Is Your Parental Leave Policy Discriminating Against New Dads?

Employees may be eligible for different types of leave following the birth of a child or placement of a child for adoption or foster care.  There is leave under the Family and Medical Leave Act (FMLA) which provides eligible mothers and fathers with 12 weeks of unpaid leave.  Many employers also offer short term disability leave to new biological mothers to recover from childbirth.  In addition to FMLA and short-term disability, many employers also provide some form of paid parental leave to new mothers and fathers although such leave is not required by federal or most state law.  Employers who offer paid parental leave are required by law to make such leave available equally to new mothers and fathers.  In keeping with this principle, many employers have adopted parental leave policies that provide benefits based on an employee’s status as a primary or secondary caregiver.  While these policies are not discriminatory on their face (so long as they provide new mothers and new fathers the same benefits on the same terms), there is growing concern that some of these policies are discriminatory in practice and both the EEOC and the courts are taking a second look.

Recent Scrutiny

On August 30, 2017, the EEOC filed a lawsuit against cosmetics company, Estée Lauder, alleging that, as applied, the company’s paid parental leave policy unlawfully favors new moms and discriminates against new fathers in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”).  EEOC v. Estée Lauder Companies, Inc., No. 2:17-cv-03897 (E.D. PA).  The policy in question provides paid parental leave benefits based on “primary” versus “secondary” caregiver status, without regard to gender.  Specifically, the policy gives primary caregivers 6 weeks of paid leave (and other flexible leave benefits) while secondary caregivers are given only 2 weeks of paid leave.  According to the lawsuit, when a male employee tried to apply for “primary caregiver” status under the policy after the birth of a child, he was told that new mothers are automatically deemed the “primary caregiver” and that the “primary caregiver” designation only applied to new fathers in “surrogacy situations.”  The EEOC alleges in the lawsuit that Estée Lauder’s policy, as applied, allows a new mother to obtain greater paid leave benefits than new fathers because it prohibits new fathers from applying for primary caregiver status outside of limited exceptions.

J.P. Morgan Chase has a similar paid parental leave policy based on caregiver status and it too is currently subject to challenge.  The American Civil Liberties Union (ACLU) recently filed a class action charge of discrimination with the EEOC claiming that male employees have been discriminated against on the basis of sex by the parental leave policy.  Under the policy, J.P. Morgan Chase provides 16 weeks of paid leave to a “primary caregiver” and 2 weeks of paid leave to a “non-primary caregiver.” The charge alleges that the policy designates female parents as default primary caregivers, making them eligible for a longer amount of paid parental leave than non-primary caregivers.  Specifically, the charging party alleges that when he asked J.P. Morgan Chase to classify him as the primary caregiver, he was told that the bank considers the birth mother the primary caregiver, and the father can only get the extended leave if his spouse returns to work early or is medically incapable of caring for the child.  The ACLU claims the policy is therefore discriminatory on the basis of gender.

While the two cases are still in the early stages, their outcome will provide an important litmus test for other employers.

The Bottom Line

If your company currently provides parental leave benefits based on a primary versus secondary caregiver distinction, now is the time to review your company’s rationale for these distinctions and to ensure mothers and fathers are being treated equally under the policy.  In particular, employers should make sure that there are no assumptions or stereotypes inadvertently “built in” to their policies that assume the mother is always the primary caregiver, while requiring new fathers to take additional steps to prove primary caregiver status. Employers should also be prepared to address how such designations apply if both parents (whether male/female or same sex) claim to be co-primary caregivers.  As discussed above, while these designations appear gender-neutral on their face, there is the potential for them to be applied in a discriminatory manner and so careful review of these policies is important to ensure that they are drafted and implemented on a gender-neutral basis.

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Ten Easily Overlooked Harassment Issues from the EEOC’s Proposed Guidance

With harassment increasingly in the news, employers need accurate, current advice on where the courts and the EEOC stand. The EEOC’s proposed enforcement guidance on unlawful harassment gives employers a comprehensive overview of the EEOC’s position. The final version of the guidance is expected to be released soon.  (The proposed guidance is available at https://www.regulations.gov/contentStreamer?documentId=EEOC-2016-0009-0001&contentType=pdf.)

The proposed guidance notes several issues that employers sometimes overlook because those issues deal with situations outside the typical harassment scenario. Because the EEOC has taken the time to identify these issues, it considers them priorities and employers should be especially vigilant about them.

For that reason, no matter what changes happen to the guidance between its proposed and final versions, the following ten easily overlook harassment issues are important to keep in mind:

  1. Racial harassment includes harassment based on race-linked traits, such as facial features or hair.
  2. National-origin harassment includes harassment based on attire, diet, foreign accent, and limited English proficiency.
  3. Religious harassment includes harassment based on atheism, lack of religious belief, religious attire, and requests for religious accommodation (and using those accommodations).
  4. Sexual harassment includes not only harassment based on sexual interest (“come ons”) but also harassment devoid of sexual interest, such as gender-based epithets or sexist comments (“put downs”), as well as sex stereotyping based on assumptions about how different genders work well or their family responsibilities; it also includes harassment based on pregnancy or lactation needs, as well as harassment based on sexual identity and sexual orientation.
  5. Age-based harassment includes harassment based on relative older age, but does not include harassment based on relative younger age (“people in their forties work harder than those in their fifties” is harassment, but “people in their fifties work harder than those in their forties” is not).
  6. Disability-based harassment includes harassment based on requests for reasonable accommodations (and using those accommodations).
  7. Genetics-based harassment includes harassment of an employee based on the genetics or medical history of an employee’s family member.
  8. Incorrect perceptions that an employee has a protected characteristic can still lead to unlawful harassment. Harassing a straight employee based on a misperception that he is gay, or a Latino employee based on a misperception that he is Arabic, can be unlawful harassment.
  9. That a harasser belongs to the same protected class will not insulate the employer from liability.
  10. Harassment based on the intersection of two protected characteristics is unlawful harassment. So if a harasser targets only Black females (but not Black males, and not other females), that is still unlawful harassment.
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Did You Keep Your New Year’s Resolution? New Regulations and Laws in 2018

With the beginning of each calendar year often comes a host of new laws and regulations.  And 2018 is no different.  Highlighted below are a couple of new laws/regulations in the areas of drug testing, paid sick and safe leave, minimum wage, and medical marijuana that may affect your workplace and require revisions to your employee handbook:

DOT Drug Testing:

The DOT Agencies & United States Coast Guard (“USCG”) recently issued guidance to DOT-regulated employers concerning the content of their DOT policies and what they need to contain about the changes to 49 CFR Part 40, which are effective January 1, 2018.  The following is from the recently published notice:

“There is no need for employers to make any changes if their current DOT policies refer to adhering to “… Part 40.”  However, there are exceptions when an employer’s DOT policy lists the following optional information:

  • If sub-categories of drugs tested under the 5-panel are listed – for example, if a policy lists “Opiates (codeine, heroin, & morphine)” and/or “Amphetamines (amphetamine, methamphetamine, MDMA, MDA, MDEA), then “Opiates“ needs to change to “Opioids (codeine, heroin, morphine, oxycodone, oxymorphone, hydrocodone, hydromorphone)” and “MDEA” will need to be removed from the list under Amphetamines.  If however, employers would like to delete the sub-categories of drugs, doing so will also be acceptable.
  • Likewise, if cut-off levels are listed in current policies, employers must update those cut-off levels. Again, employers may simply delete the cut-off levels completely and be in compliance if the DOT policy refers to adhering to “… Part 40.”
  • While these DOT Agencies and USCG suggest that employers provide written notice to employees about their updated DOT policies, doing so is an employer’s prerogative.”

Employers should review their current DOT policies for compliance with the new regulations at the earliest opportunity.

Paid Sick and Safe Leave (Private Employers):

The States of Washington and Maryland recently passed paid sick and safe leave laws applicable to private employers.  The Washington state law is effective January 1, 2018 and the Maryland law is effective February 11, 2018.  Rhode Island also recently passed a paid sick and safe leave law which will become effective July 1, 2018.  These states join Arizona, California, Connecticut, Massachusetts, Oregon, Vermont, and Washington D.C., in addition to a host of cities and counties across the country with paid sick and safe leave requirements.  Employers in these jurisdictions should carefully review their existing sick leave and paid time off policies for compliance.

Minimum Wage:

Eighteen states raised their minimum wage in 2018:  Alaska, Washington, Montana, Minnesota, South Dakota, Colorado, California, Arizona, Hawaii, Ohio, Florida, New Jersey, New York, Vermont, Maine, and Rhode Island.

Marijuana (Medical and Recreational Usage):

Thirty states and the District of Columbia currently have laws legalizing some variation of recreational or medical marijuana use.  This tally includes Texas which recently passed the Texas Compassionate Use Act, effective September 1, 2017, and authorizes medical marijuana in very limited medical situations.  Eight states (Washington, Oregon, Nevada, California, Colorado, Alaska, Maine and Massachusetts) and the District of Columbia have legalized marijuana for recreational use.  Employers should become familiar with the marijuana usage laws in the states in which they operate and keep up with ongoing developments as these laws make their way through the court systems.  In particular, employers should pay careful attention to whether they are required to reasonably accommodate an employee’s marijuana usage under the Americans with Disabilities Act or similar state laws. At least one state Supreme Court – Massachusetts – has addressed the issue and found that Massachusetts employers may have a duty to reasonably accommodate under state law.

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Take Care When Using Employee Fingerprint or Other Biometric Data – If Done Wrong, It Could Get You Sued

Employers are increasingly tracking employee work and movements using biometric data such as fingerprints, voiceprints, retinal scans, and facial images.  As revealed by the media attention to lawsuits against Facebook, Shutterfly, and other companies regarding their use of facial recognition technology, the public—and lawmakers—are becoming ever-more aware of the risks involved, including the possibility of identity theft.

Many employers are unaware of the laws regulating their collection and use of such data.  Those laws are increasingly being used as the basis for class-action lawsuits filed against companies that do not comply with the laws’ strict requirements regarding employee notice, employee consent, and data destruction.  In one recent example, United Airlines was sued in a class-action suit alleging that it violated Illinois’ recent biometric data law by maintaining a fingerprint timekeeping system for employees without properly giving notice and obtaining consent.

Texas and Illinois are currently leading the way in regulating employers’ use of biometric data.  (It is no coincidence that these are reported to be the two states in which Google has blocked use of its “Arts & Culture” app, which uses facial recognition software to compare users’ images to historical artwork.)  Texas’ biometric data law governs the collection, use, and retention of biometric information obtained for a “commercial purpose,” Tex. Bus. & Comm. Code § 503.001 et seq., and some commenters have interpreted this term as applying to biometric data collected by employers.  The Texas law does not have a private right of action, but the Attorney General may investigate and impose a penalty of $25,000 for each violation.

Illinois’ biometric data law, called the Illinois Biometric Privacy Act, has already resulted in dozens of lawsuits against companies with workers in Illinois, including large employers such as United Airlines and Hyatt.  Its penalty of up to $5,000 per “willful” violation of the statute, plus plaintiffs’ attorneys’ fees, can quickly add up when the practice extends to many employees.  Of particular concern to employers is that it is currently unclear whether a complaining Illinois employee has to show that her data was actually misused in some way; violation of the strict statutory requirements may be enough.

In addition to running afoul of state biometric data statutes, failure to safeguard biometric data could result in claims of common-law negligence or violation of state data breach notification laws.  This possibility exists as to biometric data kept in almost every jurisdiction.

The bottom line

Biometric data systems can be valuable tools for employers.  But they also carry risks because of the potential for identity theft.  Prudent employers should review their systems to determine whether employees’ biometric data is being used or preserved.  If so, employers should understand the patchwork of potentially applicable laws, and develop procedures that provide required notice to employees, arrange for employee consent, safeguard biometric data, and provide for the destruction of biometric data in compliance with the specifics of the applicable laws.  Employers should also be prepared to carefully consider any employee requests to be exempted from the collection of biometric data, as such requests could conceivably implicate religious or disability accommodation issues.

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Transgender Rights Under the Trump Administration

Attorney General Jeff Sessions recently advised United States Attorneys across the country that the Department of Justice (DOJ) is reversing its prior position that Title VII of the Civil Rights Act of 1964 – which prohibits gender discrimination in the workplace, among other things – protects transgender workers from discrimination.  This is a significant change from the position of the Obama Administration and the Equal Employment Opportunity Commission (EEOC), both of which interpreted Title VII to prohibit such discrimination.  According to a current DOJ spokesperson, Session’s memorandum was issued in order to align the DOJ with the law as written by Congress.

In his memorandum, Attorney General Sessions wrote that “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status.”  He also instructed that “the Department of Justice must interpret Title VII as written by Congress.”  He further directed that, while other statutes do so, Title VII does not expressly prohibit gender identity discrimination, and Congress has chosen not to amend the language.  Thus, according to Attorney General Sessions, Congress did not ever and does not now intend for gender identity discrimination to be prohibited by Title VII.  Attorney General Sessions directed the DOJ to take this position going forward, except in cases where lower-court controlling precedent dictates otherwise, in which case the issue is to be preserved for potential review.

The memorandum issued by Sessions is not all that surprising given the actions taken by the Trump administration earlier this year.  In February 2017, the Departments of Justice and Education jointly issued a memorandum undoing Obama-era guidance requiring all public schools to allow transgender students to use the bathroom corresponding to their gender identity, pursuant to Title IX.  In July 2017, President Trump tweeted that the U.S. military would no longer accept or allow transgender individuals to serve “in any capacity.”  And during that same month, the Justice Department filed an amicus brief with the Second Circuit in Zarda v. Altitude Express, encouraging the Second Circuit to ignore the position of the EEOC asserting that Title VII does not include protection against discrimination based on sexual orientation.

What does this mean for employers?

To be sure, the DOJ is not charged with enforcing Title VII as to private employers and Sessions’ memorandum does not change the law or overrule any court decision on this issue.  However, the DOJ does prosecute workplace discrimination claims by public employees. It also has the ability to participate in private employer litigation through the submission of amicus (friend of the court) briefs on significant issues.  Thus, the DOJ’s activities have the potential to move the courts toward an interpretation of Title VII that excludes transgender status and gender identity from its protections.  This creates a potential philosophical and advocacy conflict between the DOJ and the EEOC, which holds the opposite view.  Given these disparate views within the same federal government, employers should closely follow developments in this area.

Going forward, employers should proceed with caution in relying upon Attorney General Sessions’ memorandum in determining the scope of their anti-discrimination policies.  There is no risk in having policies that assume gender identity or even sexual orientation discrimination is covered under Title VII, but there is legal risk in assuming they are not covered.

Note also that the DOJ’s current position should have no effect on employers in states (or cities) that have their own prohibitions against employment discrimination based on transgender status or gender identity; those laws must still be followed.  In addition, covered federal (sub)contractors are still prohibited by executive order from discriminating against persons on the basis of their sexual orientation or gender identity.  Those executive orders remain in effect notwithstanding the DOJ’s contrary interpretation of Title VII.

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Addressing Co-Employment Risks When Drafting Agreements with Staffing Agencies

Companies use staffing agencies for a variety of important purposes, such as to temporarily replace an employee on leave, obtain specialized expertise for a project, or to outsource a function that the company does not ordinarily perform.  However, recent lawsuits, agency guidance, and agency investigations have highlighted the co-employment risks that exist when an employer uses workers provided by staffing agencies.

Often, plaintiffs’ counsel, workers, and agencies allege that there is a joint employer relationship between the staffing agency and the company based on the multi-factor tests that are used to determine whether workers are true independent contractors or employees, and some courts are in agreement. For example, one court has recently stated that “[a] business that utilizes staffing agencies may be deemed a joint employer of the staffing agency’s employees.” Jackson v. Fed. Nat’l Mortgage Ass’n, 181 F. Supp. 3d 1044, 1054 (N.D. Ga. 2016) (finding joint employment relationship and conditionally certifying FLSA collective action by staffing agency workers); accord Watson v. Advanced Dist. Servs., LLC, 298 F.R.D 558, 560-66 (M.D. Tenn. 2014).  While employers cannot eliminate potential misclassification risks solely through their services agreements, they can take certain steps to minimize that risk and limit exposure.

Some basic steps include:

  • Ensure the agreement requires the staffing agency to comply with all federal, state, and local laws, specifically including labor and employment laws and the FLSA, and that it specifies that it is the agency’s obligation (not the company’s) to comply with these laws with respect to its workers;
  • Although not legally conclusive, ensure the agreement establishes that the staffing agency and its workers are independent contractors and not employees of the company, and that the agency is solely in control of its workers;
  • Ensure that there are indemnification and defense provisions that cover claims arising under the FLSA and other labor and employment laws;
  • Be mindful of the timing required in the agreement to tender a request for defense or indemnification so that in the event of a potential lawsuit, your company’s rights are not inadvertently waived; and
  • Ensure your company’s practices in reality accord with what is stated in the contract, particularly vis-à-vis the level of control your employees are exerting over the staffing agency’s employees.  And to the extent you have employees performing similar work as the staffing agency’s employees, ensure there are other meaningful distinctions beyond the level of oversight, such as requiring different duties or skill levels for employees than the staffing agency workers.  Cf. Parrish v. Premier Directional Drilling, L.P., No. 5:16–CV–417–DAE, 2017 WL 5900101, at *3-10 (W.D. Tex. Nov. 27, 2017) (denying summary judgment to oilfield services company, and granting summary judgment to plaintiff drilling consultants, in FLSA independent contractor misclassification case where plaintiffs “were treated the same, and supervised in the same manner, with no appreciable differences other than how they were compensated,” as the service company’s own drilling consultant employees).

Consult legal counsel when drafting these types of provisions.  These and potentially other steps to discuss with counsel should help your company be in the strongest possible position should the staffing agency’s workers, or a federal or state agency, bring claims under the FLSA or other employment laws.

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New Year, New Board: Significant Changes at the NLRB

If you feel overwhelmed by a seemingly never-ending stream of news about what the National Labor Relations Board is doing, you are not alone. It’s tough to keep up. The issue is this: Though the NLRB in many ways looks and acts like a court, it is a federal agency (i.e., part of the executive branch). Its leadership is appointed by the president, and changes in presidential administrations often usher in changes, sometimes confusing changes, in Board precedent.

Under President Obama, the NLRB was harshly criticized by Republicans and employers as acting radically to stretch labor protections beyond the bounds of the National Labor Relations Act, particularly with respect to decisions impacting terms and conditions of employment in non-union workplaces.

But now, change is (once again) afoot at the NLRB.

In Fall 2017, the Senate confirmed two Republicans to the Board, giving the GOP control of the body for the first time in nearly a decade. Then, in November, the Senate confirmed management-side lawyer Peter Robb as the NLRB’s General Counsel, a position that comes with broad policy- and agenda-setting control and day-to-day administrative authority for the agency.

Within days of his confirmation, Robb issued a General Counsel memo, GC Memo 18-02, giving employers reason to hope that many Obama-era Board decisions will be undone:

  • GC Memo 18-02 rescinds seven advice memos issued by Robb’s predecessor, including a controversial memo advising that many employer handbook policies on dignity and respect violate the NLRA.
  • GC Memo 18-02 directs that all cases involving “significant legal issues” should be submitted to the GC’s office and defines “significant legal issues” to include cases “over the last eight years that overruled precedent and involved one or more dissents” (i.e., most of the Obama-era Board’s controversial, pro-employee decisions).

It is no stretch to read the new GC Memo as an unequivocal indication that Robb intends to upend Obama-era Board law, and all signs are that he will face little resistance from the newly GOP-controlled Board. Just days after Robb issued his Memo, the Board dismantled several key Obama-era rulings, including:

  • In The Boeing Company, the NLRB overturned precedent and created a new test for evaluating the lawfulness of employer policies. Under the new test, employers should expect significantly more deference to legitimate justifications for workplace rules and policies. (In this case, the Board found that Boeing established a legitimate business interest in maintaining a “no camera rule.”)
  • In Hy-Brand Industrial Contractors, the Board jettisoned the controversial, Obama-era Browning-Ferris joint-employer test and reinstated the more rigorous direct-control standard for determining joint-employer status.

The developments of late last year foreshadow what 2018 almost certainly holds in store. Other Obama-era Board decisions on Robb’s chopping block likely include those making it more difficult for employers to keep internal investigations confidential and finding that employees may use work e-mail accounts for NLRA-protected purposes. And it is possible that the Board will revisit (and reverse) its decision on the unlawfulness of class-action waivers in arbitration agreements before the U.S. Supreme Court decides the issue.

The bottom line for employers is this: President Trump’s appointees are shaking up the NLRB, and it may be possible for both union and non-union employers to roll back changes implemented over the past eight years to comply with Obama-era Board decisions. Employers interested in such roll-backs—such as reversing changes that were made to handbook policies, to procedures for conducting internal investigations, and to employee confidentiality and arbitration agreements—should closely monitor new developments from the Trump NLRB.

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Calling an Employee on FMLA Leave with a Work Question: Proceed with Caution!

Oftentimes, employees take FMLA leave with little or no notice. This can leave managers and co-workers in a quandary if they need to find a particular document, or check the status of a pending project, or have a pressing issue to discuss. In these situations, the question arises whether the manager or co-worker can (or should) call an employee who is on FMLA leave to answer a work question.

A growing number of courts have recently considered this issue in the context of an FMLA interference claim brought by an employee whose manager or co-worker calls him or her about work while on FMLA leave. The generally recurring theme in these cases is that contact with an employee out on FMLA leave about work-related issues is the equivalent of an instruction to work, which an employee may feel he/she cannot refuse. Such an instruction, the employees argue, interferes with their right to be away from work on job-protected, FMLA leave and/or acts as a disincentive to take or to use FMLA leave. Put another way, the employees argue, the employer has failed to “respect” the employee’s FMLA “entitlement.” Bell v. Dallas County, 432 Fed. App’x 330, 334 (5th Cir. 2011).

Unfortunately, the FMLA and the accompanying regulations do not specifically address when and under what circumstances an employer may contact an employee while on FMLA leave, other than to say that an employer may require an employee to report periodically on his/her status and intent to return to work. The courts, however, have fashioned some general guidelines. The general consensus among the courts, including several Texas courts, is that “reasonable contact limited to inquiries about the location of files or passing along institutional  or status knowledge will not interfere with an employee’s FMLA rights; however, asking or requiring an employee to perform work while on leave can constitute interference.” Smith-Schrenk v. Genon Energy Services, LLC, 2015 WL 150727 (S.D. Tex. Jan. 12, 2015); see also Austin-Shipp v. Taco Bell of America, LLC, 2017 WL 1425605 (E.D. Tex. Mar. 21, 2017). So an occasional phone call inquiring about files, or asking for a password, or even asking a brief question about a pending assignment should not give rise to an interference claim.

On the other hand, asking or requiring an employee to work while on leave or to complete an assignment he/she should have completed before leave began can cross the line into actionable interference. For example, asking an employee on FMLA leave to update files, or to attend a telephonic strategy meeting, or to make sales calls from home have been found to be problematic. So have visits to the employee’s home to discuss work issues. The only exception is where an employee has voluntarily agreed to perform such tasks while on leave. However, the employee’s agreement to do so must be truly voluntary, which may not always be clear. See 29 C.F.R. § 825.220(d) (“an employee’s voluntary and uncoerced acceptance (not as a condition of employment) of a light duty assignment while recovering from a serious health condition” does not violate the FMLA).

The bottom line is that employers who need to contact an employee while on FMLA leave should approach the situation with caution. For anything other than occasional (and brief) de minimis contact with an employee on ministerial matters, employers should refrain from contacting employees on FMLA leave about substantive work issues. In time-sensitive situations, employers may seek the employee’s voluntary consent to perform tasks from home while on leave, but this should be reserved for the truly exceptional case. And, don’t forget, if an employee on FMLA leave is voluntarily performing work-related tasks at the employer’s request, it is very likely to be compensable time and should not be counted against the employee’s FMLA leave entitlement.

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Understanding the new Defend Trade Secrets Act

On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act of 2016 (“DTSA”). The DTSA is designed to take effect immediately. The text of the DTSA is available here.

What is the DTSA?

The DTSA is a new federal law designed to curtail unfair competition by creating a civil cause of action for misappropriation of trade secrets. Legal commentators have described the law as the most significant expansion of federal intellectual property law in over fifty years. The statute’s core provision provides that: “An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to product or service used in, or intended for use in, interstate or foreign commerce.”

What does the DTSA mean for employers?

  • Access to federal court. Prior to the enactment of the DTSA, there existed no federal civil cause of action for trade secret theft. As a result, a patchwork of state law governed misappropriation litigation. While the general acceptance and adoption by states of the Uniform Trade Secrets Act resulted in some uniformity, differences in state trade secret misappropriation law of significant consequence remain. The DTSA does not preempt this state law; its enactment is instead expected to result in the development of a body of uniform federal trade secrets misappropriation law that complements existing state law.
  • Access to new civil seizure remedy. The most significant difference between the DTSA and existing state trade secret misappropriation law is that, under the DTSA, a court can impose an ex parte civil seizure of property. Upon a showing of “extraordinary circumstances,” a federal court may issue an order seizing such property as is “necessary to prevent the propagation or dissemination of the trade secret.”
  • No adoption of inevitable disclosure doctrine. Under the inevitable disclosure doctrine, a plaintiff may prove misappropriation of trade secrets by establishing that a former employee’s new employment is such that he or she will inevitably rely on or use the plaintiff’s trade secrets. Many states have rejected this doctrine. The DTSA is designed to ensure that the doctrine is not introduced in states that have rejected it. The statute forbids injunctions that “conflict with an applicable State law prohibiting restraints on the practice of a lawful profession, trade, or business” or that limit employment based “merely on the information the person knows.”
  • New notice to employees required. The DTSA includes a whistleblower protection provision that provides immunity for disclosure of trade secrets: (a) to government officials or an attorney solely for the purpose of reporting or otherwise investigating a suspected violation of law, or (b) in a complaint or other document filed under seal in a lawsuit or other proceeding. Employers must give notice of this immunity from criminal and civil liability in “any contract or agreement with an employee that governs the use of a trade secret or other confidential information.” Employers who fail to comply with this requirement cannot recover punitive damages or attorneys’ fees that may be available in an action against the employee under the DTSA.

What should employers do now?

Employee misappropriation of confidential and trade secret information poses a growing threat to employer investment in innovation and competitive market position. The DTSA is a new tool that employers may use to access federal courts to manage and eliminate employee misappropriation of trade secrets. In light of its recent enactment, we recommend that employers consider the following actions:

  • Review existing policies regarding confidential and trade secret information and existing employee confidentiality agreements to ensure compliance with the DTSA’s new employee notice requirement.
  • Recognize that the DTSA does not lessen the burden of establishing the existence of a protectable trade secret. In this regard, the most important action that an employer can take is to identify its trade secret information and to take reasonable measures to keep the information secret. Such measures may include implementing policies restricting the use and disclosure of confidential and trade secret information, requiring employees to sign confidentiality agreements, marking trade secret information as “confidential,” and restricting access to confidential and trade secret information.
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Employer Compliance with Texas’ New Open-Carry Law

Texas House Bill No. 910, effective January 1, 2016, allows handgun license holders in Texas to carry a holstered handgun openly anywhere that a concealed handgun is permitted. Employers’ existing policies prohibiting guns on employer property are lawful under the new open carry law, and Texas law already requires private property owners that want to keep guns from their property to notify the public “orally or by written communication” that guns are prohibited. Although the notice aspect of the law has not changed, the precise wording of the notice to prohibit handguns has changed.

While the new statute allows property owners – or those with authority to act for the owner – to communicate the prohibition “orally” or in writing, the most effective form of communication to visitors will probably be the statutorily-prescribed signage. Beginning January 1, 2016, to prohibit the open carry of handguns, a sign must specifically state as follows:

“PURSUANT TO SECTION 30.07, PENAL CODE (TRESPASS BY LICENSE HOLDER WITH AN OPENLY CARRIED HANDGUN), A PERSON LICENSED UNDER SUBCHAPTER H, CHAPTER 411, GOVERNMENT CODE (HANDGUN LICENSING LAW), MAY NOT ENTER THIS PROPERTY WITH A HANDGUN THAT IS CARRIED OPENLY.”

“DE ACUERDO CON LA SECCIÓN 30.07 DEL CÓDIGO PENAL (INGRESO SIN AUTORIZACIÓN DE UN TITULAR DE UNA LICENCIA CON UNA PISTOLA A LA VISTA), UNA PERSONA CON LICENCIA SEGÚN EL SUBCAPÍTULO H, CAPÍTULO 411, CÓDIGO DEL GOBIERNO (LEY SOBRE LICENCIAS PARA PORTAR PISTOLAS), NO PUEDE INGRESAR A ESTA PROPIEDAD CON UNA PISTOLA A LA VISTA.”

A sign must display word for word the exact language above to convey proper notice. In addition, the notices must be contained on separate signs, in English and Spanish, in contrasting colors with block letters at least one inch in height, and displayed in a conspicuous manner clearly visible to the public. The State does not itself make these signs available; they must either be created by the property owner or purchased from a third party.

To the extent a property owner also wants to prohibit concealed carry of handguns, below is the additional signage requirement to do so. These signs must be posted in addition to the no-open-carry signs:

“PURSUANT TO SECTION 30.06, PENAL CODE (TRESPASS BY LICENSE HOLDER WITH A CONCEALED HANDGUN), A PERSON LICENSED UNDER SUBCHAPTER H, CHAPTER 411, GOVERNMENT CODE (HANDGUN LICENSING LAW), MAY NOT ENTER THIS PROPERTY WITH A CONCEALED HANDGUN.”

“DE ACUERDO CON LA SECCIÓN 30.06 DEL CÓDIGO PENAL (INGRESO SIN AUTORIZACIÓN DE UN TITULAR DE UNA LICENCIA CON UNA PISTOLA OCULTA), UNA PERSONA CON LICENCIA SEGÚN EL SUBCAPÍTULO H, CAPÍTULO 411, CÓDIGO DEL GOBIERNO (LEY SOBRE LICENCIAS PARA PORTAR PISTOLAS), NO PUEDE INGRESAR A ESTA PROPIEDAD CON UNA PISTOLA OCULTA.”

As with the open-carry signs, a concealed-carry sign must display word for word the exact language above to convey proper notice and follow the other rules noted above with respect to English and Spanish versions, contrasting colors, block letters, letter size, and conspicuous posting.

In addition to posting the signs, employers desiring to prohibit open and/or concealed carry of guns may want to develop a policy prohibiting the practice to put employees clearly on notice.

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