DC Walks Back Certain Aspects of its Pending Ban on Non-Compete Agreements

DC employers may be aware of the District of Columbia’s impending ban on non-compete agreements, which originally was scheduled to become effective on October 1, 2021 and which was set to become one of the most explicit bans on non-compete agreements in the nation.

"upset,At,You,For,Breaching,The,Non-compete?,Of,Course,Not."The initial iteration of the law, titled the “District of Columbia Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”), prohibited employers from requiring employees who perform work in Washington D.C. (or a prospective employee whom the employer reasonably anticipated would perform work in Washington, DC), from signing any agreement that included a non-compete provision.  The Act also made it unlawful for employers to have any workplace policy prohibiting employees from (i) being employed by another person; (ii) performing work or providing services for pay for another person; or (iii) operating their own business.  In other words, the Act rendered virtually all non-compete provisions unenforceable and forbade employers from instituting workplace policies, such as anti-moonlighting rules, that limit employees’ ability to work for other people or start their own business.

However, along with the effective date of the Act being delayed several times (first to April 1, 2022 and now to October 1, 2022), the D.C. Council recently passed the Non-Compete Clarification Amendment Act of 2022 (the “Clarification Amendment Act”), which tempers certain aspects of the law.

First, the Clarification Amendment Act explains that Continue reading

Both Employees and Employers Benefit from Revisions to Washington, D.C. Paid Leave Law

Just two years after the enactment of Universal Paid Family Leave Act, it appears that thousands of private-sector employees in Washington, D.C. will receive a substantial increase in the annual amount of paid leave to which they are entitled. At the same time, D.C. employers will receive a significant tax cut to the amount they are required to pay to fund this program.Retro,Styled,Alarm,Clock,Covered,Pile,Of,Money,Isolated,On

The Universal Paid Family Leave Act, which took effect in July 2020, allows eligible D.C. employees to take up to (i) eight weeks for parental leave; (ii) six weeks for family medical leave; and (iii) six weeks for personal medical leave.  This program, which is funded through employer-paid taxes, has cost less than previously forecast and now has excess funds. 

As a result, in a letter sent last week to Mayor Muriel Bowser and D.C. Council Chairman Phil Mendelson, D.C.’s Acting Chief Financial Officer Fitzroy Lee stated that by as early as July 1, 2022, employees will now receive (i) twelve weeks for parental leave; (ii) twelve weeks for family medical leave; and (iii) twelve weeks for personal medical leave. In other words, eligible employees will now be able to take double the amount of paid leave for family medical leave and personal medical leave, and 66% more parental leave, than they currently receive. Eligible employees also will now be entitled to a new benefit of two weeks of paid prenatal leave, which was not previously available.

Employees will not be the sole beneficiary to the changes to the Universal Paid Family Leave Act.  Because of the excess funds currently available, the private employers who pay for this leave program will Continue reading

Update to New Maryland Law Requiring Bed Height Thresholds for Hotels

UpdateIn October 2020, we published a blog post noting that with relatively low publicity at the time, the State of Maryland had enacted a law titled an “Act for Lodging Establishments – Accessible Rooms for Individuals with Disabilities – Bed Height,” requiring hotels and other places of lodging with at least 4 guestrooms to provide beds of certain heights in accessible guestrooms for individuals with disabilities, even though providing beds of specified heights in accessible guestrooms is not a requirement of the Americans with Disabilities Act. 

Now, once again with little fanfare, the State of Maryland has made an important change to this law, postponing, by one year, when each requirement is phased in over the course of four years. In the original version of the law, at least 25% of the beds in accessible guestrooms would have been required to meet the new requirements (explained below) by December 31, 2021. Now, however, by December 31, 2022 (i.e., instead of 2021), at least 25% of the accessible rooms in a lodging establishment must Continue reading

Biden’s New COVID-19 Action Plan:  Wage and Hour Issues with Vaccine Mandates

As we advised last week, on September 9, 2021, President Biden issued a new COVID-19 Action Plan that directs federal OSHA to issue a new Emergency Temporary Standard requiring all businesses with 100 or more employees to ensure their workers are either vaccinated or tested once a week.  In response to this Action Plan, we are getting a number of questions from clients relating to various employment-related issues, including a variety of wage and hour issues.  Given that it is a safe assumption that many of you either already have, or will have, similar questions, we thought it would be beneficial to set forth some of the common questions we have received below:

Question 1.  For employees who claim that they cannot receive the vaccine due to religious or medical reasons and thus will need to receive weekly COVID-19 testing, who will be required to pay for that testing? 

Answer:  Biden’s announcement and Action Plan do not say whether it is the employer or employee who is responsible to pay for testing. Thus, we cannot answer this question with absolute certainty.  Nevertheless, there are subtle signals in the language of the Action Plan that appears to indicate the Administration’s intentions to place the cost burden on the employees:

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Court Concludes That A Business’s Website Does Not Need To Comply With The ADA

New,Technologies,,A,Side,View,Of,An,Open,Laptop,,MillennialsWe have been blogging for more than five years about the rising litigation threat over website accessibility, and the surrounding confusion about what type of compliance, if any, is required.  In our initial blog post on this topic in January 2016, we stated that the question as to whether a business’s website and mobile app needed to be accessible with the Americans with Disabilities Act (“ADA”) had no definitive answer at that time because (i) although Title III of the ADA prohibits discrimination against individuals on the basis of disability with regard to their participation and equal enjoyment in places of public accommodation, the statute did not explicitly define whether a place of public accommodation must be a physical place or facility; (ii) there were no regulations from the Department of Justice (“DOJ”) (the federal agency that enforces Title III of the ADA) regarding website accessibility and without applicable regulations, it was unclear how a court would address a lawsuit over website accessibility; and (iii) adding to this uncertainty, the DOJ had emphasized that, despite the lack of regulations, businesses should make websites accessible to the disabled, and relied on a set of guidelines called the Web Content Accessibility Guidelines (“WCAG”).

Five years later, this question still has no definitive answer.  And, the DOJ still has yet to promulgate regulations regarding businesses’ obligations to make websites accessible to individuals with visual and hearing impairments.  In April, however, an extremely positive development occurred for businesses when, in the matter of Gil v. Winn-Dixie Stores Inc., the Eleventh Circuit Court of Appeals (which covers Florida, Georgia, and Alabama) held that websites are NOT places of public accommodation and thus are NOT covered by Title III of the ADA.

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Courts May Begin to Push Back on ADA Website Claims in 2021

Although many industries were hit hard in 2020, no industry suffered as much as the hospitality industry.shutterstock_1215006901  In one bit of good news however, federal courts have begun to push back on lawsuits brought by serial plaintiffs under Title III of the Americans with Disabilities Act (“ADA”) during the last several months based on those plaintiffs’ lack of standing.  This is a much needed development for hotel owners and operators, who hope that this trend will continue into 2021 and beyond.

In order to assert a claim under Title III of the ADA, a plaintiff must establish that she has standing to assert a claim under Article III of the U.S. Constitution.  To establish standing, a plaintiff must establish that she has sustained a direct injury as the result of an alleged wrongdoing, and that the injury is concrete and particularized, not hypothetical or speculative. Continue reading

New Maryland Law Requires Hotels to Provide Lower Beds in Accessible Guestrooms

With relatively little fanfare, the State of Maryland recently enacted a law requiring hotels and other places of lodging (with at least 4 guestrooms) to provide beds of certain heights in accessible guestrooms for individuals with disabilities.  Of note, providing beds of specified heights in accessible guestrooms is not required by the Americans with Disabilities Act. 

This law, titled an “Act for Lodging Establishments – Accessible Rooms for Individuals with Disabilities – Bed Height,” requires each accessible guestroom in a Maryland hotel or other place of lodging to be furnished with a bed that measures at least 20 inches but not more than 23 inches from the floor to the top of the mattress, and has at least a 7-inch vertical clearance under the bed for lift access.  Average bed heights tend to be 25 inches or more, while the average seat height of many wheelchairs is 19 inches. So, these new bed height requirements will certainly require some changes.

The new bed height requirements must be met by the following dates:

  • 25% of the beds in accessible guestrooms must meet these requirements by December 31, 2021;
  • 50% of the beds in accessible guestrooms must meet these requirements by December 31, 2022;
  • 75% of the beds in accessible guestrooms must meet these requirements by December 31, 2023; and
  • 100% of the beds in accessible guestrooms must meet these requirements by December 31, 2024.

While hotels and other places of lodging in Maryland continue to try and regroup and adapt in the wake of the pandemic, this is yet another thing that they will have to keep in mind, and another cost they will need to incur.  While 25% of the beds in accessible guestrooms do not need to meet these new requirements until the end of next year, this is not something that can be done overnight.  So, hotels should begin implementing plans for these new beds in the coming months in order to ensure that the applicable deadlines can be met. Indeed, to the extent that accessible guestrooms are vacant already due to the pandemic and the necessary work can be done safely in accordance with CDC, OSHA, and other applicable guidelines, this might be an ideal time for Maryland hotels to make the necessary changes to avoid disruption, and ensure compliance with the new law.

Court Strikes Down Recent Joint Employer Rule

On September 8, 2020, a New York federal judge struck down most of a U.S. Department of Labor (“DOL”) rule that had narrowed the definition of “joint employer” by limiting when multiple businesses would be liable to the same worker under federal wage and hour law.  The lawsuit was filed by the attorneys general of 17 states and Washington, DC, who argued that the narrowing of the standard would eliminate important labor protections for workers and would make it more difficult to hold companies liable for violations by franchisees and contractors of minimum wage and overtime laws.

Brief History of the Joint Employer Rule

Although the Fair Labor Standards Act (“FLSA”) does not explicitly reference joint employment, the DOL has long recognized that workers may have multiple employers when employment by one employer is “not completely disassociated” from employment by the other employer.  The DOL has periodically updated this definition via informal guidance, most recently in 2014 and 2016, when it issued bulletin memorandums directing agency investigators to look past employers’ control over workers to the “economic realities” of their relationship.

The DOL rescinded those memorandums soon after President Trump took office in 2017 and proposed the first update to its formal joint employment regulations in decades, which was finalized in January 2020.  January’s final rule emphasized a company’s control over its workers, saying joint employment hinges on the division of powers to (1) hire and fire; (2) supervise and schedule; (3) set pay; and (4) maintain employment records.

The DOL’s attempt at narrowing the joint employer standard was seen as business-friendly and anti-labor, as labor advocates argued that employers who have franchise relationships or rely on subcontractors benefited from the new standard.  As a result, in February 2020, New York and 17 other states sued to block the rule, accusing the DOL of exposing workers to wage theft by narrowing its definition of joint employment further than the FLSA allows.

New York Federal Court Ruling

On September 8, 2020, Judge Gregory Woods of the U.S. District Court for the Southern District of New York issued a ruling striking down the majority of the new rule and agreeing with New York and the other 17 states who had challenged the rule.

According to Judge Woods, the new rule was “arbitrary and capricious” because the DOL failed to justify its departure from its prior interpretations of the joint employer rule or account for its costs to workers, which the states estimated at more than $1 billion annually. Judge Woods also ruled that the Trump administration’s changes to the joint employer doctrine were too narrow since they required a company to actually exercise control in the workplace instead of simply having the right to exercise control, and the DOL did not adequately explain why it disregarded evidence that narrowing its joint employment test would expose workers to wage theft.  Additionally, Judge Woods found that the new rule conflicted with the plain language of the FLSA because it ignored the statute’s broad definitions. 

As a result, Judge Woods vacated the portion of the rule applying to “vertical” employment relationships, in which workers for a staffing company or other intermediary are contracted to another entity.  However, he let stand the portion applying to “horizontal” relationships, in which a worker is employed by two “sufficiently associated” businesses.

Impact to Employers

It is likely that the DOL will appeal this ruling to the U.S. Court of Appeals for the Second Circuit, so this will not be the last time that a court opines on this issue.  In the meantime, however, there is no disputing that this ruling (especially if upheld on appeal) is a blow for the business community, which had urged the Trump administration to narrow the federal joint employment doctrine that had been expanded under the Obama administration. 

Due to this court ruling, employers now have less certainty about their relationship with one another in the joint employment context.  Thus, if any employers have revised their contracts with staffing agencies, subcontractors, or other intermediary employers since January, they should review those contracts to make sure they do not violate the joint employment standard that was in place prior to January.  And, until an appeal is ruled on or further guidance from the courts is issued, employers should adhere to the more expansive definition of joint employment when drafting contracts with staffing agencies or other subcontractors going forward.  

As always, we will keep you apprised of future developments in this ever-changing area of the law.

WARN Act Notices Deadline Approaching for Layoffs and Furloughs

Any employer that temporarily laid off or furloughed employees in the Spring of 2020 as a result of the COVID-19 pandemic and has not yet recalled those employees should be aware of an impending important deadline under the federal Worker Adjustment and Retraining Notification Act (“WARN Act”).

The WARN Act requires employers with 100 or more full time employees to provide at least sixty (60) calendar days written advance notice to their employees of an upcoming company-wide closing (referred to as a “plant closing”) or mass layoff.  While a “plant closing” is fairly self-explanatory, a mass layoff is defined as either (1)a layoff of 500 or more workers at a single site of employment during a 30-day period; or (2) a layoff of 50-499 workers, when these layoffs constitute 33% of the employer’s total active workforce at the single site of employment.

A WARN Act notice must be given to employees affected by a plant closing or mass layoff when those employees have suffered an “employment loss.”  While a temporary layoff or furlough lasting less than 6 months does not meet the definition of an “employment loss,” one that lasts longer than 6 months is indeed considered an “employment loss.”

At the outset of the COVID-19 pandemic in March 2020, many of our clients were considering a temporary layoff or furlough and as a result, they asked us whether they needed to provide their workers with a notice under the WARN Act.  At that point, since it was anticipated that any job losses as a result of the pandemic would last for less than 6 months, notice under the WARN Act would NOT have been necessary.  Now, however, it is rapidly approaching the 6-month mark for those employees that have been temporarily laid off or furloughed since March or April.  Thus, covered employers once again want to know whether a WARN Act notice is now required.

The short answer to that question is yes, a WARN Act notice likely will be required based on the Act’s definition of “employment loss.”  Specifically, under the Act, a temporary layoff or furlough without notice that is initially expected to last six months or less but later is extended beyond 6 months (which is likely the case for many U.S. employers) may violate the Act unless: (1) The extension is due to business circumstances not reasonably foreseeable at the time of the initial layoff; AND (2) Notice is given when it becomes reasonably foreseeable that the extension is required.  This means that an employer who previously announced and carried out a short-term layoff of 6 months or less and later extends the layoff or furlough beyond 6 months due to business circumstances not reasonably foreseeable at the time of the initial layoff (e.g., COVID-19) is required to give notice at the time it becomes reasonably foreseeable that the extension is required.  Given that it is now foreseeable that the layoff or furlough extension is necessary that would result in an employment loss exceeding six months, an employer’s failure to provide WARN notice to its affected employees (and other required recipients) could expose the employer to liability under the WARN Act.

It is important to note that there are several exceptions to the WARN Act’s 60-day notice requirement that may apply to COVID-19 related scenarios, including:

(1) the faltering company exception, which is when a company is actively seeking capital or business and reasonably in good faith believes that advance notice would preclude its ability to obtain such capital or business, and this new capital or business would allow the employer to avoid or postpone a shutdown for a reasonable period; and

(2) the unforeseeable business circumstances exception, which is when the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time that 60-day notice would have been required.

An employer must keep in mind, however, that even if one of these exceptions applies, a plant closing or mass layoff STILL requires notices to affected employees. That notice should include a statement as to why the employee did not receive the full 60-day notice, which in all likelihood would be due to COVID-19 related circumstances. 

The WARN Act is enforced by private legal action in the U.S. District Court for any district in which the violation is alleged to have occurred or in which the employer transacts business.  An employer’s violation of the WARN Act could result in substantial liability, including back pay and benefits for each day of violation to each aggrieved employee up to 60 days, and $500 in civil penalties for each day an employer fails to provide notice to a unit of local government.

In addition to the federal WARN Act, employers should keep in mind that approximately 23 states have their own state “mini-Warn Acts” that may impose more stringent requirements than Federal WARN.  These states include Alabama, California, Connecticut, Delaware, Georgia, Hawaii, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Washington, and Wisconsin.  Thus, if you have operations in any of those states, you must take into account your obligations under both the Federal WARN Act and your applicable state mini-WARN Act.

We are available to assist with questions about whether the WARN Act applies to your particular circumstances and/or to assist with providing WARN Act compliant notices when necessary. 

New COVID-19 Federal Paid Leave Requirements Signed into Law

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (the “Act”) to provide some relief to employees as a result of the Coronavirus (“COVID-19”).  This law will go into effect on April 1, 2020 and will expire on December 31, 2020.

Paid family leaveThe Act includes many provisions which apply to employers, such as paid sick leave for employees impacted by COVID-19 and those serving as caregivers for individuals with COVID-19.  Indeed, there are two provisions providing leave to employees forced to miss work because of the COVID-19 outbreak: an emergency expansion of the Family Medical Leave Act (FMLA) and a new federal paid sick leave law. The Act is the first federal law requiring private employers to provide paid sick leave to employees.  Importantly, not all private employers are covered, as the Act applies only to private employers with fewer than 500 employees.  A summary of the most relevant provisions of the emergency expansion of the FMLA and the paid sick law are as follows:

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