As the current legislative session enters its final week, state lawmakers are preparing to—once again—sacrifice Connecticut employers and entrepreneurs on the altar of political expediency.
Heralded by Democratic lawmakers as “The Largest Overhaul in Modern Connecticut History of Sexual Harassment Law,” the “Times Up Act” is a potent example of policy created to sound great on the campaign trail—but without regard for the bill’s actual impact. And in this case, such caviler legislating will carry a very real cost, as, the Time’s Up Act would impose crippling new costs and regulatory mandates on Connecticut’s employers.
Although you wouldn’t know it from the hyperbole surrounding the Times Up Act, Connecticut is a leader in creating safe, inclusive workplaces. Indeed, Connecticut is just one of three states that that require private sector employees to provide sexual harassment prevention training, mandating it for supervisors at companies with 50 or more employees. And by every statistical indication, these measures are working: As a result of Connecticut’s rigorous training and enforcement requirements, the number of sexual harassment complaints filed with the Connecticut Commission on Human Rights and Opportunities (CHRO), which handles discrimination and other workplace complaints, is down from a high of 271 in 2001 to about 158 in 2017. To put this in perspective, consider the following: In 2017, the CHRO 2,490 new complaints; only 158—or approximately six percent—of said complaints involved sexual harassment.
When it comes to throwing red meat from the campaign trail, however, championing effective laws already on the books lacks a certain partisan sizzle.
And so, with an eye toward the 2018 elections, Connecticut lawmakers are pushing legislation that targets small-business and entrepreneurs with a series of onerous regulations—hardly the type of legislation needed to reverse the state’s anemic 0.1 percent increase in job growth (a seven-year low).
Under the Time’s Up Act, employers with three or more employees would be required to provide training to all employees. This unprecedented expansion of the current law’s requirements would cost Connecticut’s private sector between $100 million and $130 million in new training fees alone. With the state struggling to attract and retain new industries and new jobs, increasing the cost of doing business in Connecticut is ridiculous—especially when the current sexual harassment laws are demonstrably effective.
Furthermore, current state law provides affirmative defenses for companies that have policies against sexual harassment; train their employees, properly investigate any claim of harassment; take immediate corrective action; and prevent retaliation. In other words, if an employee harasses a colleague and the company conducts a thorough investigation, stops the harassment, and guards against any and all forms of retaliation, that business faces no liability.
In providing such an affirmative defense for employers, Connecticut has done an admirable job balancing the proverbial carrot with the stick, rewarding employers who spend the time, and considerable expense, necessary to combat sexual harassment. The Times Up Act, however, would strip employers of this defense, destroying the existing public-private partnership that has been so effective in reducing sexual harassment in Connecticut workplaces.
Finally, the Times Up Act ignores a number of potential, practical reforms that could further strengthen Connecticut’s already formidable sexual harassment laws. For example, employers find navigating the CHRO process almost Kafka-esque in its procedural complexities and seemingly endless duration. Genuine reforms to the CHRO investigatory process could include efforts to streamline the process and resolve claims faster—as well as a more efficient method of dismissing cases that fail to meet certain basic criteria.
Such common-sense reforms won’t garner splashy headlines. But they will help ensure our state remains on the cutting edge of sexual harassment prevention—without sacrificing job growth or economic revitalization.Read More
On May 18, 2016, the U.S. Department of Labor finally released its rules updating the overtime regulations under the Fair Labor Standards Act (“FLSA”) which will take effect December 1, 2016. Not surprisingly, the updates significantly increase the salary threshold for executive, administrative and professional workers (“white collar employees”) and for highly compensated employees and include automatic updates to these thresholds going forward.
Under the new rules, any employee earning less than $47,476 a year ($913 a week) will be a covered non-exempt employee entitled to overtime. This new threshold, up from $23,660 ($455 a week), equals the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region. Additionally, unlike the previously static threshold, the new rules will be adjusted upward every three years to reflect cost of living adjustments with the first update taking effect on January 1, 2020.
The new rule also increased the total annual compensation threshold for highly compensated employees from an annual salary of $100,000 to $122,148 (linked to 90th % percentile of earnings of full-time salaried workers in the lowest-wage Census Region). Connecticut employers should not rely on this change as Connecticut does not recognize the highly compensated employee exemption.
Although the new rules do not change the “duties test” under the FLSA, they do amend the “salary basis test” to allow employers to credit nondiscretionary bonuses and incentive payments (including commissions) towards satisfying up to 10% of the new salary threshold, so long as employers pay those amounts on a quarterly or more frequent basis.
Given the new rules, employers must now either raise salaries of affected employees to meet the new threshold or begin treating these employees as nonexempt. Employers must ensure that all “exempt” employees meet the duties tests for their applicable exemption and earn a salary that is high enough to satisfy the new threshold. Employers should also take this opportunity to confirm that each “exempt” employee actually performs duties that meet their applicable exemption, regardless of the employee’s title or job description.Read More
As if the National Labor Relation Board’s aggressive expansion of social media protection wasn’t enough, Connecticut businesses must now contend with new legislation targeting employer’s online activity. On May 19, 2015, Governor Malloy signed into law “An Act Concerning Employee Online Privacy.” With this Act, Connecticut joins more than 20 other states to have legislation restricting an employer’s access to the social media accounts of applicants and employees. The Act, which goes into effect October 1, 2015, prohibits employers from requiring employees or applicants to:
- Provide their user name and password or any other access to an employee’s personal online account;
- Access an online account in the employers presence
- Accept an invite or other invitation from the employer to join a group associated with the employee’s online account. The Act applies to both private and public employees and offers few limited exceptions.
Fines for violations of the Act range from $25 against applicants and $500 against employees and can increase to $500 and $1,000 for continuing or repeat violations.
Fortunately, this new Act doesn’t cover any account created, maintained, used, or accessed by an employee or applicant for the employer’s business purposes. Furthermore, employers will still be able to monitor, review, access or block electronic data stored on an electronic communications device paid for by an employer, or traveling through or stored on an employer’s network.
Additionally, employers can conduct an investigation: based on receiving specific information about activity on an employee’s or applicant’s personal online account to ensure compliance with (a) applicable state or federal laws, (b) regulatory requirements, or (c) prohibitions against work-related employee misconduct.
An employer conducting these investigations can require an employee to provide access to a personal online account, but cannot require disclosure of the user name, password, or other means of accessing the personal online account. For example, an employee or applicant under investigation could be required to privately access a personal online account, but then provide the employer with access to the account content.
Connecticut’s regulatory environment just got a little more challenging, and, as a result, employers should review their Internet policies and practices to ensure compliance.Read More
For organized labor, Christmas has come early. Unfortunately, Americas’ employers received a lump of a coal
Late last week, President Obama’s National Labor Relation’s Board finalized the so-called “ambush election rules”—a gift that was at the top of every union’s wish list. By speeding up the timeframe for representation elections, this new regulation will significantly handicap employers’ ability to contest union organizing drives.
As Siegel O’Connor has previously noted, the average time between when a union files a representation petition—the first step in organizing a workplace into a union—is 38 days, but this new rule would reduce that to as few as 10 days. Consequently, unions could launch guerrilla-organizing campaigns that, because of the compressed timeline, deny management its legal right to discuss with their employees whether a union has anything worthwhile or constructive to offer them or the company.
Employers across the country have strongly criticized the change. For instance, the Retail Industry Leaders Association (RILA) issued the following statement:
This flawed rule is harmful to both workers and employers. By dramatically changing the procedures that govern union elections, the rule limits the information available to employees prior to entering the voting booth, potentially subjects employees to harassment at home and undermines the due process rights of employers.
Bottom Line for Employers
Fortunately for America’s employers, these new regulations don’t go into effect until April 2015; additional legal and legislative challenges are likely. In the interim, however, Employers should contact their respective members of Congress and demand an end to the Obama NLRB’s hyper-partisan antics. Employers are also urged to contact their labor counsel and begin developing a strategy for contesting ambush elections.Read More
Earlier this week, the National Labor Relations Board (NLRB) issued a decision (Purple Commc’ns Inc) giving employees the right to use employers’ email systems for non-business purposes—including union organizing. This ruling overturns the Board’s 2007 decision in Register Guard, and opens up yet another front in the partisan Board’s war against employers.
In its decision, the Board declared the analysis in Register Guard to be “clearly incorrect,” and one that focuses “too much on employers’ property rights and too little on the importantance of email as a means of workplace commutation.” As a result of this ruling, agues the Board, the NLRB “failed to adequately protect employees’ rights under the Act” and abdicated its responsibility to “adapt the Act to the changing patterns of industrial life.” Indeed, throughout its analysis, the Board justifies its ruling by referencing email’s new role as the “primary means of workplace discourse.”
Having dismantled Register Guard, the Board will now adopt a “presumption that employees who have been given access to the employer’s email system in the course of their work are entitled to use the system to engage in statutorily protected discussions about their terms and conditions of employment while on nonworking time.”
In an attempt to mollify employers, the Board offers the following three limitations on employee’s ability to use email for organizing purposes:
- This decision applies only to employees who have been granted access to the employer’s email system in the course of their work; employers are not required to provide such access
- Employers may justify a total ban on non-work use of email by demonstrating that special circumstances make the ban necessary to maintain production or discipline.
- This decision does not address nonemployees or any other type of electronic communication.
These limitations, however, offer little solace to employers already struggling to comply with the avalanche of union-friendly regulations churned out by an increasingly hostile NLRB.
A Powerful Dissent
The Board’s decision in Purple Commc’ns Inc., is unprecedented. As Board Member Philip Miscimarra notes in his dissent, “The [National Labor Relations] Act has never previously been interpreted to require employers, in the absence of discrimination, to give employees access to business systems and equipment for NLRA-protected activities that employees could freely conduct by other means.” Furthermore, it is all but impossible “to determine whether or what communications violate restrictions against solicitation during working.”
Member Johnson, who penned his own 32-page dissent, hammered the majority’s decision for essentially forcing employers to subsidize speech in violation of the U.S. Constitution. Johnson argues, “The First Amendment violation is especially pernicious because the Board now requires an employer to pay for its employees to freely insult its business practices, services, products, management, and other coemployees in its own email. All of this is now a matter of presumptive right…”
Looking forward, Johnson’s dissent warns that “Taken to its extreme, the majority’s…rationale would just as easily apply to taking over an employer auditorium, or conference room in the middle of the workday during an employer presentation/conference.
The Road Ahead
On a practical level, however, employers must now re-evaluate their internal rules and regulations regarding employee use of company email. Specifically, Purple Commc’ns Inc has now rendered most employee handbooks obsolete; employers should, over the next few weeks, review their employee email communications policy, and contact their labor counsel to examine how this stunning new decision will impact existing company policies.Read More
Earlier this month, the Connecticut legislature wrapped up its 2014 regular session—a whirlwind few months that left employers scrambling to adjust to several new laws and regulations.
Primarily, Connecticut employers should be concerned about the legislature’s decision to increase the minimum wage. Under SB 32 (“An Act Concerning Working Families’ Wages”). Connecticut’s minimum wage will (as of January 1 of each of the next three years) increase to:
- $9.15 per hour in 2015
- $9.60 per hour in 2016
- $10.10 per hour in 2017
Furthermore, hotel, bar, and restaurant employees’ minimum wages (with the corresponding tip credit), will also change
The legislature’s decision to raise the minimum wage will negatively impact not only employers, but working-class families as well. Indeed, minimum-wage increases reduce the number of entry-level minimum-wage jobs available—actually hurting many of the workers the legislation endevors to help.
Connecticut employers should review all policies and procedures to ensure compliance with these changes to the minimum wage law.Read More
Breaking News: Last week, the National Labor Relations Board (NLRB) announced that it’s moving to shorten the length of time in which a labor union certification election is held.
The Basics: According to the Board, this new rule would:
- Allow for electronic filing and transmission of election petitions and other documents
- Ensure that employees, employers and unions receive and exchange timely information they need to understand and participate in the representation case process
- Streamline pre- and post-election procedures to facilitate agreement and eliminate unnecessary litigation
- Include telephone numbers and email addresses in voter lists to enable parties to the election to be able to communicate with voters using modern technology
- Consolidate all election-related appeals to the Board into a single post-election appeals process.
Impact on Employers: Currently, the average time between when a union files a representation petition—the first step in organizing a workplace into a union—is 38 days, but this new rule would reduce that to as few as 10 days. Consequently, unions could launch guerrilla-organizing campaigns that, because of the compressed timeline, deny management its legal right to discuss with their employees whether a union has anything worthwhile or constructive to offer them or the company.
As noted in a letter from the U.S. House of Representatives labor committee to NLRB chairman Mark Gaston Pearce, a former union attorney, “[t]his rule will seriously limit employer free speech and undermine employee free choice.” The NLRB announcement also drew criticism from business groups such as the National Retail Federation.
Furthermore, employers need to be concerned about the impact on their employees’ privacy. As unions are exempt from some state laws against stalking or trespassing when their members are engaged in organizing activities, as a report from the U.S. Chamber of Commerce revealed in 2012, questions as to how and to what extent unions will use employees’ personal information remain unanswered.
What’s Next: The Board will be accepting public comments on the new proposed rulemaking through April 7, 2014. The Board will also hold a public hearing during the week of April 7.
Bottom line for Employers: With a clear Democratic majority, the Board will likely move quickly to implement this new rule. However, on March 5, 2014, the U.S. House of Representatives Education and Workforce Committee will be holding a hearing on the ambush election proposal. We will continue to keep you updated as the NLRB continues to push its pro-union agenda.Read More
Last month, unions across America received a significant boost when the Sixth Circuit Court of Appeals upheld a 2011 ruling by the National Labor Relations Board that allowed unions to organize smaller “micro units” of workers.
The 2011 case, Specialty Healthcare, 357 NLRB No. 83 (Aug. 25, 2011), aff’d sub nom, 727 F.3d 552 (2013), involved a union that wanted to try and organize a group of nonprofessional nursing assistants—despite the employer’s argument that other nonprofessional employees should have been included in the unit. In its ruling, the Board upheld the union’s position, while noting that if an employer believes employees should be included in a particular unit, it is the employer’s burden to demonstrate those workers “share an overwhelming community of interest.”
In its review of the Specialty Healthcare decision, the Sixth Circuit determined that the Board has “wide discretion,” in determining the constitution of a bargaining unit”—unless “the employer establishes that [the Board’s decision] is arbitrary, unreasonable, or an abuse of discretion.”
The Board’s decision in Specialty Healthcare turned 75 years of labor law on its head. And now, the Sixth Circuit has doubled-down on this seismic legal shift by affirming the Board’s decision. Yet, these rulings might still backfire on organized labor. Often, unions use micro units to gain a foothold in an employer’s workforce—the proverbial camel’s nose under the tent. In order to prevent unions from using the Specialty Healthcare decision to establish organizing beachheads, employers are now going to fight harder to keep their companies union-free.
Such an unanticipated consequence might toss a bit of cold water on organized labor’s post-Specialty Healthcare celebrations, but employers should still be wary. The Sixth Circuit’s decision will not only pave the way for an increase in union organizing activity; it will likely also embolden a National Labor Relations Board that already seems intent on giving organized labor an unfair advantage.Read More
Do pre-employment criminal background checks discriminate against minorities? Not according to the U.S. District Court for the District of Maryland.
Last week, the U.S. District Court for the District of Maryland ruled that the Equal Employment Opportunity Commission failed to show that a nationwide event planning company’s use of criminal background and credit-checks resulted in a disparate impact against black and make job applicants.
In a stunning rebuke to the controversial Enforcement Guidance Regarding Consideration of Arrest and Conviction Records in Employment Decisions, the District Court hammered the EEOC’s evidence, dismissing its analyses as “flawed,” “skewed,” “rife with analytical errors,” “laughable,” and “an egregious example of scientific dishonesty.” Specifically, the court determined that one EEOC expert’s analysis focused on an unrepresentative section of applicants to fit the commission’s theory that pre-hire employee criminal background checks have a disparate impact on minorities.
EEOC: Where’s the Evidence?
The reports furnished by the EEOC were not the only thing that concerned the court; the EEOC also failed to meet its burden of raising triable disparate impact claims because “the commission did not identify a specific employment practice responsible for the alleged impact.” Citing Wards Cove Packing Co. v. Atonio, the court held that “under Title VII, it is not enough to show that ‘in general’ the collective results of a hiring process cause disparate impact. Statistical analysis must isolate and identify the discrete element in the hiring process that produces the discriminatory outcome.”
While the EEOC is still considering an appeal, the court’s ruling was clear: “it is simply not enough to demonstrate that criminal history or credit information has been used,” to advance a discrimination claim based on disparate impact. Granted, the issue of criminal background checks and disparate impact claims remains far from settled, last week’s U.S. District Court ruling should offer encouragement to employers drowning in red tape and over-zealous regulation.Read More
Earlier this month, the United States Court of Appeals for the Second Circuit upheld a controversial NLRB decision—Mezonos Maven Bakery, 357 NLRB No. 47—regarding the award of backpay to undocumented aliens. Specifically, this case considered whether “undocumented workers who have engaged in fraud or criminal activity in violation of the Immigration Reform and Control Act (IRCA) in obtaining or continuing their employment are entitled to backpay where their employer…hired and retained them knowing they were undocumented.”
Finding that the instant matter was materially different from the Board’s decision in Hoffman Plastic, the administrative law judge initially found in favor of the employees. In Hoffman Plastic, the Board‘s holding precluded backpay in a scenario where the alien “violates the IRCA by presenting the employer with fraudulent documents,” and the “employer is unaware of the fraud.”
Specifically, the ALJ ruled that the instant matter was materially different from Hoffman Plastic because the employer—not the employee—violated the IRCA. As a result, the ALJ concluded that a backpay remedy was necessary. The Board, however, disagreed.
The Board Applies Hoffman Plastic
In August 2011, the Board declined to adopt the ALJ Order. According to the Board, Hoffman Plastic’s “holding is categorically worded” with “no distinction based on the identity of the IRCA violator.” As a result, Hoffman Plastic “broadly precludes backpay awards to undocumented workers regardless of whether it is they or their employer who has violated the IRCA. Indeed, “regardless of which party violated the IRCA, the result is an unlawful employment relationship.
A Matter of Public Policy
The Second Circuit Court of Appeals has weighed in as well, upholding the Board’s interpretation of Hoffman Plastic. In its decision, the Second Circuit places particular emphasis on public policy concerns: “Awarding backpay would ‘not only trivialize the immigration laws,” but would also “condone and encourage future violations.” Quoting Hoffman Plastic, the Second Circuit addressed the ALJ’s suggestion that aliens who did not present fraudulent documents but who are in the U.S. illegally, noting that it sees “no reason to think that Congress nonetheless intended to permit backpay where but for an employer’s unfair labor practices, an alien-employee would have remained in the United States illegally, and continued to work illegally, all the while successfully evading apprehension by immigration authorities. “
The Second Circuit did. However, remand the matter back to the Board for consideration of one additional issue: Whether to grant petitioners requested remedy of reinstatement contingent on the production of work authorization documents.Read More