Below is a review of the posts (on Facebook, LinkedIn, and X [formerly Twitter]) from the past week. You can check out the full posts by clicking on the links.
The post on Sunday 2/4/2024 explained why non-union employers need to pay attention to the NLRB. Yes, you, the employers of almost 90% of the US workforce – because the National Labor Relations Act (NLRA) still applies in certain (important) circumstances. Section 7 of the NLRA provides that all private-sector, non-supervisory workers have the legal right to engage in “protected, concerted activity” for their “mutual aid or protection” and employers cannot interfere with that right. It is pretty broad (more than forming a union and negotiating a collective bargaining agreement), including the example noted in the post. The definitions (or interpretations) of when activity is considered “protected” and when it is “concerted” have changed over the years by the NLRB and courts. At this time the NLRB is interpreting both terms very broadly – how that affects employees and employers is in the post.
So why do you care now? First, because of the effect on handbooks. Certain policies (such as those listed in the post) could now be deemed to violate Section 7 rights. The prior categorization of workplace policies as restrictions that were presumptively permissible, suspect, and presumptively impermissible have been eliminated by the Stericycle case (which we’ve discussed in our posts on August 27, 2023, September 29, 2023, January 5, 2024, January 15, 2024). Under the NLRB’s analysis in Stericycle, the question is not whether there is a way to construe the policy permissibly or the other things noted in the post. Rather, the NLRB said that it would consider policies from the perspective of an “economically dependent” employee, not trained as a lawyer, and policies will be deemed unenforceable if they could possibly be construed as restricting employees’ protected concerted activity. The burden this now places on employers is noted in the post.
The practical effect of Stericycle is that it is hard to anticipate how employees may act – especially with evolving technology – to cause undue disruption or harm to the employer, its workers, or clients/customers. Because of that, employers are usually inclined and advised to act as noted in the post. For example, insubordination is generally recognized as grounds for discipline. Therefore an employee who challenges a decision to withhold pay increases for a group of employees, and continues to argue the point after being directed to get back to work, might be deemed “insubordinate.” But there is also an NLRA implication as described in the post. And that is why under Stericycle there now might be trouble for the policy’s validity. See the post for an explanation.
But it is not only in the handbook policy area where employers need be concerned with actions of the NLRB. In mid-2023, the NLRB’s General Counsel issued a memo taking the position that noncompete agreements are generally unlawful. There has been much discussion since then, but it perhaps carries more weight after Stericycle. What is the connection? See the post. When looked at in the current environment of much broader legislative and regulatory hostility to noncompete agreements on both the federal and state levels, the General Counsel’s memo and analysis add another layer of legal risk for employers to consider.
But wait, there is even more. The NLRB also adopted a case-by-case approach in Miller v. Plastic Products, Inc., relative to whether an individual is acting on behalf of others and has thereby engaged in “concerted” activity. In Plastic Products the NLRB overturned a prior decision that had established a checklist of specific factors to review in making that determination. The NLRB’s reasoning for its decision is in the post. Now the standard is to look at the totality of circumstances. And what does that mean for employers? See the post.
TAKEAWAY: Rights under Section 7 of the NLRA apply to both union and private sector workplaces – employers must know the law. As that law i9s fluid right now, best practices are to consult a labor and employment lawyer.
The post on Monday 2/5/2024 was about setting limits on employees’ hot-button social media posts. There are so many legal implications! Can an employer fire someone for what they say on social media? Probably, but that isn’t always the recommended course of action. One current issue heating up social media is employee comments on the Israel-Gaza conflict. The question is how far employers should go down this road that can include discipline and even termination under the circumstances noted in the post. But of course there are exceptions that come into play.
The starting point is that most US employment is at will (as contrasted with Europe as noted in the post). So what does at-will status mean to the ability to terminate (or not offer) employment as a result of a socmedia post? See the post. But the employer’s ability to terminate (or not hire) is still limited by the worker’s membership in a legally protected class (such as those listed in the post). Employers have to carefully look at socmedia posts to see if any of those classes is implicated. Again, that puts a heavier burden on the employer as noted in the post. And don’t forget about state and local law too – these might be more expansive than federal law.
And if the socmedia use involves concerted activity, the employee is probably protected under Section 7 of the NLRA. A good but simple explanation of concerted activity is in the post. So when it comes to a controversial employment-related post by an employee, the employer should first determine if it was in a group context such as those noted in the post.
Are there other situations in which an employee might claim legal protection for a socmedia post? Yep. For example, employees might claim a First Amendment right to publish or share social media postings when facing discipline or termination. But is there such legal protection? See the post. And what about employees’ right to privacy and the employer’s (in)ability to regulate what employees do in their own homes or using there own devices? Again, that right is not always applicable in the circumstances. Why is that See the post for an explanation.
But even if employers CAN fire employees for their socmedia posts, that does not mean they SHOULD do so. There are alternatives available to an employer such as those noted in the post. Employers just determine if they should act, such as if an offensive post could be used as evidence of discrimination or for other things as noted in the post.
So what can or should prudent employers do at the outset? First up is to have clear, written social media policies including the provisions noted in the post. Make sure the policies are distributed and explained to employees as detailed in the post. And have employees sign an acknowledgment that they received and understand the policy. Next, if an employer feels there is a social media policy violation, it should conduct an investigation before jumping to adverse action. The investigation, and the timing, will vary with the individual circumstances as noted in the post.
TAKEAWAY: Employers must know if and how to act in cases of potential illegal or harmful social media posts – guidance from an employment lawyer is a must.
The post on Tuesday 2/6/2024 told us that condominium, homeowners associations to see continued growth in 2024. By more than 3000-5000 new associations! Now more than 75 million people in the US live in a community association (condo, cooperative, or HOA) and that will only increase. But the same concerns that impact the general housing market hit here too – see the post. Community associations are popular for the multiple reasons noted in the post. The 2022 Homeowner Satisfaction Survey, a biennial, nationwide report conducted on behalf of the Foundation for Community Associations Research (an affiliate of Community Associations Institute, the leading international advocate for community associations), provides a valuable snapshot of how homeowners feel about condominium and homeowners’ associations. For example, 89% rate their overall experience as very good and 87% say members of their elected governing board serve the best interests of their community. More example survey responses are in the post. A link to the 2023 national and state statistics (including the number of communities, housing units and residents since 1970 nationwide, the number of associations, residents and units by state, and more national data).
TAKEAWAY: As more and more people choose to live in community associations, knowing the applicable rules and law becomes more important. Community association lawyers should be consulted prior to purchase and as issues arise.
The post on Wednesday 2/7/2024 was about handbook updates: remote workers. They may or may not be covered in the same way or to the same extent as workers on-site. This is especially important if any remote workers moved to a new location this year. It is good for employers to have an up-to-date list of the municipalities and states in which they have remote employees. Why? The state in which remote employees are physically located is often considered the state in which they “work” – which can affect handbook policies. Some state and local employment laws that may apply to remote workers include leave laws (including bereavement leave, jury duty, and election leave) which may vary not only by state but also locality, non-compete law (which may vary by state), and more as listed and discussed in the post. Drug testing too can vary by state. Some states had notable developments recently as noted in the post. And US DOT expanded its regulated industry drug testing as of June 2023 as noted in the post. Want more? Let’s talk background checks. There are currently about 37 states and more than 100 municipalities that have enacted legislation banning application questions about arrest history and convictions and limiting other things as noted in the post. Employers must know which state and local laws apply when running background checks on remote workers.
TAKEAWAY: Employers should update handbook policies and check (1) where remote workers are physically located and 2) whether the employment laws of the states and localities where the remote workers reside require additions or changes to the handbook policies. Yep, contact an employment lawyer.
In the post on Thursday 2/8/2024, we read about five key 2024 changes and issues in employment law that every business owner should know. Not all in the post will apply to every reader, but let’s start down the road. First, the US Dept. of Labor has issued a final rule clarifying classification of employees and independent contractors. They have bene and can be expected to continue to crack down on misclassification – and that might lead to the things noted in the post. The post includes a link to the Final Rule. Misclassification impacts workers’ rights to minimum wage and overtime pay and more as noted in the post. The Final Rule, published in the Federal Register on Jan. 10, 2024, will take effect on March 11, 2024.
So what does the Final Rule do? It puts back into place a multi-factor analysis used by courts for decades; it is a totality of the circumstances view. Six factors now guide the analysis of worker classification, including the worker’s opportunity for profit or loss, the financial stake and nature of any resources a worker has invested in the work, the degree of permanence of the work relationship, and the others listed in the post. But that’s not the end of the inquiry; other factors may also be considered if they relevant to the overall question of economic dependence.
Next, the NLRB vastly expanded the definition of “joint employer”. This Final Rule is to take effect on Feb. 26, 2024. Under the new rule, a business is a joint employer if it has the right to exercise control over any of seven enumerated “essential terms or conditions of employment” — even if it never exercises that control and even if the only way it could exercise that control would be through an intermediary. The terms and conditions include wages, benefits, and other compensation; hours of work and scheduling; assignment of duties to be performed; and the others listed in the post. Why do you care about this? Because joint employers must participate in a collective bargaining process. Despite objections received (and disregarded) by the NLRB, the new rule is expected to have at least one stark effect on labor disputes as noted in the post. So what should employers do now? Review current and pending contracts with third parties to see if they could be interpreted as reserving the right to potentially control any essential term or condition of another entity’s employees. More steps for employers to take are noted in the post.
Third, the FTC has proposed a ban on non-compete agreements (and the NLRB is also taking aim at them as noted in our post on Sunday 2/4/2024). What the FTC’s rule would do is detailed in the post; the Rule would supersede all less-restrictive state non-compete laws. The FTC is set to vote on the Proposed Rule in April 2024. Even though litigation is expected if the Rule is adopted, employers cannot wait for the outcome of that litigation. So, in the meantime they should take the steps identified in the post.
Also important is the beneficial ownership reporting requirements under the Corporate Transparency Act. The CTA was enacted to enhance transparency in entity structures and ownership to combat money laundering, tax fraud, and other illicit activities. The CTA requires non-exempt U.S. and foreign entities registered to do business in the US to submit specified information reports to a confidential FinCEN database. Some of what those reports include is noted in the post. Unless an exemption applies, all entities that are formed or registered to do business in the US by the filing of a document with a secretary of state or similar office (e.g., corporations, LLCs, LLPs) will be covered. The CTA identifies 23 entities that are exempt from its application, including that noted in the post. The reporting deadline varies by when the covered entity was created (see the post).
The last item is described in detail in the post.
TAKEAWAY: There are significant changes to employment laws for 2024 – employers must know if and how they apply – and the number or email of a good employment lawyer.
The post on Friday 2/9/2024 noted ‘You’re saying this is over an inch?’ judge asks homeowner who was fined $40k for fence she got permission to build. Problems started for Betty Hooker in 2017 when she got approval from her HOA to build a fence. Then a five-year legal battle ensued which “devastated” Hooker and her family. Despite the fence costing just $8,000, the cost of long-term litigation is almost $40,000. Let’s start at the beginning.
After constructing the fence, the HOA informed Hooker in March 2018 that it encroached on the community’s common area and forest conservation easement behind her home. How much? See the post. The HOA threatened to take legal action if the Hookers refused to move the fence. Betty then got an estimate of the cost to move the fence and debated with the HOA who should pay for the cost. Then the HOA filed a complaint with the court requesting permission to fine her $25 per day, backdated to November 2018, and for her to pay legal costs. In Fall 2019, Hooker decided to represent herself in court. What was the outcome and action taken as a result? See the post.
The HOA disagreed at a court hearing in April 2021 the Hookers were ordered to pay over $22,000 in fines and over $17,000 in attorney’s fees. Betty then sought legal help to appeal the court ruling and a warrant was issued by the HOA to seize her house. On January 7, 2022, the Court of Appeals heard the case and the judge appeared shocked as to what the dispute was about (see the post). The legal arguments made by attorneys for the Hookers and the Association on appeal are noted in the post. Three months later the Court of Special Appeals ruled – its decision and the basis for that ruling are in the post. The take on that by both parties’ attorneys is also in the post.
TAKEAWAY: Know what the Governing Documents require (not what you think they require or what you want them to require), follow them to a T, and get a community association lawyer to help you with enforcement issues.
Finally, in the post yesterday 2/10/2024, we saw an EEOC commissioner schools Mark Cuban on Title VII hiring practices. Yep, the law applies to everyone! Mark Cuban, who as you probably know is a billionaire investor and personality on Shark Tank, met some resistance from a top official in the EEOC recently. It all started with a tweet from Cuban about how diversity in hiring can be a “competitive advantage” for a company and influence his hiring decisions. Cuban’s exact tweet is in the post. The only problem is that what he said does not conform to federal law. EEOC Commissioner Andrea Lucas told Cuban he was “dead wrong” on discrimination law. Lucas tweeted: “EEOC Commissioner here. Unfortunately you’re dead wrong on black-letter Title VII law. As a general rule, race/sex can’t even be a ‘motivating factor’ — nor a plus factor, tie-breaker, or tipping point. It’s important employers understand the ground rules here.” Lucas also tweeted separately about employment law and linked to the EEOC’s race and color discrimination guidance (both of which are linked in the post). Lucas continued: “Can race/sex ‘be part of the equation’ for an employment decision, as long as it isn’t the ‘but-for’ factor? Generally, no. Title VII uses ‘motivating factor’ liability. This isn’t an opinion; reasonable minds can’t disagree on this point. It’s the plain text of Title VII.” But what about when DEI is not tied to hiring decisions? See the post.
TAKEAWAY: Let’s say it again: the law applies to everyone, no matter your net worth or high profile. Stay in compliance to stay out of legal hot water.
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