Lawffice Space - Employment Law Blog by Philip Miles

Pennsylvania Enacts the CROWN Act: What Employers Need to Know

noreply@blogger.com (Philip K. Miles) — Mon, 08 Dec 2025 02:10:00 +0000

On November 25, 2025, Gov. Shapiro signed the Creating a Respectful and Open World for Natural Hair (CROWN) Act into law. The new law amends Pennsylvania's anti-discrimination law, the Pennsylvania Human Relations Act (PHRA) in a few important ways:

Broadens the definition of "race" to include hair texture and hairstyles

The PHRA prohibits discrimination based on race, and the definition of "race" now specifically includes "hair texture and protective hairstyles." "Protective hairstyles" include, but are not limited to, "locs, braids, twists, coils, Bantu knots, afros and extensions."

Broadens the definition of "religious creed" to include hairstyles and head coverings

The PHRA prohibits discrimination based on religious creed, and the definition of "religious creed" now specifically includes "head coverings and hairstyles historically associated with religious creeds."

Workplace health and safety rule and BFOQ exception

Employers may still adopt:

An otherwise valid health and safety rule or policy; or
Other rule or policy justified as a bona fide occupational qualification (BFOQ).

However, to establish the exception applies, the employer must demonstrate:

(i) Without the adoption of the rule or policy the health or safety of an employe or other materially connected person may be impaired;

(ii) The rule or policy is adopted for nondiscriminatory reasons;

(iii) The rule or policy is specifically tailored to the applicable position and activity; and

(iv) The rule or policy is applied equally to individuals whose positions fall under the applicable position and activity.

Effective Date: January 24, 2026

Third Circuit on Computer Fraud and Abuse Act for Employees

noreply@blogger.com (Philip K. Miles) — Tue, 02 Sep 2025 12:00:00 +0000

New and interesting decision from the Third Circuit in NRA Group, LLC v. Durenleau and Badaczewski.

The Computer Fraud and Abuse Act (CFAA) prohibits "access[ing] a computer without authorization" and "exceeding authorized access." It imposes both civil and criminal liability.

Here, the employer initiated CFAA actions against two former employees based on violations of the employer's computer use policies. As summarized by the Court:

Not official use.

While employed . . . Nicole Durenleau was out sick. She urgently needed a work document, but she had no way to access it. Her friend and colleague, Jamie Badaczewski, logged in to Durenleau’s computer from the office, accessed the document—a spreadsheet with Durenleau’s passwords—and emailed it to Durenleau. She did so with Durenleau’s express permission, but the pair’s actions, including Durenleau’s creation of the spreadsheet, breached workplace computer-use policies.

This violated numerous workplace rules, including sharing credentials, not maintaining exclusive control of IDs and passwords, storing login information in a "readable form" (the spreadsheet), accessing information the employee was not responsible for, etc.

Because the CFAA provides for both civil liability and criminal penalties, the Court cast the claims as the employer "ask[ing] us to make the employees' conduct a federal crime." The Third Circuit held "for the first time" that "the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, does not turn these workplace-policy infractions into federal crimes." Further, "we hold that, absent evidence of code-based hacking, the CFAA does not countenance claims premised on a breach of workplace computer-use policies by current employees."

Now, that is not to say that employers are left without any remedies for employee misuse of their computer systems. As the Court noted:

Indeed, there are many other causes of action—breach of contract, business torts, fraud, negligence, and so on—that provide a remedy for employers when employees grossly transgress computer-use policies.

This case has a ton of other issues (some of which were stayed pending the appeal). One additional interesting holding from this decision: "the passwords were not trade secrets" because they did not have "independent economic value." Put differently, "it is what the passwords protect, not the passwords, that is valuable."

SCOTUS nixes universal injunctions

noreply@blogger.com (Philip K. Miles) — Mon, 30 Jun 2025 13:29:00 +0000

On its face, this case was about an executive order ending "birthright citizenship." But, Friday's decision in Trump v. CASA (Justice Barrett for the majority) was actually about the authority of district courts to grant "universal injunctions" - "the power to prohibit enforcement of a law or policy against anyone."

From a high-level policy perspective, there are some solid arguments for and against these nationwide injunctions:

On the one hand, if the executive branch is doing something illegal - violating constitutional rights or exceeding the scope of its federal legislative or constitutional authority - why would a court not be able to stop it from breaking the law everywhere? It's convenient. It creates uniformity.

On the other hand, why should one district judge - who is one of several district judges in a court that only has jurisdiction over one state (and often, only a small part of one state) - determine the law and executive branch power for the entire country? It effectively gives a district judge with very limited jurisdiction a veto power over the entire executive branch. Plus, there's forum shopping.

Justice Barrett

However, the Supreme Court determines what the law is and not what it ought to be. "The issue before us is one of remedy: whether, under the Judiciary Act of 1789, federal courts have equitable authority to issue universal injunctions." Long story, short: The Court looked at the equitable powers of courts when the Judiciary Act was enacted and concluded that universal injunctions were not authorized and therefore impermissible. Instead, injunctions may not be "broader than necessary to provide complete relief to each plaintiff with standing to sue."

Now, you may be asking how this relates to employment law. Remember these?

Pres. Obama's increase to the minimum salary threshold for the white collar exemptions to the FLSA overtime requirements;
Pres. Biden's FTC rule effectively banning (most) noncompetes; and
Pres. Biden's increase to the minimum salary threshold for the white collar exemptions to the FLSA overtime requirements.

All of them were initially stopped by district court rulings.

The Future

A couple of notes about the ruling:

The Court only ruled on whether the Judiciary Act authorized federal district courts to issue universal injunctions. It did not decide whether Article III of the Constitution permits them. In other words, Congress could amend the Judiciary Act to allow universal injunctions. One, I don't see that happening anytime soon. And, two, that would then require analysis of the Article III question, and I don't know how SCOTUS would rule on that.
District courts can still afford injunctive relief to "plaintiffs with standing" - in a concurring opinion, Justice Alito notes, "Lax enforcement of the requirements for third-party standing and class certification would create a potentially significant loophole to today’s decision.
Worth noting that SCOTUS, in a footnote, stated "Nothing we say today resolves the distinct question whether the Administrative Procedure Act authorizes federal courts to vacate federal agency action. See 5 U. S. C. §706(2) (authorizing courts to 'hold unlawful and set aside agency action')."

SCOTUS: A Reverse Discrimination Claim is Just Another Discrimination Claim

noreply@blogger.com (Philip K. Miles) — Fri, 06 Jun 2025 13:00:00 +0000

Yesterday, the Supreme Court issued a unanimous decision in Ames v. Ohio Dept. of Youth Services. No surprises here. The plaintiff in Ames was a heterosexual employee who was passed over for a job in favor of a lesbian woman. Ames claimed that she was discriminated against based on her sexual orientation.

Justice Jackson

Some circuit courts (although, notably *not* the Third Circuit where I practice) had held that a plaintiff in a Title VII discrimination claim who is a member of a majority group must make an additional showing of "background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority." This created a higher evidentiary standard for plaintiffs in a majority group.

The SCOTUS opinion, authored by Justice Jackson eliminated this extra requirement: "We hold that this additional 'background circumstances' requirement is not consistent with Title VII’s text or our case law construing the statute." And, "the standard for proving disparate treatment under Title VII does not vary based on whether or not the plaintiff is a member of a majority group." So, a reverse discrimination claim is just another discrimination claim.

This was pretty much a foregone conclusion before the opinion even came out, but now it's official. Perhaps more interestingly, Justice Thomas (joined by Justice Gorsuch) signaled "In a case where the parties ask us to do so, I would be willing to consider whether the McDonnell Douglas framework is a workable and useful evidentiary tool." The framework is currently used in disparate treatment claims based on circumstantial evidence (which is most of them), and McDonnell Douglas is one of the most cited SCOTUS decisions ever.

New Third Circuit Religious Accommodation Case - Beards and Air Masks

noreply@blogger.com (Philip K. Miles) — Wed, 04 Jun 2025 14:12:00 +0000

An interesting new precedential decision from the Third Circuit in Smith v. City of Atlantic City was published on May 30, 2025. The fire department prohibited a Christian employee from growing a beard of any length in violation of his religious beliefs.

Not official use.

The plaintiff was classified as a firefighter but actually worked as an Air Mask Technician. Accordingly, he had not actually fought a fire since 2015 and instead served on scene away from the smoke and assisted the firefighters with their "self-contained breathing apparatuses" (SCBAs). The plaintiff himself could not properly wear a SCBA with a beard because the beard would preclude a seal from forming.

Would allowing him to grow a beard impose an "undue hardship?" The Third Circuit vacated the entry of summary judgment for the employer:

It is telling that no Air Mask Technician has been called to engage in fire suppression for several decades . . . The City can only theorize a vanishingly small risk that Smith will be called in to engage in the sort of firefighting activities for which an SCBA is required. There are no other personnel—whether administrators or active firefighters—who are seeking an accommodation relating to the SCBAs, so the risk that the City will be unable to respond to an emergency safely is all the more unlikely.

Thus the plaintiff may proceed on his Title VII religious accommodation claim (and also a constitutional Free Exercise Clause claim).

PA Medical Marijuana and Employment Law

noreply@blogger.com (Philip K. Miles) — Thu, 20 Feb 2025 14:03:00 +0000

A quick slide presentation highlighting the key employment-related provisions of Pennsylvania's Medical Marijuana Act (and some guidance on CDLs):

Third Circuit: Home Health Aide travel time between client sites is compensable under the FLSA

noreply@blogger.com (Philip K. Miles) — Mon, 03 Feb 2025 13:28:00 +0000

Time spent by Home Health Aides (HHAs) traveling between client sites is compensable time under the FLSA and therefore must be paid time. This remains true even if the HHA has some off-duty time immediately before or after the travel.
DOJ v. Nursing Home Care Management, Inc. (3d Cir., Jan. 31, 2025).

President Trump Removes EEOC Commissioners and NLRB Member

noreply@blogger.com (Philip K. Miles) — Wed, 29 Jan 2025 14:12:00 +0000

President Trump removed a member of the NLRB, and two EEOC commissioners, leaving both without a quorum for the time-being. Can he do that? Under the statutory text of the NLRA, clearly no (it requires a hearing and neglect of duty or malfeasance). Under the statutory text of Title VII (re: EEOC), removal is not expressly addressed - it does generally specify five year terms though.

There is, however, a constitutional issue. The executive power is vested in one person, the President. This power *generally* includes the power to remove people who assist him in wielding the executive power. In Humphrey’s Executor v. U.S. in 1935, SCOTUS recognized an exception, holding "that Congress could create expert agencies (specifically, the FTC) led by a group of principal officers removable by the President only for good cause."

In 2020, SCOTUS limited that holding by striking down the CFPB framework in which "an independent agency [is] led by a single Director" subject to statutory limitations on the President's power to remove them. Seila Law v. CFPB (linked below). The key distinction was a multi-member board versus a single director.

The NLRB and EEOC seem a lot more like the FTC in Humphrey's Executor than the CFPB in Seila Law. Some Justices appear inclined to overrule Humphrey's Executor though, and these recent removals may put the issue in front of SCOTUS.

President Trump rescinds federal contractor affirmative action executive order

noreply@blogger.com (Philip K. Miles) — Thu, 23 Jan 2025 14:00:00 +0000

Earlier this week, President Trump signed a new executive order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity. One major piece of this order is that it rescinds Executive Order 11246 (1965, since amended). EO 11246 generally required federal contractors to "take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin."

Notably, affirmative action did *not* mean implementing quotas, set-asides for specific groups, or hiring based on protected characteristics over merits (indeed, these would violate anti-discrimination statutes like Title VII). Instead, the order required employers to create organizational profiles with workforce analysis - tracking total number of employees by job title and identifying areas of underrepresentation compared to the availability of qualified women and minorities in the labor market; setting targets; and implementing action-oriented programs like recruitment and training programs.

Note that federal contractors are still subject to other affirmative action requirements regarding disabilities and veterans.

SCOTUS: Preponderance of the evidence standard for FLSA exemptions

noreply@blogger.com (Philip K. Miles) — Wed, 15 Jan 2025 22:26:00 +0000

New Supreme Court Decision! Today, the Supreme Court held that employers looking to prove an employee is exempt from the minimum wage and overtime requirements of the FLSA must do so by a "preponderance of the evidence." This is, of course, the standard burden of proof in civil litigation. Some courts, however, had applied a higher standard like "clear and convincing evidence." Here in the Third Circuit, some cases have used language like "plainly and unmistakably." Today's decision makes clear that preponderance of the evidence is the standard.

You can read the full decision here.

New Pennsylvania law restricting noncompetes with health care practitioners is now in effect

noreply@blogger.com (Philip K. Miles) — Fri, 03 Jan 2025 14:34:00 +0000

The Fair Contracting for Health Care Practitioners Act took effect on January 1, 2025. The Act generally bans the use of noncompete agreements with certain health care practitioners but with some notable exceptions.

Who

The Act defines “health care practitioner” as a medical doctor, doctor of osteopathy, certified registered nurse anesthetist, registered nurse practitioner, or physician assistant.”

What

“Noncompete covenant” is broadly defined as “An agreement that is entered into between an employer and a health care practitioner in this Commonwealth which has the effect of impeding the ability of the health care practitioner to continue treating patients or accepting new patients, either practicing independently or in the employment of a competing employer after the term of employment.” 35 Pa. Stat. Ann. § 10323.

When

The Act took effect on January 1, 2025.

The General Rule

Any noncompete entered into with a health care practitioner after January 1, 2025 is “deemed contrary to the public policy and is void and unenforceable by an employer.” 35 Pa. Stat. Ann. § 10324(a).

The Exceptions

1. Less than one year, not dismissed. The general prohibition does not apply to noncompetes where (1) the duration of the restrictive covenant is less than one year; and (2) the health care practitioner was not dismissed by the employer. 35 Pa. Stat. Ann. § 10324(b).

2. Recovery of reasonable expenses. An employer may still contract with a health care practitioner to recover reasonable expenses, if the expenses are: (1) Directly attributable to the health care practitioner and accrued within the three years prior to separation, unless separation is caused by dismissal of the health care practitioner; (2) related to relocation, training and establishment of a patient base; and (3) amortized over a period of up to five years from the date of separation by the health care practitioner. 35 Pa. Stat. Ann. § 10324(c)(1).

3. Ownership transfers. Noncompetes remain permissible for: (1) the sale of an ownership interest or all or substantially all of the assets of the business entity; (2) a transaction resulting in the sale, transfer or other disposition of the control of the business entity, including by merger or consolidation; and (3) the health care practitioner’s receipt, by purchase, grant, award, issuance or otherwise, of an ownership interest in the business entity. 35 Pa. Stat. Ann. § 10324(c)(2).

Patient Notification

The Act also requires employers to notify the health care practitioner’s patients of: (1) the health care practitioner’s departure; (2) if the patient chooses to receive care from the departed health care practitioner or another health care practitioner, how the patient may transfer the patient’s health records to a health care practitioner other than with the employer; and (3) that the patient may be assigned to a new health care practitioner within the existing employer if the patient chooses to continue receiving care from the employer. 35 Pa. Stat. Ann. § 10325. The notice must be sent within 90 days of the employee’s departure and only to patients the employee saw within the past year and had an ongoing outpatient relationship with for two or more years.

DOL Proposes Phase Out of Subminimum Wages for Some Employees with Disabilities

noreply@blogger.com (Philip K. Miles) — Tue, 03 Dec 2024 15:50:00 +0000

The Department of Labor announced a proposed rule that would phase out certificates allowing payment of less than minimum wage to some workers with disabilities. Press release here.

As summarized by the DOL in the proposed rule:

The Fair Labor Standards Act (FLSA or Act) authorizes the Secretary of Labor to issue certificates allowing employers to pay productivity-based subminimum wages to workers with disabilities, but only where such certificates are necessary to prevent the curtailment of opportunities for employment.

The actual proposal is summarized as:

Not official use.

The Department specifically proposes to cease issuance of new section 14(c) certificates to employers submitting an initial application on or after the effective date of a final rule and permit existing section 14(c) certificate holders, assuming all legal requirements are met, to continue to operate under section 14(c) certificate authority for up to 3 years after the effective date of a final rule. The Department is also requesting comment as to whether, if this proposed rule is finalized, it would be appropriate to grant an extension for existing section 14(c) certificate holders who demonstrate a need and seeks comments on the need for such an extension period, and, if needed, its scope, structure and length.

Given the pending change of administrations, we will have to wait and see if this actually gets finalized and goes into effect.

Court Strikes Down DOL Overtime Rule

noreply@blogger.com (Philip K. Miles) — Tue, 19 Nov 2024 19:26:00 +0000

Stop me if you've heard this one! It's just before Thanksgiving, we just had a presidential election (in which Donald Trump got elected), and a new regulation increasing the minimum salary threshold for the white collar overtime exemptions is about to go into effect, when . . . a court strikes the rule down in its entirety nationwide. Yes, that happened in 2016 to the Obama DOL overtime rule. Guess what? It just happened again to the Biden DOL overtime rule.

Long story short: Certain white collar salaried employees are exempt from the FLSA's overtime requirements (i.e. they do not get paid time and a half for hours over 40 worked in a workweek). To qualify for the exemption the employee's must receive a salary in excess of a minimum salary threshold. It was $684 per week under a Trump administration rule. The Biden administration's rule increased the minimum to $844/week on July 1, 2024 and was scheduled to increase to $1,128/week on January 1, 2025.

Not official use.

The new rule would also have increased the minimum for the Highly Compensated Employee (HCE) exemptions ($132,964 on July 1, 2024, and $151,164 on January 1, 2025). The new rule included other more minor changes (future automatic increases, counting nondiscretionary bonuses, catchup payments, etc.).

On Friday, a federal court in Texas struck down the whole rule (opinion via Bloomberg Law).

Just tell me what this means!

The entire rule has been vacated. Yes, even the part that already went into effect in July. So, we're back to $684/week as the minimum salary threshold for the white collar exemptions.

Caveat: We may see an appeal, and we don't know how an appeals court will rule. We also don't know how the incoming Trump administration will handle those appeals (and/or whether it will propose a new rule of its own or repeal the Biden Rule).

NLRB Rules Captive Audience Meetings Violate the NLRA

noreply@blogger.com (Philip K. Miles) — Thu, 14 Nov 2024 13:38:00 +0000

The National Labor Relations Act (NLRA) severely limits the steps employers can take to oppose union organizing activity. For years, the one weapon they had at their disposal was "captive audience meetings." Yesterday, the National Labor Relations Board (NLRB) overruled precedent from 1948(!):

Not official use.
[A]n employer violates the National Labor Relations Act by requiring employees under threat of discipline or discharge to attend meetings in which the employer expresses its views on unionization.

Press release here | Full decision in Amazon Services LLC here. Can employers still hold meetings to express their views on unionization at all? Yes, but under very narrow circumstances:

[T]he Board made clear that an employer may lawfully hold meetings with workers to express its views on unionization so long as workers are provided reasonable advance notice of: the subject of any such meeting, that attendance is voluntary with no adverse consequences for failure to attend, and that no attendance records of the meeting will be kept.

Now, you may have heard . . . we have a new Presidential administration coming in January. I don't condone gambling on administrative agency decisions, but if I had to bet . . . we'll see a reversal at some point in the next four years (either in the courts or at the NLRB).

Court Blocks FTC Noncompete Ban

noreply@blogger.com (Philip K. Miles) — Wed, 21 Aug 2024 12:16:00 +0000

While this is not shocking, it is still big news - the Northern District of Texas struck down the FTC's proposed ban on noncompetes, which was to take effect on September 4, 2024. You can read the Court's Opinion and Order in Ryan LLC v. Federal Trade Commission here.

In short: "The Non-Compete Rule, 16 C.F.R. § 910.1–.6, is hereby SET ASIDE and shall not be enforced or otherwise take effect on September 4, 2024, or thereafter." The Court held that "the FTC lacks statutory authority to promulgate the NonCompete Rule, and that the Rule is arbitrary and capricious."

What now? Well, for now noncompetes remain as enforceable as they were before the FTC rule, and employers can hold off on sending those notices of unenforceability to employees with noncompetes. We will likely see an appeal from the FTC. It is possible (but in my opinion unlikely) that an appellate court will take swift action to reinstate the rule. Longer term, there will be some appellate action and other pending litigation playing out. Yes, the ol' "stay tuned."

Video from Wage and Hour Presentation (FLSA Overtime Regulations)

noreply@blogger.com (Philip K. Miles) — Mon, 12 Aug 2024 13:15:00 +0000

On August 1, 2024, Jens Thorsen and Valhalla Business Advisors invited me to speak about recent developments in wage and hour law. It was a solid mix of fundamentals, and the new FLSA overtime regulations (with some Pennsylvania Minimum Wage Act thrown in for good measure). You can view the recording of Emerging HR Updates Seminar Overtime Rules '24.

FTC announces final rule banning noncompetes

noreply@blogger.com (Philip K. Miles) — Wed, 24 Apr 2024 11:32:00 +0000

Yesterday, the FTC released its final rule banning noncompetes (Announcement | Final Rule). Of course, we had some idea of what to expect from the proposed rule. But, as always, there were a few teaks in the final version. The final rule is 570 pages, so I haven't digested the whole thing yet, but here are some highlights:

The Gist

Employee noncompetes are an unfair method of competition and therefore unenforceable. In other words, it bans new noncompetes *and* renders existing noncompetes unenforceable.

Effective Date

120 days after publication in the Federal Register - probably late August-ish,

Changes from Proposed Rule

Existing noncompetes can still be enforced against "Senior Executives" (workers earning more than $151,164 who are in a "policy-making position"), but no new noncompetes.
Employers are no longer required to formally rescind existing noncompetes. Instead, they can simply provide notice to the employee that the existing noncompete will not be enforced. The rule includes a model notice.

Notable Exceptions

A noncompete in connection with the sale of a business (note that the Final Rule drops the 25% ownership requirement from the proposed rule).
Causes of action that accrue prior to the effective date.
Not official use.

Alternatives

Non-Disclosure Agreements (NDAs);
Non-Solictation Agreements (client and employee); and
Training Repayment Agreement Provisions (TRAPs).

Note that all of these come with the caveat that they must be narrowly tailored and not so broad as to effectively serve as noncompetes.

Of course, this entire thing comes with the giant caveat that there will likely be legal challenges to the FTC's authority to implement this rule. I plan as though it's happening, but wait until the last minute to actually implement (lesson learned from the salary threshold debacle of 2016).

SCOTUS sheds light on discriminatory job transfer claims under Title VII

noreply@blogger.com (Philip K. Miles) — Wed, 17 Apr 2024 17:05:00 +0000

The Supreme Court published its opinion in Muldrow v. City of St. Louis. The syllabus succinctly describes the holding as:

An employee challenging a job transfer under Title VII must show that the transfer brought about some harm with respect to an identifiable term or condition of employment, but that harm need not be significant.

Some Circuit Courts had been applying a heightened standard, requiring "significant" harm. The facts in this case are illustrative of the kinds of close calls that will now come out in favor of the plaintiff/employee. The plaintiff was a police officer in the police department's Intelligence Division, who was transferred to a uniformed job in the Fifth District:

Justice Kagan
While Muldrow’s rank and pay remained the same in the new position, her responsibilities, perks, and schedule did not. Instead of working with high-ranking officials on the departmental priorities lodged in the Intelligence Division, Muldrow now supervised the day-to-day activities of neighborhood patrol officers. Her new duties included approving their arrests, reviewing their reports, and handling other administrative matters; she also did some patrol work herself. Because she no longer served in the Intelligence Division, she lost her FBI status and the car that came with it. And the change of jobs made Muldrow’s workweek less regular. She had worked a traditional Monday-through-Friday week in the Intelligence Division. Now she was placed on a “rotating schedule” that often involved weekend shifts.

This was sufficient to meet the Supreme Court's new "some harm" standard - as Justice Kagan notes "with room to spare."

DOL Issues Final Rule: Employee or Independent Contractor Under the FLSA

noreply@blogger.com (Philip K. Miles) — Wed, 10 Jan 2024 12:30:00 +0000

On Tuesday, the U.S. Department of Labor announced its Final Rule: Employee or Independent Contractor Under the Fair Labor Standards Act. A quick overview:

Effective Date:

March 11, 2024

Why it matters:

The FLSA sets a minimum wage and requires overtime pay (time and a half for hours over 40 worked in a workweek). It also imposes certain recordkeeping requirements, and prohibits retaliation for filing complaints about violations. Simply put, this all applies to employees but not independent contractors.

Not official use.

Shut up and tell me the test!

The final rule utilizes the "economic realities test," examining the "totality of the circumstances" where "economic dependence is the ultimate inquiry." The rule provides a non-exhaustive list of six factors, none of which is dispositive on its own:

Opportunity for profit or loss depending on managerial skill;
Investments by the worker and the potential employer;
The degree of permanence of the work relationship;
The nature and degree of control;
The extent to which the work performed is an integral part of the potential employer’s business; and
Skill and initiative.

If you're looking for more in-depth guidance on applying these factors - great news! - the final rule is 339 pages long. Sorry, too much? Check out the FAQ page for something in between this very brief overview and the full 339-page rule.

Overtime and Noncompete Regulations to Plan for in 2024

noreply@blogger.com (Philip K. Miles) — Wed, 03 Jan 2024 12:30:00 +0000

What better way to kick off the new year than with my latest article in Pennsylvania Business Central? The article addresses Overtime and Noncompete Regulations to Plan for in 2024. Will they actually take effect? We don't know yet. But, employers should start planning just in case.

EEOC publishes proposed rule for Pregnant Workers Fairness Act

noreply@blogger.com (Philip K. Miles) — Fri, 11 Aug 2023 13:20:00 +0000

This week, the EEOC published a Notice of Proposed Rule Making (NPRM) for the Pregnant Workers Fairness Act (PWFA). The PWFA went into effect on June 27, 2023. In a nutshell:

Not official use.
The PWFA requires covered employers to provide reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an undue hardship.

Employers may find the following resources helpful:

Comments are due on or before October 23, 2023, and the Final Rule will follow sometime after that.

NLRB swings the pendulum back on employee handbooks

noreply@blogger.com (Philip K. Miles) — Thu, 03 Aug 2023 14:22:00 +0000

Yesterday, the National Labor Relations Board (NLRB) adopted a new standard for assessing the lawfulness of work rules (press release | decision in Stericycle, Inc.). If you're stuck in the past (ya know, like two days ago), here is an overview of the overruled categorical Boeing standard (maybe bookmark it in case a Republican gets elected president).

So, what is the "new" standard, which actually "builds on" the "old-old" (pre-Boeing) standard?

Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer proves its defense, then the work rule will be found lawful to maintain.

If you're a fan of Con Law, this sounds a lot like "strict scrutiny." Employers may wish to review their employee handbooks with the new standard in mind to avoid NLRA challenges.

SCOTUS clarifies "undue hardship" standard for religious accommodation under Title VII

noreply@blogger.com (Philip K. Miles) — Fri, 30 Jun 2023 12:36:00 +0000

Awe man, how embarrassing. It turns out that some of us (by which I mean basically all of us) have been getting it wrong for 46 years! You see, Title VII requires employers to reasonably accommodate an employee's sincerely held religious beliefs unless doing so would impose an "undue hardship."

Well, apparently we've been misinterpreting a 1977 Supreme Court decision (Trans World Airlines, Inc. v. Hardison) to interpret "undue hardship" as meaning "more than a de minimis cost." In fairness to us, the Supreme Court decision in question literally says, “To require TWA to bear more than a de minimis cost in order to give Hardison Saturdays off is an undue hardship.” Or, if you like ellipses to really drive it home, "more than a de minimis cost . . . . is an undue hardship."

Justice Alito

No, no, no, says SCOTUS. Yesterday, the Supreme Court issued its opinion in Groff v. DeJoy. Now, despite my sarcasm, it has always been odd that "undue hardship," meant "more than de minimis" for religious accommodations, but something far more substantial under the ADA's disability accommodation provisions. And, as the Court noted yesterday, "de minimis" means something far less than the plain language understanding of the phrase "undue hardship."

But, hey, the past is the past. Let's cut to the chase, what does "undue hardship" really mean in the context of a religious accommodation defense?

"We think it is enough to say that an employer must show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business."
"[C]ourts must apply the test in a manner that takes into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, “size and operating cost of [an] employer.”

The fundamentals remain unchanged: An employer must reasonably accommodate an employee's sincerely held religious beliefs unless it imposes an undue hardship. Now, however, the bar has been raised for what counts as an "undue hardship."

NLRB decision shifts independent contractor analysis

noreply@blogger.com (Philip K. Miles) — Wed, 14 Jun 2023 12:52:00 +0000

Yesterday. the NLRB issued its decision in The Atlanta Opera, Inc. You know it's important when they also issue a press release.

It is probably easiest to explain what the new test is not: "The Board expressly rejected the holding of the SuperShuttle Board that entrepreneurial opportunity for gain or loss should be the 'animating principle' of the independent-contractor test."

So, what is the test? I know what you're thinking... "Phil, pleeease tell me that it's a nonexhaustive list of ten factors!?" You know it! The decision marks a return to "longstanding principles" and "independent-contractor analysis will be guided by a list of common-law factors." Turning to the Restatement (Second) of Agency, the Board looked at:

[T]he following matters of fact, among others, are considered:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular business of the employer;
(i) whether or not the parties believe they are creating the relation of master and servant; and
(j) whether the principal is or is not in business.

Notably, the new decision not only overrules prior NLRB precedent, but also seems to depart from D.C. Circuit precedent (FedEx Home Delivery v. NLRB, 563 F.3d 492 (D.C. Cir. 2009) (FedEx I)). The Board purports to rely on Supreme Court and decisions and other D.C. Circuit decisions. Time will tell whether The Atlanta Opera standard will survive.

NLRB GC weighs in on nondisparagement and confidentiality clause decision

noreply@blogger.com (Philip K. Miles) — Wed, 29 Mar 2023 13:19:00 +0000

NLRB General Counsel, Jennifer Abruzzo, issued a memorandum addressing the NLRB's decision in McLaren Macomb (memo | press release | McLaren decision). You can read my analysis of that decision here: NLRB takes aim at confidentiality and nondisparagement clauses in separation agreements.

The whole memo is worth a read, but some highlights of the GC's view:

Even unsigned agreements violate the NLRA if they were proffered and include unlawful nondisparagement and confidentiality provisions;
The decision applies retroactively to separation agreements entered into even before the NLRB's decision in McLaren;
In a rare piece of good news, agreements with unlawful clauses are likely still enforceable as to the remaining lawful provisions;
The memo is less than clear as to whether a "savings clause" would work. It seems like it could work, but the GC would like the NLRB to adopt a model.

On that last point, what might a model savings clause look like? Well, the memo states that a savings clause should:

make it clear to employees that they had rights to engage in:

(1) organizing a union to negotiate with their employer concerning their wages, hours, and other terms and conditions of employment;

(2) forming, joining, or assisting a union, such as by sharing employee contact information;

Not official use.
(3) talking about or soliciting for a union during non-work time, such as before or after work or during break times, or distributing union literature during non-work time, in nonwork areas, such as parking lots or break rooms;

(4) discussing wages and other working conditions with co-workers or a union;

(5) taking action with one or more co-workers to improve working conditions by, among other means, raising work-related complaints directly with the employer or with a government agency, or seeking help from a union;

(6) striking and picketing, depending on its purpose and means;

(7) taking photographs or other recordings in the workplace, together with co-workers, to document or improve working conditions, except where an overriding employer interest is present;

(8) wearing union hats, buttons, t-shirts, and pins in the workplace, except under special circumstances; and

(9) choosing not to engage in any of these activities.

That's, uhhh, a lot. Keep an eye out for that model language, but I think it's going to be something like the above.