Over the past three months, the National Labor Relations Board (the Board) has more actively scrutinized the use of severance agreements that contain confidentiality clauses which might prevent employees from sharing information about their terms of employment. This was particularly evident in the Board’s recent decision in McLaren Macomb, 372 NLRB No. 58 (2023), which we wrote about here. In McLaren Macomb, the Board ruled that that overly broad non-disparagement and confidentiality provisions included in severance agreements offered to certain employees violated Section 8(a)(1) of the National Labor Relations Act (the Act).
The Board’s General Counsel, Jennifer Abruzzo, provided further clarification on the meaning of McLaren Macomb in a memorandum that was issued on March 22, 2023. Below are the most important takeaways from that memorandum.
The Tipped Wage Workers Fairness Amendment Act (TWWFAA) is a law that was passed in Washington, D.C. in 2018 to increase the minimum wage for tipped workers. One important aspect of the TWWFAA is its focus on addressing sexual harassment in the workplace through mandatory training for employees and employers.
As an employer of tipped workers, it’s important to understand your responsibilities under the TWWFAA in regards to sexual harassment prevention training. Sexual harassment is a serious issue that is crucial for employers to take steps to prevent it in the workplace.
Under the TWWFAA, all employers of tipped workers in D.C. are required to provide sexual harassment prevention training to their employees. This training must be provided at least once every two years and must be interactive, meaning that employees must be able to ask questions and receive answers during the training.
Employers have a timeline of one year from the effective date of the law to provide sexual harassment prevention training to their employees. This means that employers must ensure that all of their tipped workers receive the required training within one year of the law’s effective date.
In addition to requiring employers to provide training, the TWWFAA also mandates that managers and supervisors of tipped workers receive additional sexual harassment prevention training.
Training Requirements
Covered Individuals
Training Platform
Frequency
Manager
Must complete live in-person training.
Every 2 years
Owner or operator
Must complete training either live in- person or online.
Every 2 years
Employee
Must complete training either live in- person or online.
Every 2 years
New Employee
Must complete training either live in- person or online.
No later than 90 days after hire, unless the employee received the training within the past 2 years.
These provisions of the TWWFAA are important for several reasons. First and foremost, they help to create a safer and more respectful workplace for tipped workers. Sexual harassment is a serious issue that can have devastating consequences for those who experience it, including emotional distress, lost income, and career setbacks.
By requiring employers to provide sexual harassment prevention training and to ensure that managers and supervisors receive additional training, the TWWFAA helps to ensure that all levels of the workplace are equipped to prevent and respond to sexual harassment. This can help to reduce the incidence of sexual harassment in the workplace and create a more respectful and inclusive work environment.
Employers should also note that failure to comply with the sexual harassment prevention training requirements of the TWWFAA can result in penalties and fines. Therefore, it is important for employers to ensure that they are in compliance with the law and that they provide the required training to their employees and managers within the specified timelines.
Overall, the TWWFA is an important piece of legislation that addresses several issues related to the treatment of tipped workers. By including provisions related to sexual harassment prevention training, the TWWFAA helps to create safer and more respectful workplaces for tipped workers in Washington, D.C. and beyond.
There have been important developments in data privacy laws as both the Virginia Consumer Data Protection Act (“VCDPA”) and California Privacy Rights Act (“CPRA”) are now in effect. Both laws are remarkably expansive and require careful attention to achieve compliance.
The Virginia Consumer Data Protection Act (VCDPA)
The Virginia Consumer Data Protection Act (VCDPA) applies to any person or business that conducts business in Virginia and processes personal data of Virginia residents.
Who does the VCDPA apply to?
Under the VCDPA, obligations are imposed on entities that conduct business in Virginia or produce products or services that are targeted to Virginia residents and that either:
Control or process the personal data of at least 100,000 consumers during a calendar year.
Control or process the personal data of at least 25,000 consumers and derive at least 50% of its gross revenue from the sale of personal data.
Personal data is linked or reasonably linkable to an identified or identifiable natural person. This includes, but is not limited to, names, addresses, email addresses, IP addresses, and other unique identifiers.
On October 13, 2022, the Department of Labor (the “DOL”) published its proposed rule on classifying employees and independent contractors. This rule would update the factors analyzed when determining whether a worker is an independent contractor or an employee under the Fair Labor Standards Act (the “FLSA”).
DOL’s press release revealed that when drafting this rule, it focused on preventing employee misclassification as independent contractors, preserving worker rights, and providing a consistent approach to resolving FLSA cases. Specifically, Secretary of Labor Marty Walsh said:
“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers… Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages. The Department of Labor remains committed to addressing the issue of misclassification.”
Under the newly proposed rule, “an employer suffers or permits an individual to work as an employee if, as a matter of economic reality, the individual is economically dependent on that employer for work.” The rule differentiates employees from independent contractors in stark terms – explaining that an independent contractor is only a worker who is “as a matter of economic reality, in business for themselves.”
Notably, the rule sets forth a six-factor test to guide any assessment of the economic realities of the working relationship between a worker and an employer. Those six factors are:
Beginning June 1, 2023, the Virginia Consumer Data Protection Act (CDPA) will come into effect for Virginia businesses and consumers.
What is the CDPA?
At its core, the CDPA is a data privacy law intended to provide guardrails on how businesses use and store the data of Virginia consumers. Virginia was the second state to pass a state data privacy law after California’s California Consumer Privacy Act (CCPA).
The CDPA will apply to covered businesses that conduct business in Virginia or affect Virginia commerce through targeting products and/or services to Virginia residents. For the CDPA to apply to a company, it must either:
Control or process the personal data of at least 100,000 consumers during a calendar year; or
Process the personal data of at least 25,000 consumers and derive more than 50 percent of their gross revenue from selling personal data.
Personal data in this context includes “any information that is linked or reasonably linkable to an identified or identifiable natural person.”
What are the CDPA requirements?
The CDPA draws on concepts from the California Privacy Rights Act, CCPA, and the General Data Protection Regulation (GDPR) by establishing consumer rights relating to Privacy.
The main areas of the CDPA that businesses should prepare for are as follows:
AI refers to a “machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations or decisions influencing real or virtual environments.”[1] It can feature in software used to complete tasks previously completed by human beings. Relevant to the discussion with Commissioner Sonderling, employers can use AI in most employment and/or hiring decisions, such as who to inform about a new position, who to interview, and who to select for a position.
When making those decisions, employers could suffer liability if they discriminate against an individual based on their race, color, religion, sex, national origin, age, pregnancy, disability status, or genetic information[2]. Unlawful discrimination can occur two ways – disparate treatment and disparate impact. Disparate treatment occurs when individuals are intentionally discriminated against by an employer, whereas disparate impact refers to unintentional discrimination – where an employer’s neutral policies or procedures negatively impact individuals in a particular protected class.
Employers should be aware, as Commissioner Sonderling stressed in his remarks, that AI technologies are only as good as the data and training used to develop them. There have been numerous instances where employers who used AI tools to assist in employment and/or hiring decisions have been left with discriminatory results and potential disparate impact liability as a direct result of the technology.
Commissioner Sonderling offered some examples of ways that AI could unintentionally produce discriminatory results in employment decisions:
