Recent Case Shows Risks When Employers Fail to Sign Their Own Signature Blocks

Employment agreements—such as employment contracts, confidentiality agreements, restrictive covenant agreements, arbitration agreements, and others—often contain signature blocks for both the employee and employer.  Even when employers procure the employee’s signature, in many cases the employer signature block is left blank.  Does this pose a problem when the employer attempts to enforce the agreement?

A recent Fifth Circuit decision says that under Texas law, the answer is “yes” if language in the agreement or other circumstances indicate that the employer’s signature is necessary to form the agreement.   The case of Huckaba v. Ref-Chem, L.P., 2018 WL 2921137 (5th Cir. June 11, 2018) involved an employer’s attempt to enforce an arbitration agreement with an unsigned employer signature block.  The court noted that whether a signature is required to form an agreement is dependent on the parties’ intent.  Signatures are not required when the employee and employer have given their consent to the agreement and there is no evidence that the parties intended that both signatures would be required.

In the case at hand, the court found that the arbitration agreement indicated that both signatures were required based on the following evidence:

  • A statement that “[b]y signing this agreement the parties are giving up any right they may have to sue each other”;
  • a clause prohibiting modifications unless they are “in writing and signed by all parties”; and
  • the employer signature block itself.

Notably, the fact that the agreement also contained a statement that the employee’s continued employment constituted consideration for the agreement was not enough for the court to conclude that no employer signature was required.  The court indicated, however, that had the agreement contained language indicating that continued employment constituted the employee’s acceptance of the agreement (not merely consideration), the result might have been different.

The Bottom Line for Employers

The Huckaba decision involved Texas contract law, and other states’ laws on this issue may be different.  But as to agreements covered by Texas law, and in the wake of this decision, employers should carefully consider whether an employer signature block in its agreements is needed.  Texas law is clear that an employer may bind an employee to an agreement without the company’s signature as long as there are other indications that the employer intended to be bound, such as when the employer offers the agreement to the employee and indicates that either the employee’s signature or continued employment will equal acceptance of the offer, thereby creating a binding agreement.

If the employer deems it necessary to include an employer signature block, it should implement protocols to assure that an employer representative actually signs the agreement—either before the agreement is provided to the employee or after the employee returns a signed copy.

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Employee Handbooks: Some Welcome Guidance from the NLRB On What Your Handbook Should (and Should Not!) Say

On June 6, 2018, the General Counsel’s Office of the National Labor Relations Board (“NLRB”) issued its “Guidance on Handbook Rules Post-Boeing” (“Guidance”).  The Guidance follows up and clarifies the recent Board decision in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017) and may be accessed here.

Refresher on the Boeing decision: The Boeing decision set out a new standard for evaluating workplace policies and discussed when those policies might run afoul of an employee’s Section 7 rights under the National Labor Relations Act (“NLRA”) to engage in protected concerted activity.  The gist of the Boeing decision was to divide workplace policies into three categories: (1) policies that are generally lawful because the policies, as reasonably interpreted, do not interfere with an employee’s Section 7 rights or because the potential adverse impact on those rights is outweighed by a business justification associated with the policy, (2) policies warranting individualized scrutiny because they are not obviously lawful or unlawful, and (3) policies that are generally unlawful because they would prohibit or limit NLRB-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the policies.

The post-Boeing Guidance issued on June 6 provides specific advice on the placement of some common workplace policies in the three categories noted above.  The following is a summary of the policies discussed in the Guidance and placement of those policies within the respective categories.  Also included are some examples of common policy verbiage cited by the NLRB in the Guidance.

Category 1 Policies: Policies That Are Generally Lawful To Maintain

  1. Civility Rules: “Rude, discourteous or unbusinesslike behavior is forbidden”
  2. No-Photography Rules And No-Recording Rules: “Employees may not record conversations, phone calls, images or company meetings with any recording device without prior approval”
  3. Rules Against Insubordination, Non-Cooperation, Or On-the Job Conduct That Adversely Affects Operations: “Being uncooperative with supervisors . . . or otherwise engaging in conduct that does not support the [Employer’s] goals and objectives is prohibited”
  4. Disruptive Behavior Rules: “Disorderly conduct on [Employer] premises and/or during working hours for any reason is strictly prohibited”
  5. Rules Protecting Confidential, Proprietary, And Customer Information Or Documents: “Do not disclose confidential financial data, or other non-public proprietary company information. Do not share confidential information regarding business partners, vendors, or customers”
  6. Rules Against Defamation Or Misrepresentation: “Do not email messages that are defamatory”
  7. Rules Against Using Employer Logos Or Intellectual Property: “Do not use Company logo, trademark, or graphic [without] prior written approval”
  8. Rules Requiring Authorization To Speak For Company: “The company will respond to media requests for the company’s position only through the designated spokespersons”
  9. Rules Banning Disloyalty, Nepotism, Or Self-Enrichment: “Employees may not engage in conduct that is disloyal . . . competitive, or damaging to the company such as illegal acts in restraint of trade or employment with another employer”

Category 2 Policies: Policies Warranting Individualized Scrutiny

  1. Broad conflict-of-interest policies that do not specifically target fraud and self-enrichment;
  2. Confidentiality rules broadly encompassing “employer business” or “employee information” (as opposed to confidentiality rules regarding customer or proprietary information);
  3. Policies regarding disparagement or criticism of the employer;
  4. Policies regulating use of employer’s name (as opposed to logo/trademark);
  5. Policies generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf);
  6. Policies banning off-duty conduct that might harm the employer (as opposed to rules banning insubordinate or disruptive conduct at work);
  7. Policies against making false or inaccurate statements (as opposed to rules against making defamatory statements).

Category 3 Policies: Policies That Are Unlawful To Maintain

  1. Confidentiality Rules Specifically Regarding Wages, Benefits, Or Working Conditions: “Employees are prohibited from disclosing salaries, contents of employment contracts . . .”
  2. Rules Against Joining Outside Organizations Or Voting On Matters Concerning The Employer: A policy that would be interpreted as restricting membership or work for a union or requiring employees to remove themselves from discussing or voting on any matters concerning the employer

The Bottom Line for Employers: Employers should take this opportunity to review their employee handbooks in light of the Guidance.  The Guidance provides some welcome stability following the pre-Boeing precedent in which many common policies were challenged and often struck down by the NLRB.  It also provides employers with some confidence as to what policies generally will not run afoul of the NLRB and where they may have some risk.  That said, there are still a number of outstanding questions the Guidance does not address, such as how will the NLRB treat rules regarding mandatory participation in workplace investigations, use of an employer’s e-mail systems, and confidentiality of workplace investigations and/or arbitration proceedings.  And, of course, the Boeing decision itself was limited to the maintenance of facially neutral policies.  Policies that specifically ban protected concerted activity, or that are enforced in an unlawful manner (e.g., in response to organizing or other protected concerted activity), remain unlawful.

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“But We Can’t Do That” — Documenting Undue Hardship Can Help Protect Employers Against ADA Claims

When a disabled employee requests an ADA accommodation, employers should have an interactive discussion to determine what accommodations might work. And a big part of that discussion is asking the employee to suggest possible accommodations.

But if an employee suggests an accommodation that would cause the employer an “undue hardship,” the employer can reject that accommodation. A requested accommodation that creates a hassle or minor burden is not an undue hardship. Instead, an accommodation creates an undue hardship if it subjects the employer to significant difficulty or expense. Courts take into account an individualized assessment of not only the nature and cost of the requested accommodation but also the employer’s resources and the potential impact of granting the requested accommodation on the employer’s operations. This is a high bar to meet, because it requires the employer to identify specific and significant difficulties or expenses the suggested accommodation would create.

Often, employers reject requested accommodations based on a sense that the suggested accommodation “just would not work.” But because the ADA requires a particular showing of the difficulty or expense the requested accommodation would create, the employer should carefully document and justify the underlying reasons why the accommodation “would not work.”  Failing to identify these underlying reasons—and to document them—can increase the chance that an employer has failed to carry its burden to show that an undue hardship existed, and so can have significant consequences later on if there is litigation.

For example, a court denied an employer summary judgment in part because it had failed to document its reasons why the employee’s request for “at least three more months” of leave after FMLA leave was exhausted would be an undue hardship. Bernhard v. Brown & Brown of Lehigh Valley, Inc., 720 F. Supp. 2d 694, 702–03 (E.D. Pa. 2010). Similarly, a court rejected the argument that 29 absences in 18 months and an absence for an entire additional month created an undue hardship because the employer failed to offer evidence backing up how these absences impacted the employer’s operations. Pearson v. Univ. Hosps. of Cleveland, Inc., No. 1:06-cv-1974, 2008 WL 1808797, at *8 (N.D. Ohio. Apr. 21, 2008).

And the EEOC has recently begun to focus on the lack of undue hardship documentation in numerous internal rulings on charges brought by federal employees against federal agencies. (In the past, such rulings have hinted at the EEOC’s future enforcement priorities in actions against private employers.) For example, one agency denied an employee’s request to work from home for additional days each week because it said that that would hurt productivity. But the EEOC found the accommodation denial to be improper because the agency failed to document how additional work from home would hurt the employee’s productivity. Doria R. v. Nat’l Sci. Found., EEOC Appeal No. 0120152916 (Nov. 9, 2017). Similarly, the EEOC rejected a denial of additional work from home when the employee’s managers argued that her job required face-to-face interactions and there would not be enough remote work to keep her busy because—again—the agency failed to document how there would be insufficient remote work to keep her busy. Alejandrina L. v. Dep’t of State, EEOC Appeal No. 0120152145 (Nov. 16, 2017).

So what should an employer do? One example comes from a case where the employee suggested that the employer move her workstation to the first floor of its building to accommodate post-surgery problems with her ankle. The court granted the employer summary judgment because the employer documented specific reasons why her requested move would create an undue hardship: 1) the filing cabinets her position as an Accounts Receivable Clerk required her to use were on the second floor, 2) the first floor lacked a safe, where she was expected to store customer payments, 3) the first floor lacked the ledger books where she was expected to securely log customer payments, and 4) the first floor had customers and non-administrative employees present, making it an unsecure location for handling financial records. Frumusa v. Zweigle’s, Inc., 688 F. Supp. 2d 176, 191–92 (W.D.N.Y. 2010).

The reasons why a requested accommodation would be an undue hardship may seem or feel obvious, at least to management, at the time the employer denies the accommodation. But courts and the EEOC are often suspicious of reasons that the employer fails to document at the time but relies on later. And courts and the EEOC will strictly scrutinize the stated reason for the hardship.  So if a requested accommodation would in fact meet the threshold for undue hardship, there will be significant, identifiable reasons why this is so, and an employer should document those reasons as specifically as possible as part of the interactive process.

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An EPIC Day for Employers Utilizing Arbitration Agreements

The United States Supreme Court recently issued a decision in Epic Systems Corporation v. Lewis, – S. Ct. –, 2018 WL 2292444 (2018) resolving a circuit split in favor of upholding employers’ ability to enforce arbitration agreements with employees requiring individualized proceedings.

In each of the underlying consolidated cases below, employees sought to litigate Fair Labor Standards Act (“FLSA”) and state law wage and hour claims on a collective action and Rule 23 class action basis, despite being parties to an arbitration agreement with their respective employers mandating arbitration of all claims on an individualized basis. The employees argued to the Court that such arbitration provisions violated the National Labor Relations Act (“NLRA”), and as such, courts need not enforce the arbitration provisions under the savings clause of the Federal Arbitration Act (“FAA”).

The five justice majority, in an opinion authored by Justice Gorsuch, rejected these arguments. First, the majority noted that the FAA’s savings clause only precludes enforcement of arbitration agreements that are invalid “upon such grounds as exist at law or equity for the revocation of any contract.” 9 U.S.C. § 2. Even if the provisions were illegal under the NLRA, the majority found that the savings clause would be inapplicable because this was not the type of generally applicable defense—such as fraud, duress, or unconscionability—that would apply to any contract. Second, the majority held that, contrary to the employees’ position, the NLRA did not invalidate the agreement because it does not speak to class or collective actions, and the more specific statutes (such as the FLSA) do not proscribe individualized arbitrations. Finally, the majority held that the National Labor Relations Board was not due Chevron deference because it was seeking to interpret the FAA, a statute outside its administrative authority, and because the government was taking inconsistent positions through the Board and the Solicitor General.

Impact on Employers

Does this mean that employers are free to implement or continue to use arbitration agreements requiring individualized arbitration for employment issues? While the Epic decision certainly eliminates the previous uncertainty around the use of arbitration to resolve employment disputes filed on a class or collective basis, there are still a number of factors that employers should consider if they are considering implementing or have already implemented an arbitration program in their workplace:

Contract Based Arguments: Justice Gorsuch’s opinion left open the door for arguments that an arbitration agreement need not be enforced under the FAA due to violations of generally applicable contract defenses such as fraud, duress, or unconscionability. While these are not new defenses to enforcement of an arbitration agreement, the Epic opinion highlights the need for employers to carefully consider and draft arbitration provisions to minimize the potential for such arguments.

Costs: Enforcement of arbitration on an individualized basis can still result in multiple, sometimes expensive individual arbitrations. The costs of arbitration vary substantially between employers and employees under different association rules, with employers often bearing a significantly greater portion of the filing and administrative fees. Employers should carefully consider not only the potential costs and fees of arbitration but also whether certain types of employment issues may be more cost effective to litigate or to arbitrate on a class-wide or consolidated basis.

Legislation: Though not directly related to the Epic decision, as employers consider their arbitration agreements, it is important to note that in the wake of the #MeToo movement, several state legislatures have taken steps to limit arbitration for sexual harassment claims and although similar legislation is currently stalled in Congress, that could change after the upcoming midterm elections. Certain federal contractors may also be subject to limits on the use of arbitration to resolve certain workplace claims, including sexual harassment and sexual assault.

Executive Orders: In response to the Epic decision, Governor Inslee of Washington issued Executive Order 18-03 which requires state agencies to give preference in contracting to companies that do not require employees to sign mandatory individual arbitration clauses or class or collective action waivers. It is possible that other states may follow suit.

The Bottom Line 

The Epic decision is definitely a “win” for employers who utilize arbitration agreements and may face wage and hour or other claims that are often brought on a class or collective basis.  As for the “what next”—employers who do not have arbitration agreements should consider post-Epic whether arbitration is an appropriate and cost-effective dispute resolution tool for their workplace, especially if they are vulnerable to class or collective action claims. For employers with arbitration agreements already in place, the Epic decision serves as a reminder (i) to consider inclusion of class waiver language if it is not currently part of their arbitration agreement, and (ii) to review the actual language and scope of their arbitration agreements to minimize other challenges to enforcement that may be pursued post-Epic as well as compliance with other recently-enacted laws.

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A Non-Compete Lawyer’s Case for Conducting Exit Interviews (and Five Must-Ask Questions)

Over the past several months, I conducted an informal, and utterly unscientific, poll about exit interviews. Questionable survey methodology aside, my conversations on this topic confirmed my suspicion: Exit interviews have few fans.

There are many reasons for this, but chief among them seems to be doubt on the part of both employers and departing employees that time devoted to exit interviews is well spent. Will a departing employee really be truthful, especially about difficult or sensitive subjects, on her way out the door? Does an employer actually want feedback, especially about hot-button or intractable issues, from someone who has decided to jump ship or may have an ax to grind?

While these questions deserve close and careful consideration, from the perspective of a lawyer who routinely litigates non-compete and other unfair competition matters, exit interviews are a no-brainer. These interviews are an employer’s best, and often only, chance to get out ahead of unfair competition, to ask a departing employee, while she still has incentive to cooperate, about her future plans, to determine whether she engaged in any suspicious behavior leading up to her last day, and to remind her of continuing contractual obligations.

Employers that don’t conduct exit interviews, or that conduct interviews but don’t include any questions focused on unfair competition, frequently have to play catch-up once an employee is gone, evaluating suspected potential claims based on incomplete internet research, costly computer forensics, rumors in the market, and anything the former employee, who sometimes has lawyered up, will voluntarily divulge now that she is no longer within the employer’s control (usually, very little).

Here are five questions that employers seeking to reap the benefits of conducting exit interviews should ask every departing employee:

  1. What are your future employment plans? A departing employee who is considering violating her post-employment non-compete or non-solicit obligations will almost always find ways to avoid discussing future employment plans. Forcing the issue by asking directly about future plans in an exit interview is a win-win for the employer: If the employee owns up to her plan to violate her obligations, the employer is positioned to take action immediately, potentially obtaining relief before any economic damage has accrued. If the employee instead refuses to disclose or misrepresents her future plans, this, too, may be helpful. Refusal to discuss future plans is a red flag, and the departing employee’s actions after separation should be very closely monitored. Misrepresentation, once it is discovered, can be used to strengthen and add context to legal claims asserted by the employer. An employee who “retired” to spend more time with her grandchildren has materially diminished credibility, especially at a TRO hearing, when it turns out that, instead of retiring, she joined a direct competitor the day after her separation.
  2. Do you have any questions about your post-employment contractual obligations? Departing employees frequently don’t remember, sometimes conveniently, sometimes sincerely, signing non-compete agreements at the outset of employment. An exit interview is the perfect time to provide a copy of any applicable agreement, and to explain to departing employees that the company requires strict compliance with all contractual obligations.
  3. Have you downloaded any information from company computers or information systems in weeks leading up to your departure? Departing employees rarely ask permission to download “personal information” from company computers and information systems in connection with an impending separation. The problem is that such employees frequently have a very broad definition of “personal information” that includes company confidential or proprietary information. The best way to avoid this common “misunderstanding” on the part of departing employee is to address it head on in an exit interview.
  4. Have you returned all company property? Confidentiality and non-compete agreements usually contain provisions requiring an employee to return all company property, including company confidential and proprietary information, to the employer when employment terminates. But experience teaches that departing employees rarely do so. During the exit interview, the employer should question the departing employee, in detail and using specific examples, about company information that may remain in her possession. Has she returned all thumb drives? Did she store company information on her phone or in the cloud? Did she ever forward company e-mails to personal e-mail accounts? If the employee has not returned all company information, arrangements for immediate return should be made. And the employer should document all information, especially USB and external hard drives, returned.
  5. How can we reach you? Many employers neglect to ask departing employees for updated contact information. This can handicap the employer’s ability to make contact after separation to raise concerns about unfair competition. The fix is simple: Remember to ask as part of all exit interviews for current mailing address, personal e-mail address, and phone number.
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Is It Time to Review the Nondisclosure and Confidentiality Provisions in Your Agreements?

Employers typically resolve employment disputes with a release of all claims and a confidentiality clause that obligates the employee to keep the terms of the agreement – and sometimes the underlying allegations – confidential.  Standard severance agreements also routinely contain confidentiality clauses. Until recently, the primary risk associated with such provisions has been the possibility that overbroad clauses could be read to restrict employees from making reports of unlawful practices or disclosing sensitive information to federal agencies, or from participating in government investigations.  Many employers have minimized that risk by expressly clarifying that nothing in the agreement purports to restrict employees from engaging in these whistleblowing-related activities.

But recent laws passed in response to the #MeToo movement have created a new type of risk with respect to confidentiality provisions.  These new laws’ purpose is to discourage agreements that can be read to prohibit the reporting and disclosure of sexual harassment and sexual misconduct.  These laws may well apply to standard settlement or severance agreements containing routine confidentiality provisions and releases that include claims of sexual harassment, sex discrimination, or sexual assault.  And even more laws may be on the way.

A summary of the recent laws in this area is below:

Recent state laws nullifying certain nondisclosure or confidentiality provisions

The states of New York and Washington recently passed laws nullifying settlement agreements that prohibit disclosure of sexually harassing conduct.

The New York law states that employers have no authority to include “in any settlement, agreement or other resolution of any claim, the factual foundation for which involves sexual harassment, any term or condition that would prevent the disclosure of the underlying facts and circumstances to the claim or action unless the condition of confidentiality is the complainant’s preference.”  New York S. 7507-C, Part KK, Subpart D.  The law further states that the employee may have 21 days to consider the employer’s proposal to include a confidentiality/nondisclosure clause, and 7 days to revoke any acceptance.  Id.  It is unclear whether the law includes situations in which no “claim” has been made (e.g., in a severance agreement), or whether it prohibits an employer’s refusal to settle unless the employee “prefers” a nondisclosure clause.

The Washington law prevents employers from requiring employees to agree not to disclose sexual harassment or sexual assault, or to make agreements that have the “purpose or effect” of preventing such disclosure.  See Washington Substitute Senate Bill 5996.  As such, the law appears to include agreements other than settlement agreements.  Notably, the Washington law expressly carves out settlement agreements that contain mere “confidentiality provisions,” and it permits employers to request that participants in sexual harassment investigations maintain confidentiality during the investigation.  Id.

Numerous other states, including California, Massachusetts, New Jersey, and Pennsylvania, are currently considering similar legislation, and it would not be surprising to see even more states, and perhaps the federal government, consider restrictions on nondisclosure or confidentiality provisions in the future.

Federal tax legislation

A little-noticed provision of last year’s tax law, the Tax Cuts and Jobs Act of 2017, also has the effect of discouraging nondisclosure and confidentiality provisions.  That provision prohibits companies from claiming deductions for “settlement[s],” “payment[s],” and related attorneys’ fees that are “related to sexual harassment or sexual abuse if such a settlement or payment is subject to a nondisclosure agreement . . . .”  See Section 162(q) of the Tax Cuts and Jobs Act of 2017.  Unfortunately, the law and its legislative history do not specifically address several important questions about this provision’s scope, including:

  • What does “related to” mean? Does it encompass payments for any release that encompasses sexual harassment or “abuse” claims, even if those claims have not been asserted by the employee and are simply part of a boilerplate, full release of claims?  (One would not think so, but the law does not expressly address this.)  Or must the employee have specifically made claims or allegations of sexual harassment or abuse for the settlement payments or attorneys’ fees to be sufficiently “related to” such claims?  What if the employee has asserted multiple different claims?  How is it to be determined whether and to what extent a settlement, and the attorneys’ fees incurred, relates to sexual harassment or abuse claims versus other types of claims?   Does the nondeductability of attorneys’ fees apply only to employers’ fees, or to employees’ fees as well?
  • What exactly is a “nondisclosure agreement”? Does that include a simple confidentiality provision that merely requires the employee to keep the terms of the agreement confidential?  What about a provision stating that if the employee is asked about the dispute, she will say “the matter is resolved and nothing more may be said?”  Or, instead, is a nondisclosure agreement limited to an agreement in which the employee agrees not to discuss the underlying facts and allegations, as opposed to the terms of the settlement or severance agreement?

The Bottom Line

Nondisclosure and confidentiality provisions – many of which have been included in employers’ template agreements for years – are now under scrutiny.  Employers are well-advised to stay abreast of legal developments and to review their template settlement and severance agreements with an eye toward compliance with these new laws.  Because state and federal laws will continue to differ in their specifics, employers must assure that they understand and are in compliance with the laws in each jurisdiction in which these issues arise.

In addition, there are important unanswered questions that will affect how employers need to structure their settlement and severance agreements and whether they may continue to deduct certain settlement payments and attorneys’ fees for tax purposes.  Those questions will, hopefully, be addressed in future lawmaking and interpretation.

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A First in Texas: Austin Enacts Paid Sick Leave Ordinance

Austin recently became the latest city in the United States, and the first in Texas, to join the paid sick leave trend spreading across the country.  On February 16, 2018, Austin adopted a paid sick leave ordinance that requires private employers of any size operating in Austin (regardless of where the company is based) to provide paid sick leave to their employees working in Austin.  The ordinance will not take effect until October 1, 2018, although it has been challenged in court.  Regardless, employers with employees in Austin should be aware of the basic requirements of the law so they can be in compliance with the ordinance by October 1 if the court challenge fails.  Employers with less than 5 employees have until October 1, 2020 to comply.

The ordinance applies to employees who perform at least 80 hours of work in the city of Austin in a calendar year.  Therefore, this may extend to part-time employees and employees who only spend a portion of their time working in Austin.

The ordinance requires that an employer grant an employee one hour of earned sick time for every 30 hours worked in the city of Austin up to an annual cap.  The annual cap depends on the size of the employer.  Note that employers who already provide leave are not required to provide additional leave so long as their policies provide at least the same benefits and protections as the new ordinance.

Employees can use accrued sick leave for an employee’s own care or that of the employee’s family member.  Employees can also take time off to seek medical attention, seek relocation, obtain victim services, or participate in legal proceedings related to domestic abuse, sexual assault, or stalking involving the employee or a family member.

Under the ordinance, employers are required to provide to each employee a monthly statement showing the amount of the employee’s earned sick time and must also keep records to show the amount of sick time accrued and used by each employee.  Moreover, employers that provide employee handbooks must include a notice to employees about their rights and remedies under the ordinance.  Additionally, when the City of Austin provides signage on its website, employers must display it in English and Spanish in an obvious place where notices to employees are customarily posted.

Looking Ahead

Prior to October 1, 2018, and assuming that the ordinance is not invalidated in court, all employers with employees working in Austin should check their employee handbooks and policies to make sure that they have a paid time off or sick leave policy and that it complies with the ordinance.  Under the ordinance, if an employer’s current paid time off benefits meet or exceed the requirements of the new ordinance, changes may not be necessary.  However, it will still be necessary for employers to meet the notice requirements and make sure there is a plan in place to account for accrual of the leave.

Employers in other cities besides Austin should still stay informed on this issue as sick leave laws are becoming more widespread across the country and the Austin ordinance is similar to the laws that have been adopted in other jurisdictions.  Currently, over 40 jurisdictions in the United States have passed such laws, and federal contractors are also required to provide paid sick leave pursuant to a federal executive order.  Multi-state employers and employers with employees in different cities must review and determine whether their existing policies comply with the variety of paid leave laws across the country.  Such a review should include making sure that the company is complying with the notice, poster, and record-keeping requirements of each law, as well as ensuring that the company is properly accounting for accrual of the leave.

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Emotional Support Animals In The Workplace: Do Employers Really Have To Accommodate?

We’ve all read the recent news headlines about the emotional support peacock that was not allowed to board a United Airlines flight and the 300-pound emotional support pig that was rejected by US Airways.  These stories are becoming more and more common and have led a number of employers to ask what their responsibilities are when an employee asks to bring an emotional support animal to work as a reasonable accommodation under the Americans with Disabilities Act (“ADA”).

To answer this question, it is important to understand what the ADA actually says and does not say about the subject.  What is does say is this:  Title III of the ADA – the public accommodations provision – requires most public businesses and venues to modify their “no pets” policies and to accommodate “service animals.”  Title III expressly defines a “service animal” as any dog (and, in some cases, a miniature horse) that is individually trained to do work or perform tasks for the benefit of a disabled individual.  Examples of such tasks include guiding a blind person or reminding a person to take medication.  Notably, dogs whose sole function is to provide comfort or emotional support do not qualify as service animals under Title IIII.

In comparison to Title III, Title I of the ADA, which prohibits private employers from discriminating against qualified persons with a disability and requires them to make reasonable accommodations, is silent on the issue of emotional support animals (as well as service animals).  In the absence of any affirmative requirement in Title I, the initial instinct of many employers is to reject a request to bring an emotional support animal to work out of hand, citing either a “no pets” policy or a long list of concerns about having an animal in the workplace.  Often-raised issues include:  What do we do if a co-worker or customer has a fear of the animal?  How do we address health and safety concerns (e.g., co-worker allergies, unwanted pests, waste disposal, vaccinations, animal bites)?  What happens if the animal is a distraction to others?  Can I be sued if the animal bites an employee or customer?

Notwithstanding this long list of questions, which are both real and complex, it is the position of the EEOC and the one or two courts that have considered the question that a request by a disabled employee to bring an emotional support animal to work should not be rejected out of hand; rather, employers should follow the generally applicable standards regarding reasonable accommodation in the workplace and undue hardship – that is, to engage in the interactive process to determine whether allowing the emotional support animal is a reasonable accommodation that is required to assist a disabled employee or applicant in performing an essential job function and, if so, whether the accommodation will impose an undue hardship.  In fact, the EEOC recently filed suit on this very issue, suing a trucking company for refusing to hire and failing to accommodate a truck driver (also a veteran) following his request to allow his emotional support dog to accompany him on his truck route as an accommodation for the driver’s PTSD and mood disorder.  The case is EEOC v. CRST Int’l, Inc. and it remains pending.

So, the bottom line for employers is to take these requests seriously and do not prejudge the request based on preconceived ideas about its legitimacy or complexity.  Employers should follow their usual accommodation process, including requesting appropriate documentation from the necessary parties (the employee, the employee’s health care provider, and/or the animal trainer) to understand how the animal will assist the disabled person at work and what impact the animal may pose on operations as well as co-workers and customers.  Employers should also consult state law for requirements or obligations that are in addition to those under the ADA.

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What’s Expected of You When Your Employee is Expecting

The EEOC has ramped up enforcement against pregnancy discrimination, filing four lawsuits in March 2018 alone. These types of lawsuits can result in expensive consent decrees that also obligate the employer to policy changes and EEOC monitoring.

Making sure that policies and practices mirror what the EEOC and courts expect of employers when it comes to their pregnant employees can prevent EEOC charges and lawsuits (and can help to fight charges and lawsuits that do get filed). So it makes sense to distill some lessons from the mistakes that the EEOC alleges other employers have recently made when it comes to pregnant employees:

Lesson 1: Give pregnant employees the same accommodations you would give similarly restricted non-pregnant employees. If you would give an accommodation to an employee who was disabled or who had an on-the-job injury to help that employee do his or her work, then you should give the same accommodation to a pregnant employee whose pregnancy creates a similar obstacle. This trips up many employers, because it can be counterintuitive: if our policy provides an accommodation but only for those who are injured on the job (not those injured at home), then why would a pregnant employee qualify for that same accommodation? But the EEOC sued a residential nursing care provider on this very basis in E.E.O.C. v. Century Care of Lauringburg, Inc., No. 1:18-cv-170 (M.D.N.C.), presumably relying on the Supreme Court’s decision in Young v. United Parcel Serv., Inc., 135 S. Ct. 1338 (2015), which held that an employee can demonstrate  prima facie case of pregnancy discrimination in part by showing that the employer accommodated non-pregnant employees who were similar to the pregnant employee in their ability or inability to work. And the EEOC recently entered into a consent decree over this same issue; the employer agreed to pay $80,000 and to obligate itself to significant policy and monitoring obligations. The consent decree is Document 18 in E.E.O.C. v. Silverado Menomonee Falls LLC, No. 17-cv-1147 (E.D. Wis.).

Lesson 2: Refrain from requiring an employee to take unpaid leave for her pregnancy when you would not require that of a non-pregnant employee with similar medical restrictions. Some employers put employees on unpaid leave out of a good-intentioned concern for the health of the pregnant woman (and the pregnancy), especially when a job has physical aspects like lifting heavy things. But the EEOC sued an employer alleging it had forced an employee to take unwanted unpaid leave in the Century Care case mentioned above and in E.E.O.C. v. Simplicity Ground Services, LLC, No. 2:18-cv-10989 (E.D. Mich.).

Lesson 3: If an employee does take leave, consider any restrictions she has when she returns (and potential accommodations for those restrictions) before terminating her employment. An employer should think carefully about how a pregnant employee could do her job after taking pregnancy-related leave. This can happen when the employee has pregnancy-related complications that require leave (and the employee returns while still pregnant) or when the employee returns after giving birth with restrictions related to the pregnancy or childbirth. The EEOC sued a restaurant for reducing an employee’s hours after she returned from medical leave for her pregnancy complications and for later terminating her employment after her pregnancy leave ended without considering potential accommodations in E.E.O.C. v. Maurizio’s Trattoria Italiana, LLC, No. 18-cv-338 (S.D. Cal.). Recently, the EEOC entered into a consent decree based on this same issue, costing the employer $24,000 and placing significant obligations on it. The consent decree is Document 32 in E.E.O.C. v. Off the Air II, Inc., 3:16-cv-3328 (N.D. Tex.).

Lesson 4: Do not tell an employee that she must choose between her job and her pregnancy—and if the employee reports that a supervisor or coworker does so, investigate and resolve that report. Employers cannot control what every supervisor or coworker says to a pregnant employee about her pregnancy. But if the employee reports what she believes to be inappropriate comments or acts, the employer should follow its policies to investigate that report and to take action to remedy and prevent any discrimination, harassment, or retaliation. The EEOC recently alleged that a supervisor told an employee that she needed to choose between her pregnancy and her job, required her to lift heavy objects after approving lifting restrictions, refused to allow her to take breaks, and scheduled work during previously approved doctor’s appointments in E.E.O.C. v. Dollar Tree Stores, Inc., No. 1:18-cv-49 (S.D. Ga.). The EEOC also alleged that the employee had reported the acts to the supervisor’s manager, but that the manager failed to investigate or resolve the report. It’s crucial to have a policy that prohibits discrimination, harassment, and retaliation based on pregnancy (and any other legally protected characteristic), but it’s equally crucial to have a process for reporting policy violations—and regular training on that policy.

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Poorly Drafted or Outdated Job Descriptions May Make ADA Claims More Difficult to Defend

An effective written job description clearly, accurately, and completely identifies and describes an employee’s duties, functions, and responsibilities. When employers create job descriptions that are inaccurate or when they allow descriptions that were accurate at the time of drafting to become outdated, they create legal risk.

This is because an employer’s obligation to provide reasonable accommodations under the Americans with Disabilities Act (“ADA”) is tethered to the “essential functions” of the job. Courts interpreting and applying the EEOC’s ADA regulations have found that the employer’s written job description is compelling evidence of the essential functions for a given position. As a result, when written job descriptions do not reflect reality, employers may get into trouble.

Poorly drafted job descriptions can do more harm than good.

At first blush, creating a job description seems like a straightforward task. But descriptions often are organized around imprecise and sometimes confusingly overlapping headings such as “Qualifications,” “Position Objectives,” “Job Duties,” “Job Requirements” and “Special Demands.” Correlating the attributes of a given job with the headings in the employer’s job description form can be a daunting task. And getting it wrong can have real, negative consequences.

For example, in a recent case, the Eleventh Circuit Court of Appeals affirmed the district court’s denial of judgment as a matter of law to an employer after a jury awarded a university police officer damages on a failure to accommodate ADA claim. When the plaintiff officer was hired, officers worked eight-hour shifts, but when a new police chief was appointed, the requirement increased to 12-hour shifts, which caused the plaintiff to experience high blood pressure. When the department refused to allow him to return to an eight-hour shift, the plaintiff retired and sued under the ADA.

Part of the appellate court’s reasoning for affirming the denial of judgment as a matter of law is that the employer’s “Position Description” contained a list of “Essential Functions,” which did not contain any shift length requirement. The only reference in the description to shift length was a separate section titled “WORKING HOURS” that did state the 12-hour shift requirement and noted that “[d]epending upon the needs of the departments, shifts may be changed.” The Eleventh Circuit found that a reasonable jury could have looked at the headings in the job description and concluded that the 12-hour shift was not an essential function of the position. See Snead v. Florida Agric. & Mech. Univ. Bd. of Trs., No. 17-10338, 2018 WL 992302 (11th Cir. Feb. 21, 2018).

Allowing job descriptions to become stale creates legal risk.

Over time, due to organizational evolution, the advancement of technology, and employee turnover, job descriptions become stale. It may seem that an outdated job description is harmless so long as the employee filling the job is meeting performance expectations. But a recent case illustrates that stale job descriptions may give rise to significant legal risk.

In this example, the Sixth Circuit affirmed the district court’s denial of an employer’s motion for judgment as a matter of law after a jury awarded an in-house attorney damages for the employer’s denial of her request to work from home as an ADA accommodation for pregnancy-related complications. The employer argued that her request was per se unreasonable because it precluded her from performing several essential functions identified in the job description, such as being physically present on the job, deposing witnesses, and appearing in court.

The Sixth Circuit held, however, that the jury had sufficient evidence to reasonably find in the plaintiff’s favor. One reason for the court’s holding was that the employer’s job description “was based on a 20-year-old questionnaire that did not reflect changes in the job that have resulted from technological advancements since that time”—a fact that was highlighted by the plaintiff’s uncontested testimony that she had never performed two of the “essential functions” in her eight years working for the employer and because she had much more recently completed a questionnaire regarding her actual job duties that the employer apparently failed to incorporate into its job descriptions. See Mosby-Meachem v. Memphis Light, Gas & Water Div., 883 F.3d 595 (6th Cir. 2018).

The Bottom Line

Job descriptions should always be accurate. Further, an employer may limit potential liability arising from job descriptions by conducting regularly scheduled audits to ensure that descriptions match the current needs and functions of each position. Particular focus should be given to those functions that are essential to the position, since those are most likely to be used by a court in evaluating an ADA claim.

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