On March 22, 2023, the National Labor Relations Board’s (“NLRB”) General Counsel Jennifer Abruzzo issued Memorandum GC 23-05 (the “Memo”), which provides additional guidance on the recent NLRB decision in McLaren Macomb, 372 NLRB No. 58 (2023).

As we recently reported, McLaren held that employers violate the National Labor Relations Act (“NLRA”) when they merely offer non-supervisory/management employees, both union and non-union, severance agreements that contain overly broad confidentiality and/or non-disparagement provisions.

The Memo, which was issued to “assist Regions [of NLRB offices] in responding to inquiries from workers, employers, labor organizations and the public about implications stemming from that case,” responds to some common inquiries regarding the impact of the McLaren decision. Among other things, the Memo makes clear the following:

  • Severance agreements are not banned outright.
  • Whether or not the employee actually signed the severance agreement is irrelevant for purposes of finding a violation under the Act since the proffer itself is inherently coercive.
  • While supervisors generally are not protected by the NLRA, it would be violative for an employer to retaliate against a supervisor who refuses to proffer to an employee an unlawful separation agreement.
  • McLaren applies retroactively to agreements proffered before February 21, 2023.
  • Agreements generally should not be found to be void in their entirety because they include unlawful provisions, even if the agreement does not include a severability clause.
  • Disclaimer language regarding rights afforded under the NLRA in the agreement may not necessarily cure overly broad provisions.
  • Confidentiality and non-disparagement provisions that are narrowly tailored may be found lawful. 

While the Memo provides Abruzzo’s opinion on many frequently asked questions, others remain. Employers should review the Memo, found here, in order to educate themselves on how the NLRB is going to apply and interpret McLaren going forward (in the absence of an appeal and further direction from the courts, which may be yet to come).

Murtha Cullina attorneys are available to assist you with revising your severance agreements in accordance with the new rules and will continue to follow and report on any further developments regarding this decision.

New York State’s Pay Transparency Law is set to take effect on September 17, 2023. The law was amended on March 3, 2023, well in advance of its effective date, to clarify, limit and expand various employer obligations. New York joins New York City, California, Rhode Island and Washington, D.C. in passing pay transparency legislation that requires covered employers to list compensation ranges for all job advertisements and postings.   

Here are some of the new law’s basic requirements:

  • The law applies to all private employers with at least four employees. 
  • Covered employers must include a minimum and maximum annual salary or hourly compensation range in all advertisements for a job, promotion or transfer opportunity that will be performed, at least in part, in New York. Although when first enacted the law seemed to apply to remote out-of-state workers, the amendment restricts the new law’s application to jobs that are physically performed in New York, so it would not apply to remote out-of-state workers, unless (and that’s a big unless) the out-of-state worker reports to a supervisor or work location that is located in New York.
  • Pay transparency requirements apply to internal and external job postings.
  • Covered employers must believe in good faith at the time of the posting that the salary range is accurate. 
  • For commission-based jobs, a general statement that compensation is based on commission satisfies an employer’s obligation to disclose a salary range in the posting.
  • The new law also imposes a record-keeping obligation on employers.  Covered employers are now required to keep and maintain records showing compliance with the new law. Although the amendment removed the requirement that employers maintain a history of compensation ranges for each job, practically speaking it would be best if employers did, in fact, maintain such information.  

The New York State Department of Labor has regulatory authority over the new law and, hopefully, will issue guidance before the effective date. Any individual claiming to be aggrieved by an employer’s violation of the new law may file a complaint with the Commissioner of Labor. 

New York City employers must still comply with New York City’s Pay Transparency Law, which was passed on November 1, 2022, and covered here. The New York State Pay Transparency Law explicitly states that it does not preempt local ordinances, so New York City employers need to comply with both laws.

New York employers should review their job postings and advertisements to ensure compliance with all pay transparency laws. Further, New York employers should review their recordkeeping procedures and, if not already done, maintain a record of compensation for posted positions. As always, the attorneys in Murtha Cullina’s Labor & Employment Group remain ready to advise on these and other issues.

On February 21, 2023, the National Labor Relations Board (the “Board”) issued a decision that returns to previous precedent, holding that employers may not offer employees severance agreements that require employees to broadly waive their rights under the National Labor Relations Act (“NLRA”).

Under the Board’s new rule issued in McLaren Macomb, 372 NLRB No. 58 (2023), which applies to union and non-union employees alike, the “mere proffer” of a severance agreement that conditions receipt of benefits on the “forfeiture of statutory rights”—like the acceptance of overbroad confidentiality and non-disparagement provisions—“plainly has a reasonable tendency to interfere with, restrain, or coerce the exercise of those rights [afforded under Section 7 of the NLRA]” in violation of Section 8(a)(1) of the NLRA. Prior to this, two of the Board’s 2020 decisions in Baylor University Medical Center and IGT d/b/a International Game Technology held that it was not unlawful, by itself, for an employer to offer similar severance agreements with such clauses in return for severance payments.

The decision joins a wider landscape of protective measures in recent years that are aimed at discouraging or prohibiting confidentiality and/or non-disparagement provisions in settlements or other agreements. For instance, the Speak Out Act passed by Congress last year and signed into law by President Biden on December 7, 2022, makes void any nondisclosure or non-disparagement clause that attempts to preemptively prohibit employees from talking about potential future instances of sexual harassment or assault in the workplace. Previously, other similar federal laws prohibited forced arbitration in sexual assault and sexual harassment disputes, as well as eliminated an employer’s ability to make tax deductions for settlements, payouts, and attorney’s fees in cases related to sexual harassment or abuse if such payments were subject to a nondisclosure agreement.

While McLaren involved language the current Board deemed overbroad, the question is still open as to whether employers can maintain lawful confidentiality and non-disparagement provisions if they are narrowly tailored to mitigate the concerns contained in the decision. Employers should review any non-disparagement and confidentiality provisions they are proffering to employees or potential employees, regardless of the type of document in which the clauses are incorporated. Moreover, a well-drafted “severability” provision may help save the rest of an agreement if certain provisions are found to be unlawful or unenforceable.

Murtha Cullina will closely follow and report on any federal court appeal of the McLaren decision, as well as any related decisions and/or legislation concerning confidentiality and non-disparagement clauses.

Contact the authors of this alert Emily McDonough Souza, Salvatore Gangemi and Patricia Reilly to learn more about how this decision can impact your business.

Last month, the Equal Employment Opportunity Commission (EEOC) released its Draft Strategic Enforcement Plan for 2023- 2027 (SEP), and invited the public to submit comments by February 9, 2023.

The EEOC continues to emphasize the elimination of barriers in recruitment and hiring, and seeks to prioritize its consideration of policies and practices that incorporate artificial intelligence (AI).

While the Draft Strategic Enforcement Plan also lists more traditional tools as impacting hiring and recruitment (e.g., job advertisements, limiting access to training, etc.), by listing AI and automation tools first, the EEOC highlights its concern over AI and its increasing use (and potential abuse) by employers. During recent public hearings, the EEOC heard testimony about the need for oversight and auditing of AI tools, which, according to testimony and studies, can result in greater discrimination than human-based tools.

The Draft SEP is not the first time the EEOC has considered AI in employment decision making. In May 2022, the EEOC issued guidance on the impact of AI on applicants and employees with disabilities – The Americans with Disabilities Act and the Use of Software, Algorithms, and Artificial Intelligence to Assess Job Applicants and Employees. More recently, the EEOC has emphasized that AI can also facilitate discrimination on the basis of age, race and sex.

Last September, we blogged about the recent New York City law regulating the use of AI in employment decisions, which took effect on January 1, 2023, but with its enforcement subsequently deferred to April 15, 2023 due to the high number of public comments submitted to The Department of Consumer and Worker Protection (DCWP), the law’s enforcement authority.

Although AI permits the screening of thousands of employment applications in a fraction of the time it would take for a human, certain “filters” that reject individuals from consideration based on seemingly neutral (or not so neutral) factors could lead to intentional discrimination.

For example, it would appear to be easy to use AI to screen out applicants, who have been out of school for a long time or over a certain age. Consequently, without more oversight these new tools can continue to perpetuate old problems.

No employer should consider the use of AI without first learning how these tools work, and how they impact different classes of individuals. In addition, employers should keep in mind their obligation to consider requests for reasonable accommodations on the use of AI.

We will keep you informed of further developments in this area. If you have any questions, please contact Salvatore Gangemi, or any other attorney in Murtha’s Labor and Employment Group with whom you have previously worked.

On January 1, 2023, Connecticut Public Act No. 21-32[1] the “Clean Slate” law expanded protections for applicants and employees with criminal records. Employers are prohibited from requesting information about, making hiring decisions based on, or discriminating or discharging employees based on criminal records that have been erased.

The new law allows for erasure of criminal convictions depending on the classification of conviction and the date on which the judgment of conviction was entered. Eligible offenses include most misdemeanors, most class D and E felonies, and most unclassified felonies with a possible prison sentence of five years or less.

Specifically:

  • Any classified or unclassified misdemeanor offenses will be erased seven years from the date on which the court entered the person’s most recent judgment of conviction;
  • Any class D or E felony or unclassified felony carrying a term of imprisonment of five years or less will be erased ten years from the date on which the court entered the person’s most recent judgment of conviction;
  • Any family violence crimes and sexual offenses are ineligible for erasure.

Erasures for qualifying convictions will occur automatically for offenses occurring on or after January 1, 2020. If a person committed a misdemeanor before reaching the age of 18, such convictions will be automatically erased if the offense occurred on or after January 1, 2000 and before July 1, 2012. Other offenses can be erased by way of petition.

In some cases, for example education employees, inquiry into criminal record is permissible. In those cases, the clean slate law requires a notice, in clear and conspicuous language, defining erased records and informing the applicant that they not required to disclose arrests or convictions that have been erased. Further, employers are prohibited from advertising employment opportunities in a way that discriminates against individuals with erased criminal records.

Enforcement authority rests with the Connecticut Department of Labor, the Connecticut Commission on Human Rights and Opportunities, and the Connecticut Superior Courts. Employees and applicants can file complaints about violations of this law with any of these authorities. Individuals filing civil actions may be entitled to injunctive relief, damages, and other remedies.

Employers should ensure their employment opportunity advertisements and applications are compliant with the new law. As always, the attorneys at Murtha Cullina remain willing and able to advise on these and other employment issues.

[1] https://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&which_year=2021&bill_num=1019

On December 9, 2022, Governor Hochul signed legislation expanding New York’s required accommodations for breastfeeding in the workplace. The new law takes effect 180 days after signing, on June 7, 2023.

New York employers were already required to provide employees with reasonable break times and to make reasonable efforts to provide a space for employees to pump breast milk.

The new law expands the existing accommodations by requiring all New York employers to provide employees with convenient access to a private pumping space that includes access to running water, electricity and a working space. The space must be separate from a restroom and employees must be allowed to access the space each time they have a reasonable need to pump breast milk. If the workplace has access to refrigeration, employees must be able to access the refrigerator for the purpose of storing expressed milk.

Additionally, employers are required to adopt a written policy regarding employee rights when breastfeeding in the workplace. Employers must provide this written policy to employees at the time they are hired and annually thereafter. Employers must also provide this notice to employees returning to work after the birth of a child. New York City implemented similar requirements in 2018. We previously covered New York City’s requirements here.

All New York employers should review their lactation accommodations and ensure they have written policies that comply with the new law. As always, we are available to advise on these and other issues.

Twitter Sued for Alleged Violations of Federal and State WARN Acts (1)

Are you confused about the lawsuit filed on November 3, 2022 against Twitter claiming that its recent and impending layoffs violate the federal Worker Adjustment and Retraining Notification Act (the “WARN Act”) and state laws? Here’s what you need to know about the WARN Act and the Twitter lawsuit.

The WARN Act requires employers to provide employees with written notice 60 days in advance of covered mass layoffs. WARN and its implementing regulations define “mass layoffs” as those resulting in an employment loss during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33% of the employer’s active workforce.

Further, “employment loss” is not limited to termination. The term includes employment termination, layoffs exceeding 6 months, or a 50% or greater reduction of an employee’s hours each month of any 6-month period. There are also look-back and look-forward provisions in WARN to prevent employers from structuring layoffs in a way that would otherwise avoid triggering WARN’s notice requirements.

Twitter CEO Elon Musk notified employees on November 3 that Twitter would begin laying off employees in early 2023, but that all employees would receive severance pay. However, one of the five named plaintiffs alleged that he was terminated without notice or severance pay. Further, the complaint alleges that in the coming weeks, Twitter is expected to circulate separation agreements to employees containing a release of rights under state law and the WARN Act. The plaintiffs also seek to prevent Twitter from requesting and securing these releases without advising potential class members of the suit or of their rights under such laws. The plaintiffs’ lawyers want to make sure that there is a meaningful class to represent in the lawsuit; that would not be the case if employees signed off on releases.

The plaintiffs seek injunctive relief, forcing Twitter to conform to the federal and state WARN Acts, which both specify a mandatory 60-day notification period ahead of mass layoffs. Further, the plaintiffs seek injunctive relief forcing Twitter to inform employees of the class action before the separation agreements containing releases are circulated. The plaintiffs are also requesting compensatory damages, including expenses and wages owed.

While it cannot be determined at this point if Twitter actually violated the WARN Act, employers need to consider WARN and state “mini-WARN” laws before conducting mass layoffs or plant closings. An employer that violates the federal WARN act is liable to each affected employee for an amount equal to back pay and benefits for the period of violation, up to 60 days.

If you are considering layoffs, hourly reductions, or plant closings, the labor and employment attorneys at Murtha Cullina are ready and able to assist you in complying with these and other laws.

Contact the authors Salvatore Gangemi and Alyssa Ferreone.

Join us on December 9, for our Labor and Employment Group’s annual webinar on updates and developments in labor and employment law. Topics to be discussed include state legislative updates in CT, MA and NY, conduct and behavior standards under the ADA, aging at work, free speech in the workplace, pay transparency changes, paid family medical leave, and recent developments in employee benefits law and immigration. For more information and register.

NYC Pay Transparency Law became effective on November 1, 2022.

What does this mean for employers?

If you have four or more employees (including independent contractors) you are required to post minimum and maximum salary ranges for available positions for the benefit of current and prospective employees.

Failure to comply can result in significant civil penalties and monetary damages to affected employees.

This new law is part of a growing trend across the country in other states to encourage pay equity.

The law was originally supposed to go into effect on May 15, 2022, but after receiving pushback from various groups over ambiguities in the law, lawmakers enacted amendments and postponed its effective date until November 1, 2022.

The New York City Council amended the law to clarify:

  • Both hourly wage and salaried jobs are subject to the statute
  • Only current employees may bring an action against their employer for failing to comply

A statewide bill proposing a similar pay transparency law was passed by the New York State Legislature in June 2022. The bill is currently under consideration by Governor Hochul, and, if enacted, will take effect 270 days after it is signed into law.

The NYC Commission on Human Rights has the authority to enforce violations on behalf of applicants.

Here’s what employers can do to prepare themselves for the enactment of this new law.

  • Be consistent across the board in setting compensation levels for job positions.
  • Conduct an audit of pay practices to ensure that there are no existing discrepancies that point to discrimination.
  • Don’t rely on job titles in setting salaries and wages. Instead, make sure job responsibilities and duties dictate salary or wage ranges. This is an opportunity to review job titles to ensure that they refer to different jobs, and do not t perpetuate disparate pay rates or practices.

For New York State employers outside of New York City, there’s no time like the present to begin complying with the law’s requirements so that they can hit the ground running once it’s signed into law (which it will be).

Read our previous alert to learn more about the law. Reach out to Sal Gangemi for more information about how the NYC Pay Transparency Law may affect your business.

EEOC Issues New Guidance on Use of Artificial Intelligence in Employment Selection Procedures

The New York City Council recently enacted an ordinance banning artificial intelligence (“AI”) in employment decisions unless the technology has been subject to an independent bias audit within a year of use.

Many employers have been using AI in employment decisions for years without regulation. This technology can range from algorithms finding ideal candidates to software used to asses a candidate’s performance during screening interviews. While AI tools promote efficiency, reduce costs, and can help employers make informed decisions, technology can run afoul of discrimination laws by reinforcing bias or screening out candidates of protected classes. Continue Reading New York City Council Passes Law Regulating Use of Artificial Intelligence in Employment Decisions

New York Workplace Sexual Harassment Hotline Now Operational

In March 2022, Governor Kathy Hochul signed legislation amending the New York State Human Rights Law to establish a sexual harassment hotline directly to the New York State Division of Human Rights (NYSDHR). The hotline (800-HARASS-3), which is now active, is intended to be staffed by pro bono lawyers experienced in counseling individuals on sexual harassment. Contact with the hotline does not constitute the filing of a harassment complaint, and individuals intending to file a complaint with the NYSDHR would still be required to follow existing procedures for doing so. Continue Reading New York Workplace Sexual Harassment Hotline Now Operational