief that the performance was poor “was genuinely held.” Additionally, the record supported defendant’s contention that one co-worker was retained instead of plaintiff because plaintiff struggled with mixing batches of materials required for plaintiff’s department, while the co-worker could mix batches without need for detailed instructions and constant guidance.

Importantly, while plaintiff first disclosed the date of her hand condition close in time to the date of her termination, this “suspicious timing,” alone, did not defeat summary judgment where the need for cost cutting measures and position eliminations was being discussed prior to plaintiff’s disclosure.

Employer Takeaways

Document, document, document! Employers must remember to document performance deficiencies or mistakes. If employers need to justify a personnel action or if litigation ever arises, it will be important to have a contemporaneous record of performance issues.

Those with questions or concerns about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of the Labor & Employee Relations or Workplace Policies and Handbooks teams.

By Scott P. Mallery

Seyfarth Synopsis: The controversy surrounding AB 5 unveiled a clear need for a new avenue of classifying so-called gig workers to combine the certainty of employee designations with the flexibility of gig jobs. What are the promises of and prospects for a hybrid classification that would provide workers with some employee benefits while also providing workers and companies some of the freedom and efficiencies observed in a gig economy? Can we see what the future will hold? This post explores some possibilities.

In the exceptionally popular Game of Thrones series, the third eye of the indispensable Three-Eyed Raven symbolizes perception beyond ordinary sight, or a third way. This need for future thinking and a third way has become increasingly more important in California when it comes to worker classifications.

By now, everyone knows all about AB 5: its legacy, its controversy, the numerous legislative exceptions it has inspired, the myriad court battles it has provoked, and the responsive initiative that has qualified for the November 2020 ballot. Indeed, not only have we written extensively on the measure, we also have our own tag dedicated exclusively to the issue. So what is the future of the gig economy in California? Is there a workable “third” way of classifying workers in the gig sector. While answering that question requires prescience beyond the mortal ken, we will put on our best “Three-Eyed Raven” hat to foresee some possible roads the future of the gig economy may take.

“I Have Been Many Things. Now, I Am What You See”—Piecemeal Legislative Changes

Many California gig businesses maintain they cannot survive if they must classify their drivers as employees under AB 5. The measure’s author, Lorena Gonzalez, insists the bill is not so bad for business. But if so why, then, are there a variety of stand-alone bills that would provide exemptions for at least 16 different industries?

Is a scattershot approach to legislation really the best solution? And must we choose between (a) dismantling the ABC test and AB 5 and (b) leaving AB 5 in place to require that all gig sector employees be classified as employees? Is there instead a third way—a hybrid classification that would provide the flexibility of the gig economy while ensuring that workers reap at least some benefits of employee status? This elusive third way has been discussed for years, but the controversies over AB 5 controversy may finally force the issue.

Meanwhile, the pandemic and the government’s response thereto—through the CARES Act and otherwise—may have played its own part in forcing the issue. The pandemic left gig workers particularly vulnerable, as independent contractors are normally ineligible for unemployment compensation. But the CARES Act gave them eligibility, limited by prior earnings.

“It Is Beautiful Beneath The Sea. But If You Stay Too Long, You’ll Drown”—Making A Dramatic Change

Drastic legislative changes to the employment marketplace have precedents. Industrial-era jobs were transformed during the Industrial Revolution when labor unions were empowered to negotiate for higher wages, shorter hours, and safer working conditions. Many believed these changes were too radical, but we’ve become accustomed to them. We may have seen a modern analog when the House passed the historic, $3 Trillion HEROES Act, which would make fundamental changes in the workplace.

“Look For Me…Beneath The Tree…North!”—Elusive “Third Way” Of Classifying Workers

So what would a “third classification” look like? One legislative option is SB 1039, authored by Senator Cathleen Galgiani. SB 1039 would “develop a modern policy framework that facilitates independent work for those who voluntarily choose it by creating a third classification of workers with basic rights and protections relative to work opportunities.” The stated rationale is that AB 5 has made it “increasingly obvious that a binary system for classifying workers as either independent contractors or employees is outdated and inapposite of the current reality of the labor market and work opportunities presented in the gig economy and the desire of workers seeking flexible working conditions.”

Despite SB 1039’s stated intentions, its substance has yet to take shape. Those crafting the measure might look to New York’s Freelance Isn’t Free Act, which took effect in May 2017. The Act requires an employment-type contract whenever a freelancer completes $800 worth of work, and provides freelancers with additional monetary remedies if a hiring party tries to avoid paying. The Act establishes a complaint procedure to be administered by the City and provides for a private right of action.

The Act does not, however, provide the employee benefits AB 5 does—such as a minimum wage, workers’ compensation, unemployment insurance, paid sick leave, and paid family leave. To address these concerns, SB 1039 could be amended to include such protections without going so far as pulling gig sector workers out of the IC designation and imposing on companies all the cascading Labor Code burdens that come along with an “employee” designation. For example, an amendment could tie benefits to hours worked, or to certain duties performed, or some combination of both.

“You Will Never Walk Again, But You Will Fly”—The Future Of Work

SB 1039 also refers to Governor Newsom’s Future of Work Commission, established via executive order. Although the pandemic has paused the Commission’s work, the Commission previously explored models to improve access to benefits tied to employment (e.g., paid time off, healthcare, training) for workers who have been excluded from certain benefits. Subjects that the Commission has investigated include portable benefits models and small groups that contribute to a centralized organization that provides access to benefits. Indeed, portable health benefits is one potential solution the Tech sector has suggested to ensure that gig workers have access to medical benefits. Once the Commission returns to work, its progress will be a good barometer for the future of the gig economy in California.

Undoubtedly, gig companies provide services that many consumers want, and many Californians want the flexibility these gig jobs offered prior to enactment of AB 5. In light of these realities, we hope to see the California Legislature find that sweet middle ground that promises some of the benefits of an employee classification while allowing for the flexibility typically associated with gig professions.

“The Time Has Come…Leave Me!”—Workplace Solutions

So what should employers consider, given the uncertain future of gig workers? Employers that use independent contractors must be sufficiently agile to adapt to a new classification—one that could cause additional administrative duties, but one that would also save resources and create efficiencies. With change likely to come, employers should be reviewing their practices regarding independent contractors to ensure they are in line with AB 5 now, and to prepare for legislative change. Just as the Three-Eyed Raven must move from mortal body to mortal body, employers must also be prepared to adapt to a potential third way of classifying workers.

Edited by Michael Wahlander