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Non-Disparagement Clauses Are Retroactively Voided, NLRB’s Top Cop Clarifies

The general counsel of the National Labor Relations Board issued a memo this week clarifying one of the biggest open questions after the NLRB rules broad non-disparagement clauses were illegal.

The general counsel of the National Labor Relations Board issued a clarifying memo on Wednesday regarding the “scope” of a February ruling by the federal agency’s board that said employers cannot include blanket non-disparagement clauses in their severance packages, nor demand laid-off employees keep secret the terms of their exit agreements.

Such provisions have become increasingly common in recent years, muzzling employees and otherwise stopping them from speaking up about working conditions by dangling a few weeks or months of pay in front of them at the exact moment they are losing their job.

In the memo sent to regional offices, General Counsel Jennifer Abruzzo addressed what had been one of the largest questions that resulted from the ruling: Does it retroactively void broad non-disparagement agreements that were signed prior to the February ruling? Abruzzo wrote that the decision does, in fact, have “retroactive application,” meaning that already-signed and “overly broad” non-disparagement clauses are no longer considered valid by the NLRB.

Abruzzo is charged with prosecuting cases against employers who break the rules. She said an unlawful clause would likely not invalidate an entire severance agreement, as the regional offices tend to “seek to have [the unlawful portions] voided out as opposed to the entire agreement.”

However, employers who attempt to continue to enforce illegal severance clauses could face trouble from the NLRB. While the NLRB typically has a six-month statute of limitations for labor violations, businesses who attempt to enforce illegal parts of an older severance agreement would be committing a contemporary “violation” and subject to enforcement, Abruzzo said.

Additionally, Abruzzo provided clarification around what non-disparagement and confidentiality clauses may still be considered legal. The provisions, she said, must be “narrowly-tailored.” In the case of confidentiality, the clause must serve to keep proprietary trade information secret “for a period of time based on legitimate business justifications may be considered lawful,” but must not have “a chilling effect that precludes employees from assisting others” or communicating with the media, a union, or other third parties.

With regards to non-disparagement, Abruzzo similarly said the provision must not only be both “narrowly-tailored” and “justified,” but limited to statements by an employee that fit the legal definition of defamation, meaning they are purposefully and maliciously untrue.

In February, the NLRB ruled that in a case regarding a Michigan hospital, laid-off workers had been asked to sign unnecessarily burdensome severance contracts that violated their labor rights. The decision overturned a pair of Trump-era decisions which had temporarily upended the previous “longstanding precedent” by saying that more broad non-disparagement and confidentiality clauses were lawful.

The NLRB this year said that the Trump era decisions were wrong and that the laid-off hospital employees had been asked to “overly broad non-disparagement and confidentiality clauses” that unnecessarily restrained their NLRB rights. The decisions led to questions about what the decision meant for people who signed similar non-disclosure agreements in the interim.

Read more from Maxwell Strachan.

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AB 1041: CFRA and Paid Sick Leaves Expanded to Cover Employee’s Care for a “Designated Person”

Expanding family leave to include designated individual that does not have to be family.

AB 1041 amends the California Family Rights Act (“CFRA”) and the Healthy Workplaces, Healthy Families Act of 2014, also known as the Paid Sick Leave Law, to permit eligible employees of covered employers to take leave to care for a “designated person” who does not have to be a family member. Rather, a “designated person” can be any individual related to the employee by blood or whose association with the employee is the equivalent of a family relationship. The designated person may be identified by the employee at the time the employee requests the leave. An employer may limit an employee to one designated person per 12-month period.

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AB 257: Council to Regulate Working Conditions for Fast Food Workers

Burger King

AB 257: Council to regulate working conditions for fast food workers; on hold pending litigation and, potentially, a referendum

With AB 257, the Legislature will establish a new and powerful Fast-Food Council, the first of its kind in the State. Sponsored by the Service Employees International Union (“SEIU”) and inspired by its “Fight for $15 and a Union” movement, the Council will be empowered to regulate wages, hours, and working conditions of California’s fast-food employees, a population of workers historically subjected to hazardous working conditions and shamefully low wages.

The Fast-Food Council will be made up of 10 members, appointed by the Governor, Speaker of the Assembly, and the Senate Rules Committee, and will dictate working conditions for employees of chains with at least 100 outlets nationwide. The Council is expected to raise fast food worker wage rates as high as $22 an hour.

Unsurprisingly, the Chamber of Commerce has made destroying the bill a priority. As this article was going to print, a judge temporarily blocked the State from implementing the law as the result of a lawsuit filed by a coalition of giant corporate chain restaurants, which is seeking a referendum on the November 2024 ballot in a bid to overturn the law. “If and when the referendum challenging AB 257 qualifies for the ballot, the law will be put on hold,” said Katrina Hagen, Director of the Department of Industrial Relations.

None of this corporate chicanery would be possible but for the Supreme Court’s obsequious decision in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) (holding that the Free Speech Clause of the First Amendment prohibits the government from restricting independent expenditures for political campaigns by corporations). Of course, while the Founders were well aware of the existence of various types of business enterprises (joint-stock companies, corporations such as the East India Company, which was incorporated in 1600, and the like), the Founders did not provide for any corporate rights in the Constitution or the Bill of Rights. Rather, the Founders understood that, to the extent that corporations had any type of personhood, it was a legal fiction limited to a courtroom. But we digress.

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SB 1162: Expanded Pay Data Reporting and Mandatory Pay Scale Disclosures

If you feel you were paid less because of gender, national origin, or race contact Helmer Friedman LLP.

Effective January 1, 2018, California’s Equal Pay Act prohibited employers, with one exception, from seeking applicants’ salary history information and required employers to supply pay scales upon the request of an applicant.

SB 1162 expands upon these pay transparency measures and counters workplace discrimination by requiring employers of 15 or more employees to: (i) include the pay scale for a position in any job posting; (ii) provide pay scale information to current employees and to applicants upon reasonable request; and (iii) maintain employee records, including job titles and wage rate histories, through the term of each employee’s employment and for 3 years after their employment has ended.

SB 1162 also expands covered employers’ pay data reporting obligations. Since 2021, California law has required private employers who have 100 or more employees and who must file a federal EEO-1 to file an annual pay data report with the California Civil Rights Department (formerly the California Department of Fair Employment and Housing) on or before March 31 of each year. SB 1162 broadens these obligations in several significant ways.

First, the bill expands who must file a pay data report so that all private employers with 100 or more employees will be required to file a pay data report regardless of whether they also must file a federal EEO-1, and private employers with 100 or more employees hired through labor contractors will be required to submit a separate pay data report regarding these contracted workers.

Second, in addition to demographic and pay band information, employers’ pay data reports will also need to identify, within each job category, the median and mean pay rate for each combination of race, ethnicity, and sex.

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SB 1126: CalSavers Retirement Planning Expansion

Age Discrimination lawyers in Los Angeles safeguard your rights to a workplace free from age discrimination.

 

SB1126 expands the CalSavers Retirement Savings Trust Act to define an “eligible employer” as a person or entity engaged in a business, industry, profession, trade or other enterprise in the State that has at least one eligible employee, excluding certain government entities and entities employing only their business owners. The Act previously covered only employers with 5 or more employees. Eligible employers must establish or participate in a payroll deposit retirement savings arrangement prescribed by the Act.

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SB 951: Paid Family Leave Wage Replacement

Paid Family Leave and State Disability Insurance covers 90 percent of wages for leave.

SB 951: Paid family leave wage replacement beginning January 1, 2025

According to the World Policy Center, the United States is one of only 2 nations in the world without paid family leave, sharing this disgraceful distinction with Papua New Guinea, a nation with a population smaller than Los Angeles County. Since its enactment in 2002, California’s Paid Family Leave (“PFL”) program has been a model for a country woefully behind the rest of the world in terms of paid leave. Yet, with skyrocketing costs of living in the Golden State, countless workers living paycheck to paycheck, and a paid leave program that covered only a little more than half of workers’ regular wages, many Californians still could not afford to take time off. The California Budget and Policy Center estimates that high and middle-wage workers have used the State’s Paid Family Leave program at a rate 4 times the rate of lower-wage workers. Without adequate wage replacement, lower-wage workers, who are disproportionately Latinx, Black, and female-identifying, have put off seeking urgent medical care, lost precious time with newborn and adopted children, and left ailing loved ones home alone to care for themselves.

SB 951 has the potential to make paid family medical leave a reality for all California workers. Starting January 1, 2025, employees who earn 70 percent or less than the average wage in California will be eligible to receive 90 percent of their wages through the Paid Family Leave and State Disability Insurance (“SDI”) programs. Those who make more will receive 70 percent of their pay. With this expansion, California continues to blaze the trail towards fully paid family medical leave.

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SB 1044: Preventing Retaliation During Emergency Condition

Workers injured during natural disasters because employers refused to allow them to seek safety.

As climate-related disasters increase in intensity and frequency, employees are regularly expected (and sometimes required) to place their lives in danger by continuing to work through these calamities. For example, during recent tornadoes in Illinois, Amazon not only refused to let workers leave a warehouse in the expected route of a tornado but also refused to allow its workers to access communications devices to track the dangerous conditions. The warehouse was destroyed, and several workers were killed. Similarly, during the Getty Fire, domestic workers and gardeners were required to continue working in Los Angeles evacuation zones. Agricultural workers in Sonoma County were required to continue picking produce during the Atlas/Tubbs fires. There were landscapers and housekeepers, along with children, among the 23 lost and 167 injured in the 2018 Montecito debris flow.

SB 1044 was designed to enhance workers’ protections during natural disasters by requiring employers to allow workers to have access to their cell phones or other communications devices during these emergencies to seek emergency assistance, assess the safety of the situation, or communicate with a person to confirm their safety and by permitting workers to leave a workplace or worksite within an area affected by an “emergency condition” if they feel that they must do so for their safety.

“Emergency condition” is defined to mean the existence of either of the following: (i) conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act; or (ii) an order to evacuate a workplace, a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act. SB 1044 specifically excludes a health pandemic from the definition of “emergency condition.”

Sadly, the California Chamber of Commerce designated this common-sense prophylactic as a “job killer,” as it routinely does with laws designed to protect employees and consumers, and many Republicans voted against it.

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SB 523: The Contraceptive Equity Act of 2022

Helping Employees Recover and Enforcing Employment Laws Helmer Friedman LLP.

On June 24, 2022, the radical, activist, and far-right-wing conservatives on the U.S. Supreme Court did something that even the über conservative Lochner-era Supreme Court didn’t do. The (Trump) Court, in a 5-4 decision authored by Justice Samuel Alito Jr. in Dobbs v. Jackson Women’s Health Organization, 142 S.Ct. 2228 (2022), reversed a pair of cases that Justice Antonin Scalia’s acolyte, Judge Michael Luttig, had called “super stare decisis” – Roe v. Wade, 410 U.S. 113 (1973) and Planned Parenthood of Southeastern Pennsylvania. v. Casey, 505 U.S. 833 (1992). In doing so, the five radical right-wing Justices took away a fundamental constitutional right (the right to choose) for the first time in U.S. history. Perhaps most surprising about the Dobbs decision is that the right to choose was cavalierly stolen from the Country even though it was repeatedly affirmed and re-affirmed year after year for nearly 50 years in opinions written by and/or concurred in by 16 Justices – 10 different Republican Justices nominated by 5 different Republican Presidents and six Democratic Justices.

Justice Clarence Thomas, in his concurring opinion, advocated for the Supreme Court to go even further toward a dystopian world straight out of The Handmaid’s Tale and reverse all of the Court’s prior substantive due process decisions, including Griswold v. Connecticut, 381 U.S. 479 (1965), which held that the right to privacy protected against state restrictions on contraception.

Governor Gavin Newsom signs SB 523 Contraceptive Equity Act.

In response to both the horrific Dobbs decision and threats by Republicans to take away other reproductive rights Americans have taken for granted for decades, Governor Newsom signed SB 523, the Contraceptive Equity Act of 2022, into law on September 27, 2022. This law amends California’s Fair Employment and Housing Act (“FEHA”) to add “reproductive health decision-making” as a legally protected category. “Reproductive health decision-making” is defined to include, but not be limited to, “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”

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Presidential Memorandum on Supporting Access to Leave for Federal Employees

Your workplace should be free of discrimination and harassment. Contact the attorneys of Helmer Friedman LLP for information.

On February 2, 2023, the Biden-Harris Administration, to mark the then-upcoming 30th anniversary of the Family and Medical Leave Act (“FMLA”), announced a series of new actions to support and advance America’s federal public employees. In this regard, President Biden issued a Memorandum For The Heads Of Executive Departments And Agencies, strongly encouraging those heads to provide access to leave for Federal employees when they need it, including during their first year of service, to ensure employees are able to bond with a new child, care for a family member with a serious health condition, address their own serious health condition, help manage family affairs when a family member is called to active duty, or grieve after the death of a family member. President Biden further directed the Office of Personnel Management is further directed to provide recommendations regarding “safe leave” to support Federal employees’ access to paid leave and leave without pay for purposes related to seeking safety and recovering from domestic violence, dating violence, sexual assault, or stalking. Those may include obtaining medical treatment, seeking assistance from organizations that provide services to survivors, seeking relocation, and taking related legal action.

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FTC Proposes Rule to Ban Non-compete Clauses

For decades, employers have used non-competition agreements to not only artificially lower the salaries of their employees but also to render those employees into something akin to indentured servitude.

Captured ideas On January 5, 2023, the Federal Trade Commission proposed a new rule – accessible at https://www.ftc.gov/legal-library/browse/federal-register-notices/non-compete-clause-rulemaking — that would ban employers from imposing non-competes on their workers, a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. The proposed rule provides that: “It is an unfair method of competition for an employer to enter into or attempt to enter into a non-compete clause with a worker; maintain with a worker a non-compete clause; or represent to a worker that the worker is subject to a non-compete clause where the employer has no good faith basis to believe that the worker is subject to an enforceable non-compete clause.” The proposed rule would also require the rescission of all non-competition agreements entered into before the date the new rule takes effect.

By stopping these unfair non-competition agreements, the FTC estimates not only that wages might be increased by nearly $300 billion per year but also that expanded career opportunities would abound for about 30 million Americans.