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Law

Employers, Take Notice

By John S. Gannon, Esq.

 

John Gannon

John Gannon

A few weeks ago, Starbucks was in all the employment-law headlines, but not for good reasons. Given the publicity, you may have heard about the case of former Starbucks employee Shannon Phillips, who worked in the Philadelphia area. Phillips was a white Starbucks employee who claimed she was fired because of her race. The jury agreed and ordered the coffee giant to pay her $25.6 million in damages.

What you may not have heard about was a more local case in which a Massachusetts employee was awarded more than $24 million by a jury who found she was discriminated against because of her mental health. Here are some details about those two cases, followed by some commentary on what these employers could have done to possibly avoid the massive judgments.

 

Phillips v. Starbucks Corp.

Shannon Phillips, who is a Caucasian female, began her employment with Starbucks in 2005. She started at the company as a district manager and was promoted in 2011 to regional director of Operations for ‘Area 71,’ which included all stores in Philadelphia and several suburbs near the city. On April 12, 2018, a Starbucks location in Philadelphia made national news when two African-American patrons who were having a business meeting there were arrested for trespassing. The event sparked protests throughout the Philadelphia area.

“Employers cold to the idea of reducing legal risk by paying severance ought to be mindful of cautionary tales about the penny-wise but pound-foolish.”

Starbucks later reached a settlement with the two men and issued a public statement that “Starbucks will continue to take actions that stem from this incident to repair and reaffirm our values and vision for the kind of company that we want to be.” Because she was the regional director of Operations for the Philadelphia area, Phillips was called upon by Starbucks leadership to support and implement their post-incident efforts. According to Starbucks, however, she displayed poor leadership and “failed to perform the essential functions of her role as regional director” after the April 2018 incident. As a result, she was fired.

Phillips sued Starbucks for race discrimination, saying her Caucasian race played a role in the decision to terminate her employment. In her complaint, Phillips said she “worked tirelessly” to help Starbucks repair its image after the event in Philadelphia, but that the chain’s attempts to repair community relations resulted in discrimination against white employees. The jury agreed and awarded her $25.6 million, which was mostly comprised of punitive damages (damages assessed in order to punish a defendant when the behavior is found to be especially harmful or malicious).

 

Menninger v. PPD Dev., LP

Dr. Lisa Menninger worked as the executive director of a global laboratory-services company. Her job included operational leadership, business development, research and development, and quality-assurance functions for optimal performance within the labs.

In December 2017, Menninger met with her supervisor to discuss her performance. During this meeting, her supervisor suggested that her role would become more visible, involving increased client visits, social interactions, and presentations. This change did not sit well with Menninger. The prospect of making her more visible, with increased client visits and social interactions, caused great distress resulting in “increased anxiety with somatic symptoms.”

About a month after meeting with her supervisor, Menninger disclosed (for the first time) that she suffered from generalized anxiety disorder that includes social anxiety disorder and panic attacks. She then submitted medical documentation noting that changes to her role would increase her anxiety and make it “substantially more difficult, if not impossible” to perform her job.

In response, the business did exactly what it was supposed to do. The company communicated with Menninger’s medical provider and asked the doctor to specifically address how and to what extent Menninger could perform each task. Her doctor responded, saying Menninger could perform most job duties with some accommodations. For example, for internal and external sales presentations, she could develop the slides and other materials, but required someone else to present to the audience. Similarly, for client meetings, she could be responsible for problem solving and idea generation, but she could not attend the meetings herself. The company ultimately determined this arrangement would not work. Menninger subsequently went out on an eight-month leave of absence, which culminated in termination of her employment.

She sued her former employer for disability discrimination, claiming (among other things) that the company broke the law when it refused to provide the reasonable accommodations she requested. The jury sided with Menninger and awarded her a whopping $24 million, consisting of approximately $1.5 million in lost wages, $5.5 million in front pay (an estimate of future lost wages had she remained employed by the company), $5 million for past emotional distress, $2 million for future emotional distress, and $10 million in punitive damages.

 

Bottom Line

Massive judgments like these can leave employers scratching their heads (or, more likely, pounding their fists). One way to potentially avoid these runaway jury verdicts is to use employment agreements that require employees (and employers) to go to private mediation and arbitration to resolve employment-related disputes, rather than going to trial.

Another option is an agreement between employee and employer that, if any dispute goes to court, the case will be heard by a judge, rather than a jury. These agreements are commonly referred to as jury-trial waivers. They are lawful, but businesses should use experienced labor and employment counsel to help put the agreements in place.

Another way to avoid costly litigation is to work out a mutually agreeable separation agreement with departing employees. Yes, this will involve paying severance to folks who may not be the best performers, but in exchange, you get a release of claims from the employee and an agreement not to sue the company. Employers cold to the idea of reducing legal risk by paying severance ought to be mindful of cautionary tales about the penny-wise but pound-foolish.

Finally, it goes without saying that, any time a business is facing a risky firing, outside counsel should be engaged to discuss the situation and the best way to move forward.

 

John Gannon is a partner with the Springfield-based law firm Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including family and medical leave laws, the Americans with Disabilities Act, the Fair Labor Standards Act, and the Occupational Health and Safety Act; (413) 737-4753; [email protected]

 

Law

Five Important Things to Know Going into 2023

By Amelia J. Holstrom, Esq. and John S. Gannon, Esq.

 

Massachusetts employers are used to the ever-changing employment-law landscape. As we close out another year and ring in a new one, it is clear that 2023 will bring new challenges and new requirements for employers throughout the Commonwealth.

AMelia Holstrom

Amelia Holstrom

John Gannon

John Gannon

We’ve rounded up the top five things employers need to know and keep an eye on as we turn the page to 2023.

 

Decision on Micro-units May Be Troubling for Employers

When a union attempts to organize a group of employees at a business, it files a representation petition with the National Labor Relations Board (NLRB), identifying the proposed bargaining unit, which is the group of employees the union seeks to represent and who will be eligible to vote on whether it gets to do so. Sometimes, employers will seek to add additional employees to the union’s proposed bargaining unit, as larger proposed bargaining units may be favorable for employers in representation elections.

In a recent decision, American Steel Construction, the NLRB, which interprets and enforces the National Labor Relations Act (NLRA), gave a powerful tool to unions by clearing the way for small bargaining units, often called ‘micro-units.’ Specifically, the board decided that it will approve a smaller subdivision of employees as a bargaining unit if they meet certain criteria.

Under this standard, unions are likely to be very successful in getting the NLRB to approve micro-units. As a result, employers are placed at risk of having to bargain with several small units of employees in one workplace.

 

NLRB to Surveil Employers’ Surveillance Measures

Businesses regularly monitor employees in the workplace. For example, employers may monitor telephone calls for quality-assurance purposes, install cameras in the workplace or dashcam systems in vehicles, or monitor communications sent and received on employer-owned devices. Such monitoring appears be under attack by the NLRB.

In early November 2022, the general counsel of the NLRB issued a memorandum regarding employee surveillance, in which she urges the NLRB to adopt a “new framework” for determining whether employer surveillance violates the law. Under this framework, violations may occur when the surveillance would tend to interfere with an employee’s rights under the NLRA or “prevent a reasonable employee from engaging” in activity protected by the NLRA.

“In a recent decision, American Steel Construction, the NLRB, which interprets and enforces the National Labor Relations Act (NLRA), gave a powerful tool to unions by clearing the way for small bargaining units, often called ‘micro-units.’.”

This could involve employee surveillance of suspected organizing activity. The employer will then get the opportunity to explain their legitimate, business-based reasons for the surveillance. At that point, the new proposed framework would require the NLRB to weigh the employer’s business needs for the surveillance against the rights afforded to employees under the NLRA. If the NLRB determines that the employer’s reasons outweigh the rights of employees, the NLRB will require the employer to disclose all electronic monitoring, the reasons for doing so, and how the employer uses the information it obtains. This crackdown on employee surveillance impacts unionized and non-unionized workplaces alike.

 

Update That Handbook for New Protected Characteristics

Massachusetts law prohibits employers from discriminating against employees based on a number of protected characteristics, including but not limited to race, color, sexual orientation, and gender identity. Effective Oct. 24, 2022, Massachusetts added natural and protective hairstyles to the list of protected characteristics under the law.

Accordingly, employers need to update their handbooks and other policies to reflect the additions. Your handbook should also include language on many other employment laws, including the state Paid Family and Medical Leave Act.

 

Changes to Paid Family and Medical Leave

Speaking of the Massachusetts Paid Family and Medical Leave Act, last month the Department of Family and Medical Leave released updated model notices reflecting new contribution rates effective January 1, 2023. If you have not already done so, those new notices need to be distributed to your entire workforce as soon as possible. Employers should also ensure that their payroll providers are planning to implement this change.

The department also updated the mandatory PFML workplace poster, which should be posted in a location where it can be easily read by your workforce. The poster must be available in English and each language which is the primary language of five or more individuals in your workforce, if these translations are available from the department.

The department is also considering changes to the PFML regulations intended to clarify employer obligations to maintain employment-related health-insurance benefits while employees are out on leave. Stay tuned in 2023 for developments on these proposed regulations.

 

Speak Out Act Requires Changes to Employment Agreements

On Dec. 7, 2022, President Biden signed the Speak Out Act into law (see story on page 27). The new law prohibits employers from including non-disclosure and non-disparagement provisions applicable to sexual-assault and sexual-harassment allegations and claims in agreements executed before the allegation or claim arises. It does not impact agreements with those provisions entered into after such a claim arises.

Although it may seem insignificant because it only applies to pre-dispute agreements, employers need to carefully review their confidentiality, employment, and other agreements executed by employees and ensure that the non-disclosure and non-disparagement paragraphs in those agreements do not prohibit the employee from disclosing or discussing sexual-assault or sexual-harassment allegations or claims. Employers would be prudent to include language carving out those claims.

Businesses are encouraged to continue to consult with counsel regarding these changes in labor and employment laws. The team at Skoler Abbott also wishes readers a happy and prosperous new year.

 

Amelia Holstrom and John Gannon are attorneys at Skoler, Abbott & Presser, P.C. in Springfield; (413) 737-4753; [email protected]; [email protected]

Law Special Coverage

An Employment-law Roundup

By Marylou Fabbo, Esq. and John S. Gannon, Esq.

Here is a quick review of a noteworthy new employment law that was signed by President Biden earlier this month, along with a summary of two significant cases that impact businesses in Massachusetts and beyond.

 

Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act

On March 4, the president signed a new law that will prohibit agreements between employees and their employers that required them to settle sexual-harassment disputes by arbitration. For those who do not know, an arbitration agreement requires the people who signed the agreement to resolve any disputes by binding arbitration, rather than in court in front of a judge and jury. Employers often require employees to sign arbitration agreements at the beginning of their employment, but will no longer be able to enforce these agreements if an employee alleges they were sexually harassed.

Marylou Fabbo

Marylou Fabbo

John Gannon

John Gannon

“Forced arbitration silences survivors of sexual assault and harassment,” Vice President Kamala Harris said about the new law. “It shields predators instead of holding them accountable and gives corporations a powerful tool to hide abuse and misconduct.”

The law applies retroactively, meaning it applies to agreements signed before March 4. This means employers should revise old arbitration agreements to remove references to sexual-harassment claims. The new law does not impact cases that are already in arbitration, nor does it prohibit mandatory arbitration agreements in employment disputes that do not involve sexual-harassment allegations, such as race- or religious-discrimination claims, or disputes over payments of wages.

 

U.S. Supreme Court Decision Blocking Vaccine Directives

As many readers are likely aware, earlier this year, the U.S. Supreme Court ruled against the Biden administration in the back-and-forth legal battle over the OSHA ‘shot-or-test’ rule that required larger employers to put policies and procedures in place to ensure employees get vaccinated against COVID-19 or undergo weekly testing.

Does that mean employers do not have to worry about taking steps to protect workers against COVID? Absolutely not. Although OSHA announced it was withdrawing the shot-or-test rule in light of the Supreme Court’s decision, OSHA “strongly encourages vaccination of workers against the continuing dangers posed by COVID-19 in the workplace.” The agency also announced it will continue its COVID enforcement efforts through the “general duty clause,” which is a catch-all provision that allows OSHA to cite employers for failing to provide a work environment free from recognized hazards.

In order to protect against citations and fines from OSHA, employers should implement workplace-safety policies aimed at stopping the spread of COVID. This includes masking requirements consistent with CDC guidance and protocols that require employees to notify their employer immediately if they test positive for COVID. Finally, if employers want to mandate that employees get vaccinated and boosted, that is perfectly fine, as long as exceptions are made for employees who cannot get vaccinated for medical or religious reasons.

 

In Massachusetts, New Employee Protection Against Retaliation

Earlier this year, the Massachusetts Supreme Judicial Court (SJC) ruled that employees who contradict negative information in their personnel files may be protected against unlawful retaliation. The case stems from an employee who disagreed with his supervisor’s assessment of his performance issues, so he wrote a lengthy rebuttal to be included in his personnel file. The very same day, he was fired. The employee sued, claiming he was wrongfully discharged for writing a rebuttal to negative comments in his personnel file.

Like the employee in this case, most employees in Massachusetts are employed at will, which means they can be terminated for any reason (or no reason) as long as the reason does not violate a statute or other established rule of law, such as laws against discrimination. Prior to this recent case, the SJC had recognized a few narrow exceptions to this general rule based on certain public-policy interests, including the assertion of a legally guaranteed right. Under Massachusetts’ Personnel Records Law, employees have the legal right to respond in writing.

While the SJC has been reluctant to limit employment at will, it concluded that the right to rebut negative information in a personnel file is of considerable public importance. It relates not just to someone’s current employment, but also their ability to seek other employment. It assists potential employers in making informed hiring decisions, “thereby preventing terminated employees from becoming public charges.” In the SJC’s view, having a complete personnel file — reflecting both sides of an issue — also facilitates the evaluation of an employer’s compliance with the Commonwealth’s many other employment laws, including those that require timely payment of wages and forbid discrimination in the workplace.

This decision recognizes a new legal claim that a terminated employee can bring in court against their former employer. Obviously, this creates a new source of potential liability for employers. But it also creates a new source of protection for employees, and as a result, it may incentivize employees to exercise their right to file rebuttals more often, especially when their performance has been poor or they have other reasons to suspect that their employment is not secure. This makes it all the more important for employers to be diligent about performance management, as creating a documented record of performance problems (and efforts to address them) before pulling the trigger on termination is the best way to defend against any wrongful-termination claim.

 

Marylou Fabbo and John Gannon are attorneys at Skoler, Abbott & Presser, P.C. in Springfield; (413) 737-4753; [email protected][email protected]

Law Special Coverage

What Can Business Owners and Managers Expect in 2022?

This past year was a busy one on the employment-law front, with a number of new measures and mandates for employers to follow and some emerging trends, such as unionizing activities, to watch. As the new year dawns, these matters will continue to be at the forefront, and obviously bear watching.

By John S. Gannon, Esq. and Meaghan E. Murphy, Esq.

Last year, we saw legislators and employers trying to pivot from COVID-19 safety measures to more traditional labor and employment-law issues. However, with the Delta and Omicron variants wreaking havoc across the globe, businesses and lawmakers are once again looking for ways to stop the spread of the pandemic. Here are some labor and employment highlights from 2021 that are sure to impact employers in 2022.

John Gannon

John Gannon

Meaghan Murphy

Meaghan Murphy

Employer Vaccination Mandates

In September 2021, President Biden signed several orders requiring federal employees, federal contractors, and most healthcare workers across the country to be vaccinated against COVID-19. He also instructed OSHA to develop an emergency temporary standard directing private employers with 100 or more employees to implement COVID-19 vaccine mandates or require weekly testing for their unvaccinated employees. These mandates have been challenged in courts around the county, with varying results. For example, in early December, a federal court in Georgia issued a countrywide stay of the federal-contractor vaccine mandate.

The OSHA ‘shot-or-test’ rule was similarly blocked by one court late last year, but a few weeks later, a different court ruled in favor of the Biden administration and reinstated the emergency standard. It appears the U.S. Supreme Court will have to sort all of this out, and we expect they will rule on these issues early in 2022.

“Unionization campaigns at some of the country’s largest companies have been heating up.”

Here in the Commonwealth of Massachusetts, state mandates are in place for employees working in long-term care and assisted living, certain home-care workers, and executive-level state workers (including law enforcement). Legal challenges to the vaccine mandates were filed in Massachusetts courts, but to date all of them have failed.

 

Accommodations to Vaccination

In October, the Equal Employment Opportunity Commission (EEOC) released guidance making it clear that all employers, regardless of size or industry, can require that employees receive the COVID vaccine. There is one big caveat: federal and most state laws require employers to provide reasonable accommodations for religious beliefs, disabilities, or pregnancy-related reasons. These are commonly referred to as medical and religious exemptions. Employers that are considering a mandatory vaccination program should have policies explaining how these exemptions work, as well as exemption forms ready for employees to fill out.

 

Biden Administration’s Support for Unions

In June, President Biden appointed Jennifer Abruzzo as the National Labor Relations Board’s (NLRB) new general counsel. She quickly made clear her (and the new Democratic administration’s) pro-labor stance on various issues through a series of memoranda issued by her office. Not surprisingly, Abruzzo has vowed to undo much of the NLRB’s activity under former President Trump, which tended to be pro-business.

Unionization campaigns at some of the country’s largest companies have been heating up. Employees at a Starbucks in Buffalo, N.Y. voted to unionize. Starbucks has agreed to sit down at the table and bargain with the union. This is the first time organized labor has gained a foothold in one of Starbucks’ U.S. locations, but it certainly does not seem like it will be the last. Employees at Starbucks in several other states, including Massachusetts, Washington, and Arizona, are also seeking to unionize.

In addition, employees at an Alabama Amazon warehouse recently voted not to unionize, but the union trying to organize those employees alleged that Amazon intentionally interfered with its union-organizing efforts. In one of its biggest actions under President Biden, the NLRB announced that Amazon had committed to allow more room for employees to conduct union activity and to send an e-mail directly to current and former employees to inform them of their labor rights. It is the clearest example to date of how Democratic officials in this administration will seek to use federal power to help employees organize.

 

Paid Family and Medical Leave

Starting Jan. 1, 2022, most Connecticut employees will be able to take paid time off to attend to personal and family health needs. Under the program, employees are entitled to 12 weeks of paid-leave benefits, and up to 14 weeks if an employee experiences a serious health condition that occurs during a pregnancy.

This program is similar to the Massachusetts Paid Family and Medical Leave program, which went live at the beginning of last year. The Department of Family and Medical Leave published data stating that the department approved 43,440 applications between Jan. 1 and June 30, 2021. Benefits totaling $167,915,781 were paid out during this time. This was before employees could take PFML to care for family members, which became available on July 1.

 

Employee Mobility: Tackling the Labor Shortage

A record 4.4. million Americans quit their jobs in September 2021. The high quit rates were commonly dubbed the ‘Great Resignation,’ and made it clear that Americans are switching jobs for better pay, starting their own businesses, or continuing to struggle with child care and school schedules.

As the pandemic lingers, it’s likely that the quit rates will remain high for the next several months. As a result, employers will need to raise wages and/or offer more lucrative benefit packages to attract and retain talent. Businesses should also consider offering employees who do not physically need to be in the office every day some sort of a hybrid work-from-home schedule, a model that has dramatically increased in popularity over the last year.

 

John Gannon and Meaghan Murphy are attorneys at the firm Skoler, Abbott & Presser, P.C., in Springfield; (413) 737-4753; [email protected]; [email protected]

Business Talk Podcast Special Coverage

We are excited to announce that BusinessWest, in partnership with Living Local, has launched a new podcast series, BusinessTalk. Each episode will feature in-depth interviews and discussions with local industry leaders, providing thoughtful perspectives on the Western Massachuetts economy and the many business ventures that keep it running during these challenging times.

Episode 46: Jan. 4, 2021

George O’Brien talks with Amy Royal, a principal with The Royal Law Firm and an employment law specialist

BusinessWest Editor George O’Brien talks with Amy Royal, a principal with The Royal Law Firm and an employment law specialist. The two discuss the pandemic, vaccines, what employers can mandate, and what they can’t. They also discuss changes in employment law and new measures that take effect in 2021, and what employers should know as they turn the calendar. They also dive into in the matter of employee handbooks and how and why these important documents need to be on point and completely up to date. It’s must listening, so join us on BusinessTalk, a podcast presented by BusinessWest in partnership with Living Local.

 

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Law

2019 Employment Law Year in Review

This past year was one that saw a number of landscape-changing developments in the broad realm of employment law. From paid family leave to cannabis to overtime-threshold changes, there were a number of changes to existing laws, new measures to keep track of, and new challenges for employers.

By Maureen James, Esq.

2019 … it’s been real.

Much like politics this year, employment law has experienced quite the roller-coaster ride. So what has this year taught us? Where will we go next? Has anyone really gotten over the Game of Thrones finale? Will 2020 include more Baby Yoda? You know … the important stuff.

This year saw many changes, most of which will really be felt during 2020 and beyond. Even so, those changes have opened dialogue to new and progressive topics that are changing the landscape of employment law. Here is a summary of the new developments, both here in the Commonwealth and nationally.

Paid Family Medical Leave

We cannot write a ‘year in review’ without starting with the Massachusetts Paid Family Medical Leave law (PFML). A lot of attention was given to PFML last year, and rightfully so. This is an institutional change, and all involved have been nervous about its rollout.

As readers are likely aware, PFML is a state-offered benefit that, come 2021, will entitle most Massachusetts workers to take up to 26 weeks of paid leave for medical or family reasons. PFML is funded through a Massachusetts wage tax that is shared by employees and businesses with 25 or more employees.

Last summer, the Department of Paid Leave issued final regulations and rolled out an updated timeline for employers, which included the deadline for notification to employees of Sept. 30, 2019, the commencement of payroll withholdings on Oct. 1, 2019, and information on the application process for private-plan exemptions.

It is clear this will be a hot topic throughout 2020 as employers will start making their quarterly PFML tax contributions and begin preparing for the first round of claims beginning in January 2021.

Marijuana

Medicinal and recreational marijuana went from nowhere to everywhere this year. Commissions, taxes, licensing … there are lots of complicated issues. For employers, many have been trying to balance state and federal law, as well as existing policies and changing culture. Unfortunately, we are not yet at a place were clear policies and practices exist. Over the next year, this will likely be a hot topic as its effects continue to grow — pun intended.

National Labor Relations Board

Last summer, the National Labor Relations Board made some drastic policy shifts in three swift steps. In May, it was announced that it intended to set standards for union activity on employer property. It followed up in June 2019 with a ruling in UPMC Presbyterian Shadyside, where it overturned decades of precedent and determined that employers can ban union organizers from public areas of their private property.

In August 2019, it held in Bexar County Performing Arts Center Foundation that property owners can bar labor protests by off-duty contractor workers unless they work “regularly and exclusively” on the property and there is no “reasonable non-trespassory alternative” for communicating their message. With these large shifts, it will be interesting to see what other areas NLRB reviews and possibly enacts changes to next year.

“This year saw many changes, most of which will really be felt during 2020 and beyond. Even so, those changes have opened dialogue to new and progressive topics that are changing the landscape of employment law.”

Continuing this trend of pro-employer decisions, a few weeks ago the board released a decision overruling a prior case that held that employees have a presumptive right to use an employer’s e-mail system for non-work-related communications, which includes e-mail traffic related to forming a union. The recent decision reconfirmed that an employer has a right to restrict employee use of its e-mail system as long as it is done on a non-discriminatory basis.

Union Fees

In a recent case — Janus v. State, County, and Municipal Employees Council 31, 138 S. Ct. 2448 — the U.S. Supreme Court held that non-union workers cannot be forced to pay fees to public-sector unions. Throughout 2019, this has been a debated topic in Massachusetts. The Legislature passed a law providing Massachusetts’ public employee unions access to contact information for employees, as well as certain allowances to charge fees to non-members.

Gov. Charlie Baker vetoed the law, but in September, he was overridden. As we move into 2020, the effect this law has on union dues and relationships between members and non-members, if any, remains to be seen.

Department of Labor Overtime Threshold Changes

One of the many regulations taking effect at the inception of 2020 includes a boost to the salary threshold for the eligibility of workers to receive overtime under the Fair Labor Standards Act (FLSA). This change will extend overtime protections to currently exempt workers making less than $684 per week (or less than $35,568 per year) and highly compensated employees making less than $2,066 per week (or less than $107,432 per year). This means, before year’s end, employers who employ exempt workers will need to review their compensation (including any non-discretionary bonuses and commissions) to ensure they earn enough to qualify for exempt status as of Jan. 1, 2020.

Non-compete Law

Massachusetts’ new Noncompetition Agreement Act has changed how employers draft, use, and enforce non-compete agreements. The law makes certain types of non-competes flatly unenforceable, and restricts how long and for what reason an agreement can be used in other situations. It also requires consideration (i.e., some sort of payment) to the employee if an employer wants to enforce a non-compete provision. The law has only been in effect a year, so we have not seen the full ramifications of the statute yet.

U.S. Citizen and Immigration Services’ H-1B Visas

March 2020 will bring the official beginning of the spring season, but also the first round of electronic registration for H-1B visas under the fiscal year 2021 cap. H-1B sponsorship is offered by employers in ‘specialty occupations’ that require at least a bachelor’s degree (or the equivalent in education and experience). In this new electronic process, employers seeking H-1B workers subject to the 2021 FY cap will complete an electronic registration that requires only basic information about the company and each requested worker.

The H-1B random selection process will use those registrations, and then the selected registrations from that pool will be eligible to file more detailed petitions for the H-1B visa cap.

2020 … Bring It On

There are only a few things that are certain: death, taxes, and another terrible reality show. However, 2020 most certainly will be a year where many new laws stretch their legs and see their first moments of sun. There will undoubtedly be new issues to confront, but no matter what year it is, you can never be too prepared.

Maureen James is an attorney with Skoler, Abbott & Presser, P.C., one of the largest law firms in New England exclusively practicing labor and employment law; (413) 737-4753; [email protected]

Employment

Checking the Rearview

By Erica E. Flores, Esq. and John S. Gannon, Esq.

Erica E. Flores

Erica E. Flores

John S. Gannon

John S. Gannon

The world of labor and employment law is constantly in flux. As attorneys who practice in this area, our business is to learn and help our clients solve problems in this increasingly complex environment.

So when we reflect on the past year, we ask ourselves how the law has changed for our clients, what new challenges were introduced, and what new guidance we can offer to help businesses navigate these ever-changing waters.

With that in mind, we bring you a summary of last year’s most significant employment-law changes for Massachusetts employers.

Paid Family and Medical Leave Insurance Program

If there is one takeaway from 2018, it is that Paid Family and Medical Leave (PFML) will be a game changer for businesses across the Commonwealth. The new program, which will require tax contributions from employers starting in July 2019, will allow employees to take considerable paid time off — up to 26 weeks per year in the aggregate — in connection with their own medical condition or to care for family members who are suffering from a serious health condition.

Paid family leave is also available to bond with an employee’s newborn or newly adopted child. Employees can begin claiming PFML benefits in January 2021. Employees will be able to collect weekly wage replacement benefits that will vary depending on their average weekly wage. The maximum weekly benefit amount is currently capped at $850 per week, but will be adjusted annually.

“A lot has changed for employers over the past year. Business should be reviewing their practices, policies, and employment-related documents now to be sure they are in compliance with these new laws and regulations.”

Businesses will face substantial new burdens under the new law. In addition to planning for more frequent employee absences, businesses are required to fund the program through a new payroll tax. Employers will have the option to pass a portion of this tax contribution to employees, and smaller employers (fewer than 25 employees) are not responsible for contributing the employer’s share of the tax. A visual breakdown of how the tax will work can be found at www.mass.gov/info-details/family-and-medical-leave-contribution-rates-for-employers. We suspect that this program will be most burdensome for small businesses, which are not well-equipped for extended employee absences.

For those wondering where this significant new legislation came from, the genesis was a bill known as the grand bargain that was passed by the Massachusetts Legislature in June 2018. The bill not only creates the Paid Family and Medical Leave program, but also increases the minimum wage every year for the next five years, gradually eliminates mandatory overtime for retail employees who work on Sundays, and establishes an annual sales-tax holiday weekend.

Non-compete Reform

Also this year, the Massachusetts Legislature passed comprehensive non-compete reform. The law substantially narrows the circumstances under which employers can enter into non-competition agreements with employees, limits all such agreements to a maximum term of one year, and requires that non-competition agreements entered into with existing employees be supported by consideration beyond continued employment. The law also mandates that courts apply certain presumptions that have the effect of narrowing the scope of services and geographic territories employers can seek to protect with a non-compete.

Pay Equity Becomes Law

The amended Massachusetts Pay Equity Law took effect this past July, imposing significant responsibilities on businesses to ensure equal pay to employees of different genders for “comparable” work. And the first lawsuit alleging violations of the amended law was filed just a few days later.

Most importantly, the amended statute provides a broader definition of “comparable work” and limits the acceptable reasons for paying people of different genders differently to just six — bona fide seniority, merit and productivity systems, geographic location, job-related education, training and experience, and required travel. It also prohibits employers from seeking information regarding the salary history of job applicants. Employers hoping to reduce their risk of liability under the pay-equity law can earn the protection of a statutory affirmative defense if they complete a “good faith” self-evaluation of their pay practices, but they must demonstrate “reasonable progress” toward eliminating any wage differentials in order to avoid liability completely, and the defense is only good for three years.

Pregnancy and Related Conditions Are Now Protected Classes

In April 2018, the Pregnant Workers Fairness Act became law in Massachusetts. In addition to adding pregnancy and conditions related to pregnancy (including lactation) as protected classes under the state’s anti-discrimination law, the statute also requires employers to provide reasonable accommodations for an employee’s pregnancy or conditions related to pregnancy unless doing so would pose an undue hardship to the business; prohibits employers from taking adverse action against or refusing to hire someone because she needs, requests, or uses such an accommodation; and prohibits employers from requesting documentation to support certain types of accommodations — specifically, more frequent breaks, seating, lifting restrictions, and a private, non-bathroom space to express breast milk.

As you can see, a lot has changed for employers over the past year. Business should be reviewing their practices, policies, and employment-related documents now to be sure they are in compliance with these new laws and regulations.

John S. Gannon and Erica E. Flores are attorneys with Skoler, Abbott & Presser, P.C., one of the largest law firms in New England exclusively practicing labor and employment law. Gannon specializes in employment litigation and personnel policies and practices, wage-and-hour compliance, and non-compete and trade-secrets litigation. Flores devotes much of her practice to defending employers in state and federal courts and administrative agencies. She also regularly assists her clients with day-to-day employment issues, including disciplinary matters, leave management, and compliance.

Law

Knowledge Is Power

By John S. Gannon, Esq.

John S. Gannon, Esq

John S. Gannon, Esq

As an employment attorney, my job is to help businesses comply with the myriad laws that govern the workplace. No business is immune from workplace problems, and for those who violate employment laws, hefty penalties and damages await.

In order to help businesses avoid these problems, I’ve put together a list five costly employment-practice mistakes we frequently come across, with tips for correction and prevention.

Misclassifying Employees as Exempt from Overtime

Employers are sometimes shocked when they learn that salaried employees might be entitled to overtime when they work more than 40 hours in a week. The shock quickly goes to panic when they are told the salaried non-exempt employee is due several years’ worth of unpaid overtime, and that this unpaid wage amount can be doubled and potentially tripled under state and federal wage laws.

Misclassifying employees as exempt is a common mistake. This is because many employers associate paying a salary basis with no overtime obligation. True, paying employees a salary is typically one part of the test, but there are several other factors to consider during your exemption analysis.

We recommend you work with legal counsel to audit your exempt employee classifications. While you’re at it, consider doing a pay-equity audit to help protect against equal-pay discrimination claims.

Leave-law Headaches

When an employee is out for a medical condition, there are a series of complex and challenging employment laws that need to be navigated. This includes the Americans with Disabilities Act (ADA), the federal Family Medical Leave Act (FMLA), workers’ compensation laws, the Massachusetts Earned Sick Time law, and, coming soon, the Massachusetts Paid Family and Medical Leave law.

These laws have a plethora of traps for the unwary. What do you do when an employee continually calls out in connection with a medical condition? Do your supervisors know what to do if an employee requests several weeks off for surgery? The answers are not always easy, so make sure you know how these laws interact with one another.

Outdated Handbooks and Employment Agreements

Recently, I was reviewing whether a non-compete agreement would be enforceable in court. It turned out the agreement was signed roughly 10 years ago. To make things worse, the last update to the document was pre-Y2K.

The point here is that employment agreements and handbooks should not grow cobwebs. Changes in the law require changes to these documents. For example, Massachusetts enacted significant legislation in October 2018 changing the entire landscape of non-compete law in the Commonwealth. The state also saw the Pregnant Workers Fairness Act take shape in April last year. This new law included a notice requirement that meant an update to the employee handbook was in order.

Having your employment agreements and handbook regularly reviewed by counsel is a good way to stay on top of the constant changes in the employment law world. Remember, if you have not updated these employment documents in a few years, they are probably doing more harm than good.

Failure to Eradicate Harassment at Work

Last year was dominated by headlines spotlighting sexual-harassment scandals and cover-ups. But was the #metoo movement just another fad? The answer unequivocally is ‘no.’

To prove it, late last year the Equal Employment Opportunity Commission (EEOC) published data on workplace harassment claims that revealed a 50% increase in sexual-harassment lawsuits filed by the EEOC when compared to 2017 numbers. The EEOC also recovered nearly $70 million for the victims of sexual harassment in 2018, up from $47.5 million in 2017.

You’ve heard it before, but it bears repeating: businesses need to take proactive steps to create a workplace free from harassment. This involves updating anti-harassment policies and practices, adequately training your workforce, and promptly investigating all harassment complaints.

Lack of Supervisor Training

Most of the mistakes listed above are fertile ground for supervisor slip-ups. Whether they fail to report harassment (or, worse yet, engage in harassing behavior themselves) or discipline an employee who has taken too much sick time, supervisors who don’t know any better are in a position to do considerable damage to your business.

Proper training can alleviate this risk. Plus, a supervisor who spots an issue before it spirals out of control could prevent a costly lawsuit from being filed.

John S. Gannon is an attorney with Skoler, Abbott & Presser, P.C., one of the largest law firms in New England exclusively practicing labor and employment law. He specializes in employment litigation and personnel policies and practices, wage-and-hour compliance, and non-compete and trade-secrets litigation; (413) 737-4753; [email protected].

Law

Navigating Change

Amy Royal

Amy Royal

Amy Royal was taking a calculated risk when she left a stable job in employment law to start her own firm at the start of the Great Recession. But those calculations proved correct, and as her firm marks 10 years in business, she reflects on how her team’s services to clients continue to go beyond legal aid into a business relationship that helps companies — and the local economy — grow.

Many employers, truth be told, don’t think the grand bargain is much of a bargain. And they have questions about how it will affect them.

“Massachusetts tends to be ripe with emerging employment issues, like the grand bargain,” said Amy Royal, referring to this past summer’s state legislation that raised the minimum wage and broadened family leave, among other worker-friendly measures.

“But that’s one of the things I enjoy — the education piece we offer to clients: ‘this is what the grand bargain looks like, and we’re going to help you plan for it. This may not seem so grand, but we’re here to help you navigate this and figure out how you’re going to work within these parameters now.’”

Royal and her team have helped plenty of employers over the 10 years since she opened her law firm, Royal, P.C., in Northampton. Since launching the business as a boutique, woman-owned, management-side-only firm in 2008, that framework hasn’t changed, but the way the team serves those clients has certainly evolved.

“Now that we’re 10 years old, we’re thinking about rebranding, thinking about growth, and how we can provide additional opportunities here at the law firm,” she told BusinessWest. “Is it continuing to market in this very discrete area or expanding beyond that?

“We obviously only represent companies,” she went on, “but in our relationships with clients, we’re being asked to handle other things for those companies apart from employment law.”

“Now that we’re 10 years old, we’re thinking about rebranding, thinking about growth, and how we can provide additional opportunities here at the law firm.”

For example, the firm represents a large, publicly traded company that recently launched a new brand and wanted help creating contracts with vendors and negotiating with other companies it was collaborating with. Another client is a large human-service agency that called on Royal to interpret regulations of its funding sources and help negotiate contracts related to those sources.

“So we’ve organically expanded over time,” she said. “We still represent companies, but we do more for them, because we’re seen as a true advisor to them. So now, at 10 years, I’ve looked at the firm and asked my team, ‘is this something we should now be marketing?’ We still are a boutique firm representing companies, but what we’re going to be rolling out in the coming year is a rebranding initiative — one that’s focused on telling the story of what we are doing here that’s more than just employment law.”

Tough Timing

Royal began her law career working for the Commonwealth, in the Office of the Attorney General, handling civil-litigation matters, which included some employment claims. From there, she went into private practice at a regional law firm that solely handled management-side labor and employment law.

Amy Royal (center) with some of her team members

Amy Royal (center) with some of her team members, including (top) attorneys Daniel Carr and Timothy Netkovick, and (bottom) Heather Loges, practice manager and COO; and Merricka Breuer, legal assistant.

With that background, Royal sensed a desire to start her own company — which turned out to be a risky proposition, opening up into the teeth of the Great Recession.

“I obviously took a huge leap; I was at an established law firm and had been there for a long time. I had an established job, with a very young family at the time. And it was 2008, when, obviously, the economy wasn’t in good shape.”

So she understood if people thought striking out on her own might not have been the safest move.

“But given how long I’d been practicing law at the time, it felt to me like it was now or never,” she explained. “I really wanted to see if I could make a go at it, and I felt like I had the tools to develop a business. Oftentimes, law firms aren’t thought of as businesses; they’re thought of as practitioners, but not businesses. But I knew I could create a law firm in a strategic way and develop it and make a company out of it.”

At first, Royal’s wasn’t the only name on the letterhead. At first, the firm was called Royal & Munnings, with Amy Griffin Munnings as a partner, helping Royal get the firm off the ground. Later, after Munnings moved to Washington, D.C., the firm was known as Royal & Klimczuk, for then-partner Kimberly Klimczuk, who subsequently departed and currently practices employment law at Skoler Abbott in Springfield.

Currently, Royal employs four other attorneys full-time, in addition to two full-time paralegals and other support staff.

“I really wanted to take the model of a specialized, boutique practice and build upon it with a strong client base of corporations throughout our Valley and beyond — because we do represent companies in Rhode Island, Connecticut, and Vermont, as well as national corporations,” she explained.

“I believed it didn’t so much matter where we were located because we go out to our clients,” she added. “So I chose Northampton because I have really enjoyed the community — I went to Smith College, and I thought I could have an impact here and throughout the region and beyond in creating employment opportunities for people.”

That is, in fact, how Royal sees her work: by helping clients navigate through often-tricky employment issues, she’s helping those companies grow and create even more jobs in the Valley.

And while many of those thorny issues have remained consistent, they’ve ebbed and flowed in some ways, too.

“Given the employment-law landscape, there becomes hot areas at certain times, and we become sort of subspecialists in those areas,” she explained. For example, early on, she saw a lot of activity around affirmative action and dealing with the Office of Federal Contract Compliance Programs. Wage-and-hour conflicts have become increasingly prominent in recent years as well, and Royal, P.C. has handled client defense on those issues, as well as general guidance on how to avoid claims altogether.

“I do feel like we can advise clients and help them flourish,” she went on. “I’m so committed to this region, and I know there’s been a lot of work done over the last decade since our birth as a law firm, in the business community and the community at large, on how to make the Pioneer Valley an even more attractive place for people to live and earn a living and feel like they have opportunities here — that they don’t have to be in Boston to have those opportunities.”

Risk Managers

As she continues to grow the firm, Royal says it’s always a challenge to find talented attorneys who are skilled in labor and employment law and also understand her vision for the company.

“Practitioners often think, ‘here’s what the law says.’ We need to be telling clients, ‘OK, here’s what the law says you can do, but this is also a business decision, and everything is about weighing and measuring risk and deciding whether you can bear that risk or not, whether that’s a good practice or not.’”

“Given how long I’d been practicing law at the time, it felt to me like it was now or never. I really wanted to see if I could make a go at it, and I felt like I had the tools to develop a business.”

And challenges to employers are constantly evolving, whether it’s legislation like the grand bargain or issues that arise from new technology. She recalls what a hot topic portable devices, like smartphones and tablets, were in the early part of this decade.

“Now it’s like everyone has one,” she said, “but at that time, it was a huge issue for employers, who were asking, ‘where is our data going? If you’re a portable employee, what’s happening when you leave with that phone?’”

The economy can affect the flow of work as well. In the early days of the firm, as the recession set in, litigation crowded out preventive work such as compliance matters, employee handbooks, and supervisory training. In recent years, she’s seen an uptick in requests for those services again.

Sometimes, employers will call with advice before taking disciplinary action with an employee — just another way Royal aims to be a partner to clients. The firm also conducts regular seminars and roundtables, both for clients and the public, on matters — such as legislative changes and policy wrinkles — that affect all employers.

In some ways, that’s an extension of the way Royal wants the firm to be a presence in the broader community. Another is the team’s involvement with local nonprofits.

“I’ve tried to set that tone,” she said, “but it’s never been met with resistance — it’s always been met with ‘oh, yes, maybe we can do this, maybe we can do that.’ It’s been important to me to have a team that really wants to support their community.”

Meanwhile, that team has been focused, perhaps more than ever before, on what exactly Royal, P.C. is — where the firm has been in the past, what it is now, and what it wants to be going forward.

“We have a strong, viable book of labor and employment business, and what I’ve communicated to my team is, ‘we can keep going for the next 10 years, 20 years, on that book, and achieve growth.’ Or we can look at our brand and say, ‘do we want to grow beyond that? Do we tell the story of the other services we’re able to provide, and create other employment opportunities for people in the Valley?’ There’s a consensus here that that’s really the direction we should be going in.”

Joseph Bednar can be reached at [email protected]