Pregnant Workers will Enjoy Broad New Job Protections under Recently Signed Massachusetts Law

Massachusetts recently took another step to protect members of its workforce. Late in July, Gov. Charlie Baker signed the Pregnant Workers Fairness Act, which provides broad new rules for pregnant women. The law will take effect on April 1, 2018. Under it, employers must grant reasonable accommodations for pregnancies or any condition related to then, including “lactation, or the need to express breast milk” for children after they are born. Employers will be prohibited from the following:

  1. Taking adverse action against an employee who uses or requests a pregnancy accommodation;
  2. Refusing to reinstate an employee to her job after a reasonable accommodation period ends;
  3. Denying a pregnant employee workplace opportunities because of her pregnancy-related accommodation needs;
  4. Requiring an employee to accept pregnancy accommodations that are “unnecessary to enable the employee to perform the essential functions” of her job; or
  5. Knowingly refusing to hire a pregnant woman due to her pregnancy or a related condition, including her lactation needs.

Just as in other handicap accommodation situations, the Pregnant Workers Fairness Act exempts employers from compliance when doing so will cause an undue hardship. It also requires employers to engage in an interactive process to determine whether and what sorts of accommodations may work for pregnant employees who require them. Among the accommodations the Act suggests are required in all but unusual circumstances are more frequent restroom, food and water breaks; seating adjustments; and limits on lifting 20 pounds or more.

Though the Pregnant Workers Fairness Act does not take effect until April 1, 2018, employers must notify their employees about it by January 1, 2018. A new policy should be created and placed in employee handbooks and distributed to existing employees and all new hires.

Employees may be Free to Speak their Minds, but Employers are Free to React

Free speech is not always free. That seemingly obvious point was apparently lost on Google employee James Damore, a man making headlines recently after he was fired for writing a memo that opined women are unsuited to work as engineers. Google’s efforts to promote them, he wrote, were unfair and divisive.

So, too, was Mr. Damore’s opinion. Not surprisingly, it rankled many inside Google, which reacted by terminating Mr. Damore’s employment on August 7. Mr. Damore, supported by the likes of Juilian Assange and other political conservatives, responded by threatening legal action. “As far as I know,” he reportedly wrote, “I have a legal right to express my concerns about the terms and conditions of my working environment and to bring up potentially illegal behavior, which is what my document does.”

There’s little question that Mr. Damore is correct. As far as he knows, he may say whatever he likes to whomever he chooses. What he doesn’t seem to know, however, is that those around him have rights, too. People who hear his views have a right to be offended. They may disassociate themselves from him if they choose. Google and other private employers have the right to decide who works for them. They are not restricted by free speech guarantees in the First Amendment to the U.S. Constitution. Like Mr. Damore, private employers have their own form of free speech rights, and it includes the right to say “you’re fired” to workers who, in their judgment, are disruptive, potentially damaging to their business, or in any other way unsuitable to remain employees.

It’s unclear whether Mr. Damore will actually file his lawsuit or how, if he does, what his legal theory might be. But he fears not, no doubt, as he garners support and job offers from those who agree with his missives about women and work. He’s now a hero of sorts at the likes of Breitbart News and reportedly has a job offer at Wikileaks. Good for Mr. Damore, if this is what he intended. If not, he has learned what he should have known all along. He is free to speak, and the world around him can react to what he says.

Noncompetition Agreement Legislation Appears No Closer to Passage in Massachusetts

The effort to regulate the use of noncompetition agreements continues to languish in a legislative committee, where most of several competing proposals were referred early in 2017. Alongside them – or, as it were, within the same proposed bills – sits the uniform trade secrets act, a law aimed at protecting the advantage businesses enjoy from confidential trade information.

No fewer than six bills are now being considered by the Massachusetts Legislature’s joint committee on labor and workforce development. One proposed law would void restrictions on post-employment competition contained in written employment agreements while permitting limitations on solicitation of customers or employees in those same contracts to be enforced. Another would permit noncompetition agreements under specifically prescribed conditions, including 10-day advance notice for employees, opportunities to consult with counsel, and payment of wages during any restricted period of time. Some versions of the proposed law would ban noncompetes for lower level workers and limit them to time periods of between three and 12 months. Two bills require renewal of noncompetition agreements at regular intervals, and some permit enforcement of them only in the county where an employee resides.

It’s unclear whether or when the state Senate and House of Representatives will agree on and pass a version of noncompetition legislation or, if they ever do, whether the governor will sign it into law. Given the long history of failed efforts to ban these contracts, it seems most likely that, if any legislation is ever to become law, it will impose conditions on noncompetition agreements while permitting businesses to continue to enforce them where they are essential. Such enforcement might very well require that employers pay at least a portion of the wages their former workers will lose as a consequence of a noncompetition restriction.

U.S. Supreme Court Delays Hearing on Cases that may Decide whether Class Action Rights can be Waived

The U.S. Supreme Court may have accepted a group of cases that will determine whether companies can require their workers to waive class action rights, but that doesn’t mean it’ll be deciding this important question anytime soon. After accepting the cases for review in January, the Court announced that it will not hold oral arguments this term. The cases will be argued in Fall 2017 and decided some time thereafter, perhaps well into 2018.

The significance of this is patent. First, it suggests that the Court may be divided on the class action waiver question and requires a deciding voter. The Court now has only 8 justices in the wake of the Republicans’ 2016 refusal to consider President Obama’s nominee to the bench. They won’t do the same with their own party’s nominee(s), and the Court will surely have 9 members soon. Second, the delay means that uncertainty over class action waivers in employment agreements will remain for some time. This will likely encourage litigation in lower courts over the issue and may cause decisions to be delayed.

It is common today for companies to have their workers sign agreements that include arbitration provisions requiring lawsuits to be pursued individually. This is sometimes impractical due to the small size of a claim, and an employee or independent contractor therefore may seek to bring suit on behalf of others. The Supreme Court has previously found that mandatory arbitration agreements are generally enforceable. It’s now being asked to resolve lower court disagreement about whether federal law allows companies to avoid class action lawsuits through arbitration clauses.

Legislator will Try Again to Impose Liability on Companies for Wage Violations by Entities they Contract With

After failing to pass what’s referred to as a wage theft bill in the recently ended legislative session, the bill’s sponsor is not giving up. According to published reports, Sen. Sal DiDomenico will reintroduce the controversial measure when legislators go back into session in January.

The proposal would make employers that contract with third parties to have labor performed or services provided to them guarantors of the payment of wages earned by the employees of those third parties. It appears to make such employers, in effect, co-employers of the third party’s employees. If, then, the third party doesn’t pay its workers, the company that received the benefit of the workers’ services would be liable. The proposal does not make an exception for companies that pay whatever is due under their third-party contracts. The effect could be, it seems, that company A pays for labor provided to it by company B and is nonetheless liable directly to the company B’s employees because it failed to remit wages earned by them. This could mean company A pays the same penalties — triple damages and legal fees — as it would if it failed to pay its own employees for work performed.

The statute is apparently aimed at upending a practice under which large companies hire third parties to be employers of workers who actually perform services for them directly. Whether it will ever becomes law remains to be seen.

Senate Action on Noncompetition Bill May Lead to its Failure in MA Legislature

The Massachusetts Senate recently followed the lead of the House of Representatives by passing a comprehensive bill to regulate noncompetition agreements. While this seems to be progress toward a final re-writing of laws that govern these often troublesome employment agreements, the Senate version of the bill varies significantly from the one unanimously passed last month by the House. That means, of course, that the two legislative bodies must huddle together and work out their differences. If they can do so and garner approvals of any agreed form in both the Senate and House, a noncompetition bill would be presented to the Governor for his signature. Because the current session ends July 31, the Senate and House need to move quickly.

Massachusetts House Passes Noncompetition Bill with Substantial Limits — Unanimously

The Massachusetts House of Representatives recently passed a bill that imposes rules for noncompetition agreements. While the bill has yet to become law – it is now being considered by the Senate, which will have to pass it before it can become law, an event that will also require the governor’s signature or, in the alternative, further legislative action – it certainly represents progress on an issue that has long been considered in Massachusetts.

In what may be an indicator of the ultimate passage of the bill into law, it passed unanimously, 150-0. Rules on noncompetition agreements imposed by the bill include the following:

  1. All agreements must be written and signed by employer and employee. Employers must provide them to prospective employees at least 10 days before work begins, and noncompetition forms must inform employees of their right to consult counsel before signing;
  2. Noncompetition agreements for existing employees must meet the same criteria. In addition, employees must receive some form of consideration – money or other material benefit – in addition to continuing employment;
  3. Noncompetition agreements must be narrowly tailored to protect an employer’s trade secrets, confidential information, and/or customer goodwill – that is, a business’s positive relationships with its customers or its positive reputation;
  4. The maximum restricted period is 12 months in most cases, and geographical reach must be reasonable; and
  5. Compensation to affected employees must be provided in the form of pay equal to at least half their highest annual base salary during the two years that precedes employment termination, unless employer and employee agree to compensation in some other form.

The bill would also bar enforcement of noncompetition agreements against employees who are not exempt from federal overtime pay requirements; those under 18; and employees fired without cause or laid off. It includes a provision for enactment of the Uniform Trade Practices Act.

Moving Jobs in Face of Noncompetition Agreements takes Advance Planning

Moving jobs can be stressful, even when motivated by promises of better pay, a chance to move up the business ladder, or a more pleasant work experience. When a new job is in the same industry as the old, as is frequently the case, the stress that naturally comes with new job challenges can be compounded by a former employer’s concerns over uses of its business information. In some cases, those concerns are documented by writings that include substantial penalties for disclosing or misusing confidential data. Employees commonly sign such agreements without giving them much thought, until, that is, it’s time to move jobs. It’s at that point that many discover they may be restricted from competing at all with their former employers.

Navigating issues like these takes some planning. Here are a few steps employees should consider taking before signing on with a new company or resigning from a current one.

  1. Make sure you are familiar with all the documents you signed with your current company. If you need to, ask to see the contents of your personnel file. It is not uncommon for employees to discover restrictive agreements that they don’t recall signing. If you don’t understand your agreement, seek legal help.
  2. Consider what access you’ve had to internal documents and how, if at all, any information that may be contained in them could be used with a new employer. The answer to this question normally turns on the nature of an employee’s job.
  3. Be sure your prospective new employer is aware of any restrictive covenants you may have signed with your current one. Most now require new employees to affirm that they have no restrictions that affect performance in a new job. Failing to disclose relevant information can lead to big trouble down the road.
  4. Don’t keep copies of any of your current employer’s documents, whether in paper or electronic form, regardless of content. It is best to err on the side or returning documents that are not confidential than to keep any that even arguably are. Be sure that key materials or customer information is not stored on a personal phone or laptop. If it is, consider the potential for future disputes.
  5. If you signed a noncompetition or non-solicitation agreement, carefully coordinate your conduct in a new job with your prospective employer. Consider the reaction your current company will have to your job move and how you can minimize the risks that may be associated with that reaction. Carefully plan and execute your departure from your current employer.

Good Wage and Hour Records are Important to Business Success

Starting a business brings many challenges. Among them is the often overlooked need to create and retain records of employee hours and pay. Many small companies have found out the hard way that failing to do so can lead to severe penalties.

In Massachusetts, employers need to maintain records that include employee names, addresses and occupations, amounts paid each week, and hours worked daily and weekly. All of this is open to inspection by state and federal wage authorities, and fines can be levied for a failure to properly keep records. Often even worse than this are wage-related damages an employer can face if records are not available to defend against claims brought by former employees or the government. Because employers are obligated to keep pay records, those who don’t do so face the prospect of having a court accept as true whatever claims employees may make about the number of hours they worked and the amount of pay they received for that work. That can lead to the triple damage and legal fee awards against them.

The Massachusetts Attorney General aggressively pursues claims brought by former employees. The AG can audit records for individual employees or entire staffs, with major financial implications. In one recent case, an employer paid $300,000 in back wages and penalties as the result of an AG audit. Employers faced with these sorts of inquiries normally have little flexibility when transgressions of the law are identified. They either settle with the government, normally at a substantial cost, or face enforcement action that can lead to far higher penalties. In some cases, employees bring class action claims that can be financially devastating if not settled quickly.

Massachusetts Sick Leave Law Takes Effect Today

Effective today, July 1, 2015, all Massachusetts employees enjoy guaranteed sick leave benefits. The law that was approved by voter referendum last November mandates that every employee receive one hour of accrued sick leave for every 30 hours of work. The leave can be used for a variety of purposes — including worker or family illness, medical appointments, and dealing with domestic violence — and must be paid by employers with 11 workers or more. It is enforced by the Massachusetts Attorney General, which recently issued final regulations, a mandatory workplace poster, and a draft policy for employers to implement. Those materials can be found on the AG’s website at www.mass.gov.

Employers who have not implemented written policies that comply with the statute should do so promptly. The law was incorporated as a new section of the Massachusetts Wage Act, which provides substantial penalties for violations. It is illegal to refuse to provide sick leave, to require documentation under most circumstances, or to punish workers for using it. Employees can use leave in increments as small as one hour at a time. Though they are prohibited from abusing leave, employers should move cautiously before disciplining employees for improper sick leave usage.