Coronavirus Crisis: Navigating The Maze Of The Families First Coronavirus Response Act

By Robin Foret, Of Counsel, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Purpose and Duration

On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (“FFCRA” or the “ACT”), an emergency measure in response to the Coronavirus pandemic. The Act became effective on April 1, 2020, and is scheduled to automatically expire on December 31, 2020. The Act is essentially comprised of two separate statutory provisions that are both enforced by the Department of Labor (“DOL”): (1) the Emergency Paid Sick Leave Act (“EPSLA”) that is enforced through the Fair Labor Standards Act (“FLSA”). See 29 C.F.R Part 826.20 et seq.; and (2) the Emergency Family Medical Leave Expansion Act (“EFMLEA”) that is enforced as an extension of the FMLA. See 29 U.S.C. § 2601. et seq.

  • City of Dallas Ordinance – Employers in the City of Dallas should be aware that in light of the COVID-19 crisis and the implementation of the FFCRA, the Dallas Sick Leave Law has at least for now, been suspended so that employers should comply with the Act instead.

Employers

An employer for purposes of this Act is defined as anyone who has at least one employee, but less that 500 employees. All such employers must comply with the Act, subject to some exceptions that may apply to employers with under 50 employees under certain circumstances explained below.

Employees

An eligible employee is any employee (full-time or part-time) who has worked for the employer at least 30 consecutive days in the last 60 days.

Posting Requirements

A Notice of Rights Poster, which can be obtained from the DOL website, must be posted at the employer’s place(s) of business. For employees exclusively working from home or who cannot otherwise be at the office or business location, the Poster should also be sent by e-mail or regular mail.

Work to Perform Requirement

It is important for employers to note that there must in fact be work for the employee claiming leave to perform in order for that employee to be able to obtain leave benefits under either the EPSLA or the EFMLEA. More specifically, if an employee is unable to work at the office or telework from home due to a “lack of work” at the company or the particular business location that they work, no paid sick leave because of a shut down or partial shutdown. In those instances, the employee is eligible for unemployment benefits until his or her work resumes. For example, if an employee worked at Starbucks and the particular location does not have a drive-thru, there may be not work to perform.

Telework

Telework means that a particular employee is able to work from home. Employees who are able to telework are not eligible for sick leave benefits unless another COVID-19 reason prevents them from working (examples: their own illness, a power outage). It is important to note that the FLSA “Continuous Workday Rule”, that requires an employer to count all hours between the first hour worked and the last hour worked during a workday, does not apply.  Instead, employees who telework are asked to keep track of their hours and breaks (for example: when they stop work to care for a child or assist with home schooling). This provides more flexibility during the crisis. See 29 C.F.R. 790.6.

Emergency Paid Sick Leave Act (“EPSLA”)

This statute allows an eligible employee to take up to 2 weeks (80 hours) of paid leave for the following six reasons related to COVID-19: (1) if the individual is subject to a federal, state or local quarantine or stay-at-home order; (2) the individual has been advised by a healthcare provider to self-quarantine; (3) the individual is experiencing COVID-19 symptoms and is currently seeking a diagnosis (including testing); (4) the individual is caring for someone who is subject to an order as stated in number 1 above or who has been advised to self-quarantine as stated in number 2 above; (5) the individual is caring for a son or daughter whose school or day care has closed and has no other caregiver (this includes children under 18 and those over 18 who are unable to care for themselves); or (6) the individual is experiencing a similar condition that has been specified by the Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the Secretary of Labor (this last reason for leave has not yet been developed and more guidance is expected).

  • How Much Leave is Allowed? – Full time employees (defined as those regularly scheduled to work 40 or more hours per week), are entitled to up to 2 weeks (80 hours) of paid leave at their normal rate of pay. Part time employees are entitled to the average hours that the employee worked during the last 2-week period (or, if their schedule varies, use the last 6 months, or the number of months they are at the job if less than 6 months, to calculate the average). An employer may alternatively use 2 times the number of hours that an employee is scheduled to work per week.
    • The calculation must include all days during the period, and days taken during that period for PTO or vacation may not be deducted.
  • How Much Pay is Allowed? – If the employee is seeking sick leave for one of the first 3 reasons listed above concerning his or her own condition, quarantine or stay-at-home order, the employee is entitled to his or her full daily rate up to a maximum of $511 per day, and $5,110 total. If the employee is seeking leave for any other reason listed above (reasons 4-6), the maximum daily amount is $200, with a total of $2,000 allowed.
  • What is a Self-Quarantine Order? – This requires advice from a healthcare provider that the employee has COVID-19, may have COVID-19, or is vulnerable to getting the disease, and, that because of one of these reasons the employee is precluded from working or teleworking.
  • What is Considered Has Symptoms / Seeking Diagnosis? – Symptoms ordinarily means those pursuant to the Centers for Disease Control (“CDC”), which includes a fever, dry cough, shortness of breath, etc.). This requires that the employee: be unable to work or telework, seek diagnosis and treatment, and must be advised to self-quarantine during that time.  Sick leave is allowed during the time that the employee is waiting for test results, regardless of the severity of the symptoms.  In the event that the healthcare provider states that the individual does not qualify for a test, then use the second reason – 14-day self-quarantine per CDC guidelines.
  • To Care for Someone Else – If the reasons for leave is to care for another (reason number 4 above) who is under an isolation order or under self-quarantine, the individual cared for must be an immediate family member, roommate, or similar person who has a relationship that creates the expectation of being cared for by the employee.
  • The “But For” Test – If the reason for the sick leave is either reasons 4 or 5 listed above (to care for another or because of the lack of child care), then leave requires that “but for” those conditions, the employee would be able to work or telework. Again, if there is no work for the employee to perform due to work stoppage or slow-down, paid leave is not permitted.

Emergency Family Medical Leave Expansion Act (“EFMLEA”)

The EFMLEA is an extension of the FMLA that again, applies to all employers with between 1 and 500 employees. It allows up to 12 weeks of leave (the first two of which are unpaid under this statute, but which may be paid under the EPSLA if those requirements are satisfied – 5th reason for sick leave discussed above). This provision permits partial pay in the event that, due to COVID-19 reasons, an employee must remain home to care for a son or daughter because of a school closure or the lack of daycare when there is no other caregiver available. This applies to children under 18, as well as to those over 18 who are unable to care for themselves.

  • How Much Pay is Allowed? – The employee is entitled to 2/3 of their regular rate of pay for up to 10 weeks at a maximum daily rate of $200, and $10,000 in total leave benefits. The maximum is $12,000 when combined with the 2 weeks of sick leave benefits.
  • Under 50 EmployeesPossible Exemption. Employers who have less than 50 employees may be eligible for exception to the expanded FMLA leave if they can show that providing such benefits will be detrimental to the viability of the business. In such cases, companies should evaluate and document any reasons they identity to not provide such leave, although they need not send documentation to the Department of Labor at this time.
  • Under 25 EmployeesReinstatement Rights. As with the FMLA, employees who take leave under the EFMLEA are entitled to be reinstated to their position or a substantially equivalent position when leave ends. However, if the business has less than 25 employees, it is exempted from providing job restoration following leave if: (1) the employee’s position no longer exists due to economic conditions; (2) the employer has made reasonable efforts to restore the employee to the same or equivalent position; and (3) the employer continues to make reasonable efforts to contact the employee for one-year if an equivalent position becomes available.
  • No Private Right of Action – Under the EFMLEA, an employee has no private right of action to file a complaint or lawsuit against an employer with less than 50 employees, because that employer was not subject to the FMLA before the expansion Act was created. Such employees must seek a remedy through the Department of Labor or other designated agency.

Required Documentation to Request Leave

An employee is required to provide his or her employer with documentation in support of Paid Sick Leave or Expanded Family and Medical Leave. That documentation must include: (1) the employee’s name; (2) the dates for which leave is requested; (3) the COVID-19 qualifying reason for leave, and (4) a statement representing that the employee is unable to work or telework because of the COVID-19 qualifying reason. Additional documentation may be required. For example, the name of the government entity that issued the quarantine or isolation order and/or the name of the healthcare provider who advised the employee to self-quarantine for COVID-19 reasons or to care for another individual under self-quarantine. An employee requesting leave to care for a child must state: (1) the name of the child; (2) the name of the school, daycare or child care provider unavailable due to COVID-19, and (3) a statement that no other suitable person is available to care the for child.

Penalties for Non-Compliance

The Paid Sick Leave statute is enforced under the FLSA. Failure to provide paid leave under this section is considered the same as failing to pay minimum wage benefits in violation of Section 6 of the FLSA, and those penalties apply (See 29 U.S.C. 216 and 217).  An employer may not discharge, discipline, retaliate or discriminate against an employee who takes leave under this section, or who files a complaint, proceeding or testifies in a proceeding. Violation of this section carries penalties that are stated in 29 U.S.C. 215(a)(3), 216 and 217. Moreover, the Secretary of Labor is permitted to verify compliance with this statute through periodic compliance checks. The Expanded Medical Leave Act is enforced in a similar manner as the FMLA.

  • The DOL will observe a temporary period of non-enforcement for the first 30 days after the Act takes effect, so long as the employer has acted “reasonably and in good faith to comply with the Act. Good faith exists when violations are remedied, the employee is made whole as soon as practicable by the employer, the violations are not willful, and, the employer sends a written commitment to the DOL that it will comply with the Act in the future.

The information contained in this article is not designed to address specific situations.  If you have questions concerning this topic, you should consult with legal counsel for advice on fact specific matters. 

Robin

Robin Foret is Of Counsel at Seltzer, Chadwick, Soefje & Ladik, PLLC, and is Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization.  Robin Foret is a frequent speaker and writer on employment law compliance topics.  She also provides training for companies to assist them comply with federal and state employment laws.  She can be reached at rforet@realclearcounsel.com or by telephone at (469) 626-5358.  You may also visit the website for more information about our law firm’s services at www.realclearcounsel.com

Preliminary Injunction Blocks Dallas Paid Sick Time Ordinance

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

As noted in an earlier blog post, the City of Dallas enacted a paid sick time ordinance which became effective on August 1, 2019 for private employers with six (6) or more employees. Under the Ordinance, no penalties were to be assessed, except for anti-retaliation violations, until April 1, 2020.

On June 30, 2019, a lawsuit was filed in the U.S. District Court for the Eastern District of Texas to stop the ordinance from taking effect. On March 30, 2020, two days before the ability of the City of Dallas to assess penalties, the Court issued a preliminary injunction blocking enforcement of the ordinance. The court’s reasoning was similar to that used by the Texas Third Court of Appeals in finding Austin’s paid sick time ordinance unconstitutional.

Since the ordinance has been in effect for eight months, many Dallas employers have already implemented sick leave policies in compliance with its prescriptions. Although likely welcomed by most Dallas employers, the preliminary injunction nevertheless presents the difficult question of whether to continue such policies, thereby incurring increased payroll costs, or to discontinue such policies, thereby risking poor employee morale or attrition.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

How Will Small Businesses Fare In Court Under Emergency Paid Leave Law?

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC

For small businesses with fewer than 50 employees, the Families First Coronavirus Response Act (“FFCRA”) includes two parts which suddenly present new, unanticipated and complex leave mandates.

Emergency Family & Medical Leave Expansion Act

The first part amends the Family & Medical Leave Act (“FMLA”) to include leave mandates applicable to school or place of care closures or child care provider unavailability for COVID-19-related reasons.

Small businesses with fewer than 50 employees are included in this mandate subject to the authority of the Department of Labor (“DOL”) “to issue regulations for good cause to exclude small businesses …”when the imposition of such a requirement would jeopardize the viability of the business as a going concern.”

Only the DOL may bring an enforcement action under this part of the FFCRA. In such an action, the DOL may seek not only actual damages, but also an additional amount equal to the amount of actual damages as liquidated damages to punish the employer.

Emergency Paid Sick Leave Act

This part prescribes 80 hours of paid sick leave for all employers with fewer than 500 employees. There is no exemption for small businesses with fewer than 50 employees.

As to the paid sick leave prescriptions, the FFCRA incorporates the penalty provisions of the Fair Labor Standards Act (“FLSA”) which allow for (1) civil actions by the DOL, (2)  civil actions by “any one or more employees on behalf of himself or themselves and other employees similarly situated”, (3) liquidated damages in an amount equal to the paid sick leave denied by the employer, and (4) attorney’s fees.

DOL Guidance

The Department of Labor (“DOL”) has provided (1) question & answer guidance to help small businesses understand these mandates, (2) a temporary rule interpreting the FFCRA, and (3) notice of its intent to delay full enforcement of the Act until April 18, 2020.

Included in this guidance is the small business exemption under the first part of the FFCRA. The DOL has stated a small business may claim the exemption if an authorized officer of the business has determined that:

  1. The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
  3. There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

Litigation Under Emergency Family & Medical Leave Expansion Act

Beyond the limited guidance provided by the DOL, little guidance is being offered to small businesses as to what to expect if litigation is brought by the DOL for a violation of the FMLA.

1. Who Has Burden of Proving Availability of Small Business Exemption?

To be sure, the DOL has provided guidance for small businesses in determination the availability of the small business exemption. But, who would have the burden of proving the availability of this exemption in court?

FLSA and the FMLA jurisprudence generally provides it is the employer’s burden to prove the availability of applicable exemptions. If cases under the FFCRA follow such precedent, the courts will look to small businesses to prove they fall within the exemption. A small business unable to meet its burden faces actual and liquidated damages as to each affected employee.

2. What Evidence Will Prove Availability of Small Business Exemption?

Interestingly, the DOL has stated the availability of the small business exemption hinges upon a “determination by an authorized officer of the business.” There is no similar FLSA or FMLA exemption tied to such a determination.

It will thus likely be up to the courts to determine, as a matter of first impression, what evidence is necessary as to the determination. Among the questions which will likely be addressed by the courts are: (1) Must a determination be in good faith? (2) Must a determination be based upon evidence? (3) What evidence must be considered in the determination? These questions will likely make the jeopardy inquiry much more complicated than the three-prong inquiry published by the DOL.

3. How Narrowly Will Small Business Exemption Be Construed?

The DOL guidance also leaves unanswered the question of how broadly or narrowly the small business exemption will be construed by the courts. For years, cases under the FLSA and FMLA have dictated that statutory exemptions under those statutes be narrowly construed. Several courts have thus held the burden of proving the availability of an exemption under the statutes is a substantial one.

If FFCRA cases follow FLSA and FMLA jurisprudence, they will likely require more than minimal evidence of jeopardy. Indeed, close questions as to jeopardy will likely be resolved in favor of the DOL.

Litigation Under Emergency Paid Sick Leave Act

Similarly, little guidance is being offered to small businesses as to what to expect if litigation is brought by the DOL or an employee for a violation of the paid leave prescriptions.

1. How Many Employees Can Join a Suit For Unpaid Sick Leave?

The only limitations on the number of employees which can join a suit under the FLSA are (1) the number of employees employed by the employer, (2) the number of employees who are shown to be similarly situated to the lead plaintiff, and (3) the statute of limitations.  Even for a small business, therefore, the stakes of litigation can be liability to multiple employees for unpaid sick leave and liquidated damages.

2. What Amount of Attorney’s Fees Can Be Awarded? 

The only limitation on the ability of a court to award attorney’s fees to a successful plaintiff is that the fees be reasonable. Indeed, in many FLSA collective actions, the attorneys fees awarded can exceed the combined liability of a defendant employer to all claimants.

3. Will Employers be Able to Avail Themselves of a Good Faith Defense?

The FLSA (29 U.S.C. 260) expressly allows an employer to avoid liquidated damages if the employer proves the act or omission which violated the Act was in good faith and the employer had reasonable grounds for believing the act or omission was not a violation. No such provision is expressly set forth in this part of the FFCRA.

Accordingly, a question which courts will be presented from the onset is whether a good faith defense exists for failure to provide paid sick leave. This question will be especially important for small businesses which are tackling federally mandated leave for the first time. If the good faith defense does not exist, the stakes of making wrong determinations become more serious for small businesses.

Takeaways

For small businesses, effective risk management under the FFCRA requires more than merely following DOL guidance. It requires understanding the stakes, expense and evidentiary realities of litigation. A small business which does not account for these realities risks unwanted litigation or, worse, a costly judgment or settlement.

So, how will small businesses fare in court under the FFCRA?  The answer depends upon how well they have been prepared by legal counsel for the prospect of  such litigation.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment law issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

What Employers Can Learn From The Coronavirus Suit Against Princess Cruises

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

On March 9, 2020, Ronald & Eva Weissberger sued Princess Cruise Lines, Ltd. in the U.S. District Court for the Central District of California. Mr. & Mrs. Weissberger are passengers aboard the Grand Princess which departed out of San Francisco on Feb. 21, 2020, and has been anchored off the coast of California since March 4, 2020 since March 4, 2020 as a result of an outbreak of COVID-19.

Two unique aspects of the suit are worthy noting.

First, the only causes of action actually plead are negligence and gross negligence (likely to invoke insurance coverage). The allegations nevertheless also support a claim of intentional misconduct. In this regard, the suit alleges: “Defendant PRINCESS chose to place profits over the safety of its passengers, crew and general public in continuing to operate business as usual, despite their knowledge of the risk of actual injury to Plaintiffs, who are elderly with underlying medical conditions.”

Second, neither of the plaintiffs has actually contracted COVID-19. Their alleged damages stem only from the actual risk of immediate exposure to the virus. The suit specifically alleges: “… Plaintiffs are suffering from emotional distress, are traumatized from the fear of developing COVID-19 as they sit minute after minute in their confined cabin on an infected vessel, and this emotional harm will continue to plague them.”

Frankly, the suit against Princess Cruises may have dubious merit. Still, the suit must now be defended, even if frivolous, at considerable expense. This expense, along with unwanted media attention, means the suit has settlement value. The plaintiffs likely had no problem finding an attorney willing to file a lawsuit under such circumstances.

Now that Coronavirus litigation has begun, other potential plaintiffs will soon join the party. They will see the suit against Princess Cruises as a model even as to persons who never contracted the virus.

So, why should employers be worried? After all, worker’s compensation insurance generally provides a shield from liability to employers not available to cruise lines. This shield can be especially formidable for injuries which are mental and emotional in nature. Still, there are circumstances in which this shield may not be available.

In Texas, for instance, an employer can opt out of worker’s compensation insurance coverage for its employees. A non-subscriber Texas employer, therefore, is not shielded from negligence claims, such as those asserted against Princess Cruises, for failure to provide a safe workplace.

In Illinois, moreover, the Worker’s Compensation Act provides the exclusive remedy only for “accidental injuries” that occur in the workplace. As recognized in 2018 by the U.S. District for the Northern District of Illinois in Phillips v. Exxon Mobil Corporation, there are circumstances in which a claim for intentional infliction of emotional distress is not barred by worker’s compensation insurance. An Illinois employer, therefore, is not shielded from claims, such as those effectively asserted against Princess Cruises, for intentional misconduct in the face of COVID-19.

As long as end-arounds exist to state worker’s compensation laws, employers should anticipate the tremendous incentive for employees exposed to the threat of contracting COVID-19 to exploit them. They will likely find no shortage of attorneys willing to try an end-around as to such a high-profile subject matter. Even if frivolous, a suit making claims, such as those asserted against Princess Cruises, will still need to be defended.

How can the risk of such a lawsuit be mitigated by employers? Follow the advice of the CDC on the webpage specifically developed or business and employers. This webpage can be accessed here. The more proactive an employer is in safeguarding the health of its employees, the lower the risk of an unfortunate lawsuit.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment law issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

Texas’ New Employment Laws

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

The Texas 86th Legislature recently concluded with the passage of several new employment laws affecting private employers.

Disclosure of Information Regarding Sexual Misconduct

Effective June 10, 2019, a new law provides limited immunity from civil liability for disclosing certain information to designated persons regarding sexual misconduct by an employee, volunteer, or independent contractor of a charitable organization.

Disclosures protected by the new law are those made in good faith as to information reasonably believed to be true. A person is not immune from civil or criminal liability for acting in bad faith or with a malicious purpose.

The only persons to whom protected information may be disclosed under the new law are current or prospective employers of the charitable organization’s employee, volunteer or independent contractor.

The disclosures which may be made under the new law include allegations of (1) sexual misconduct, (2) sexual abuse, (3) sexual harassment, or (4) a sexual offense under the Texas Penal Code. Child abuse may be disclosed only if previously reported to an appropriate agency under Section 261.103 of the Texas Family Code. An individual is not immune from civil or criminal liability for reporting the individual’s own sexual misconduct.

Civil immunity under the new law extends to charitable organizations, and employees, volunteers and independent contractors of charitable organizations.

Jury and Grand Jury Service

Currently, Section 122.001 of the Texas Civil Practice & Remedies Code provides only that “[a] private employer may not terminate the employment of a permanent employee because the employee serves as a juror.”

A new law, which becomes effective on September 1, 2019, amends Section 122.001 to state that “an employer may not discharge, threaten to discharge, intimidate, or coerce any permanent employee because the employee serves as a juror, or for the employee’s attendance or scheduled attendance in connection with the service, in any court in the United States.”

Another new law, which becomes effective on September 1, 2019, amends Section 122.001 to include “grand jury” service.

Report of Child Abuse or Neglect

Currently, Section 261.110 of the Texas Family Code states that an employer may not suspend or terminate the employment of, or otherwise discriminate against, a person who is a professional and who in good faith … reports child abuse or neglect.”

A new law, which becomes effective on September 1, 2019, extends the prohibition of Section 261.110 to any adverse employment action. “Adverse employment action” is defined as “an employee’s compensation, promotion, transfer, work assignment, or performance evaluation, or any other employment action that would dissuade a reasonable employee from making or supporting a report of abuse or neglect…”

The new law also now enables a claimant to sue for injunctive relief.

Age Discrimination in Training

Currently, Section 21.054(b) of the Texas Labor Code limits the prohibition against age discrimination in certain employment training programs to “an individual who is at least 40 years of age but younger than 56 years of age.”

A new law, which becomes effective on September 1, 2019, repeals the age cap.

Minimum Wage for Disabled Workers

Section 14(c) of the Fair Labor Standards Act authorizes employers, after receiving a certificate from the Wage & Hour Division of the U.S. Department of Labor, to pay sub-minimum wages to disabled workers.

A new Texas law, which becomes effective on September 1, 2019, sets forth a mechanism for increasing the wages paid by community rehabilitation programs to the federal minimum wage not later than September 1, 2022.

Competition & Trade Secrets

An amendment to the Texas Citizens Participation Act clarifies that, effective September 1, 2019, the Act is not applicable to a legal action arising from an officer-director, employer-employee, or independent contractor relationship that (1) seeks recovery for misappropriation of trade secrets or corporate opportunities, or (2) seeks to enforce a non-disparagement agreement or a covenant not to compete.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Unconscious Bias In The Workplace

The Summer 2018 Edition of Professional Liability Defense Quarterly, published by the Professional Liability Defense Federation (PLDF), features an article by Robert G. Chadwick, Jr., entitled “Unconscious Bias In The Workplace.”

READ ARTICLE

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

What San Antonio Employers Need To Know About New Paid Sick Time Ordinance

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

[UPDATE: The San Antonio City Council agreed to delay enforcement of the paid sick time ordinance until December 1, 2019 while courts weigh in on its legality]

On Thursday, August 16, 2018, San Antonio became the second Texas municipality (Austin) to enact a paid sick time ordinance applicable to private employers. There is no corresponding Texas state law which mandates paid sick time in the private sector.

What Employers Are Covered By The Ordinance?

The ordinance applies to any “person, company, corporation, firm partnership, labor organization, non-profit organization or association that pays an employee to perform work for an employer and exercises control over the employee’s wages, hours and working conditions.”  The ordinance does not limit its coverage to employers with a minimum number of employees.

The ordinance does not apply to (1) the United States; (2) a corporation wholly owned by the government of the United States; (3) the state or a state agency; or (4) the City of San Antonio or any other political subdivision of the state, or other agency that cannot legally be regulated by City ordinance.

What Employees Are Covered By The Ordinance?

The ordinance covers any “individual who performs at least 80 hours of work for pay within the City of San Antonio in a year for an employer, including work performed through the services of a temporary or employment agency.” The ordinance does not apply to independent contractors or unpaid interns.

How Much Paid Sick Time Is Mandated By The Ordinance?

An employer must grant one hour of earned sick time for every 30 hours worked for the employer. Earned sick time is available to an employee as soon as it is accrued. Earned sick time accrues only in hourly increments.

The ordinance does not affect employer policies which allow an employee to donate unused accrued sick time to another employee.

Are There Any Caps to Paid Sick Time Mandated By The Ordinance?

An employee of an employer with 15 or fewer employees , excluding family members, can accrue up to 48 hours of earned sick time in a calendar year. An employee of a larger employer can accrue up to 64 hours of earned sick time in a calendar year. All available earned sick time up to the applicable limit shall be carried over to the following year.
An employer is not required to allow use of earned sick time by an employee for more than 8 calendar days in a calendar year.

For What Absences Can Paid Sick Time Be Used By An Employee?

An employee is entitled to available paid sick time if the employee makes a timely request for used of earned sick time before the employee’s scheduled work time. There is an exception for unforeseeable absences.

Available paid sick time can be requested by an employee for an absence caused by:

  1. the “employee’s physical or mental illness or injury, preventative medical or health care or health condition”;
  2. the “employee’s need to care for a family member’s physical or mental illness, preventative medical or health care, injury, or health condition”; or
  3. the “employee’s or their family member’s need to seek medical attention, seek relocation, obtain services of a victim services organization, or participate in legal or court ordered action related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee or employee’s family member.”

The term “family member” is defined as an employee’s “spouse, child, parent, or any other individual related by blood or whose close association with the employee is the equivalent of a family relationship.”

Can an Employer Require Verification Before Paying For Sick Time?

It depends. An employer may adopt reasonable verification procedures to establish that an employee’s request for earned sick time for more than three consecutive work days is for a qualifying absence. The ordinance makes no mention of absences of other durations.

How Is Paid Sick Time Calculated?

The employer shall pay earned sick time in an amount equal to what the employee would have earned if the employee had worked the scheduled work time, exclusive of any overtime premium, tips, or commissions, but no less than the state minimum wage.

What Does The Ordinance Proscribe?

An employer may not:

  1. require “an employee to find a replacement to cover the hours of earned paid sick time as a condition of using earned paid sick time”;
  2. erase earned paid sick time upon “an employee’s transfer to a different facility, location, division, or job position with the same employer”;
  3. “transfer, demote, discharge, suspend, reduce hours, or directly threaten these actions against an employee because that employee requests or uses earned sick time, reports or attempts to report a violation of [the ordinance], participates or attempts to participate in an investigation or proceeding under [the ordinance], or otherwise exercises any rights afforded by [the ordinance]; or
  4. “adopt verification procedures that would require an employee to explain the nature of domestic abuse, sexual assault, stalking, illness, injury, health condition or other health need when making a request for earned paid sick time.

What Records Are Mandated of Employers By The Ordinance?

On at least a monthly basis, an employer must provide electronically or in writing to each employee a statement showing the amount of the employee’s available earned paid sick time.

An employer that provides an employee handbook to its employees must include therein a notice of employee rights and remedies under the ordinance.

Each employer must display a sign in an conspicuous place or places where employee notices are customarily posted.

Does The Ordinance Provide Employees With A Private Right Of Action?

No. For violations, the ordinance only provides for a civil penalty assessed by the City.

How Is The Ordinance Enforced?

The ordinance is enforced by the Director of the San Antonio Metropolitan Health District (“District”). A complaint alleging a violation must be filed with the District by or on behalf of an aggrieved employee within two years from the date of the violation.

What Is The Civil Penalty For Violation Of The Ordinance?

No civil penalty for a substantive violation may be assessed prior to April 1, 2020. Thereafter, an employer which fails to cease a violation by the end of the 10th business day after the employer receives notice of the violation by the District is liability to the City for a civil penalty of up to $500 for that violation.

Civil penalties of $500 per violation for retaliation, however, can be assessed on and after the applicable effective date.

Are Any Affirmative Defenses Available To Employers Under The Ordinance?

The ordinance does not expressly provide any affirmative defense for a failure to pay an employee earned paid sick time. Presumably, however, the District will consider any lawful reason for any adverse employment action taken against an employee who has (1) requested or used earned sick time, (2) reported a violation of the ordinance, or (3) participated in an administrative proceeding under the ordinance.

What is the Effective Date of the Ordinance?

The ordinance is effective January 1, 2019.  The anti-retaliation provisions are enforceable on the effective date. For employers with less than six employees, the other provisions of the ordinance are not effective until August 1, 2021. For all other employers, the other provisions of the ordinance are effective on August 1, 2019.

What Must San Antonio Employers Be Doing Now?

Depending on the applicable effective date, San Antonio employers have time to develop policies and procedures to conform to the standards set forth in the ordinance. For planning decisions which must be made long before August 1, 2019, however, larger employers must be cognizant of the unique requirements which will soon be applicable to employees working within the city limits of San Antonio.

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Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Should Employers Include “No Rehire” Clauses In Separation Agreements?

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

When terminating an employment relationship, a separation agreement can be a prudent strategy for managing the risk of a subsequent lawsuit. Such an agreement typically offers monetary or other consideration in exchange for a waiver or release of all claims, including claims of harassment and discrimination.

A waiver or release, however, generally cannot lawfully discharge future claims, including claims based upon denials of applications for re-employment. To manage this risk, it is common for separation agreements to include “no rehire” clauses. Such a clause can include an agreement by a former employee to (1) refrain from applying for or seeking employment, reemployment or reinstatement, (2) waive any  right to such employment, reemployment or reinstatement, or (3) termination of employment if rehired.

Recent developments have nevertheless raised two important questions for employers as to “no rehire” clauses: (1) Are such clauses legal? (2) Should employers include such clauses in separation agreements?

Are “No Rehire” Clauses Legal?

For at least a decade, the Equal Employment Opportunity Commission (“EEOC”) has warned that “no rehire” clauses can be viewed as retaliation against employees who come forward with claims of harassment or discrimination. Despite this warning, federal case law has routinely upheld such clauses. See Jencks v. Modern Woodmen of America, 479 F.23d 1261 (10th Cir. 2007)(employee’s waiver of any right to reemployment or reinstatement was legitimate nondiscriminatory reason for employer’s refusal to subsequently consider former employee for sales position).

Not all states, however, view “no rehire” clauses favorably.

Effective July 1, 2018, a new Vermont law provides: “An agreement to settle a claim of sexual harassment shall not prohibit, prevent, or otherwise restrict the employee from working for the employer or any parent company, subsidiary, division, or affiliate of the employer.” Such a clause is rendered “void and unenforceable” by the new Vermont law.

Section 16600 of California’s Business & Professions Code states, subject to certain exceptions: “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” On July 24, 2018, the Ninth Circuit in Golden v. California Emergency Physicians Medical Group addressed the legality under Section 16600 of a provision of a settlement agreement whereby a physician waived “any and all rights to employment with CEP or at any facility that CEP may own or with which it may contract in the future.” The Court held the clause survived to the extent it prevented the physician from working at facilities owned or operated by CEP, but failed to the extent it (1) prevented the physician from working for employers that have contracts with CEP, or (2) permitted CEP to terminate the physician from existing employment in facilities not owned by CEP.

Section 16600 of California’s Business & Professions Code is not dissimilar to the laws of other states.  It is safe to assume, therefore, that other states have taken notice of the broad interpretation by the Ninth Circuit of Section 16600.

Should Employers Include “No Rehire” Clauses in Separation Agreements?

The risk of omitting a “no rehire” clause from a separation agreement is not limited to a single failure to hire claim from a former employee. A disgruntled former employee can conceivably file a new claim as to each open position for which an application is denied.

Certainly, the new Vermont law provides few options for Vermont employers. Otherwise, the risks currently presented under state law, and to a lesser extent federal law, do not yet dictate the abandonment of “no rehire” clauses.  What these risks do mandate is that broad and overreaching clauses be avoided in favor of skillfully and carefully drafted clauses.

So, to answer the question presented by this article’s headline, most employers should include “no rehire” clauses in their separation agreements. What form these clauses should take depends upon the advice of experienced legal counsel.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

What Texas Employers Need To Know About State’s New Knife & Sword Law!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC.

Prior to September 1, 2017, a person committed a criminal offense in Texas if he or she “intentionally, knowingly, or recklessly” carried on or about his or her person an “illegal knife” anywhere other than “(1) the person’s own premises or premises under premises under the person’s control, or (2) inside of or directly en route to a motor vehicle or watercraft that is owned by the person or is under the person’s control.” An “illegal knife” was defined as including “a knife with a blade over five and on-half inches”, a “hand instrument designed to cut or stab another by being thrown”, a “dagger, including but not limited to a dirk, stiletto, and poniard”, a “bowie knife”, a “sword”, or a “spear.”

Except as to business owners, therefore, it was generally unlawful under the old law for an employee to carry an “illegal knife” onto an employer’s premises. Except within the confines of an automobile being driven by the employee, it was also generally unlawful for an employee to carry an “illegal knife” during work hours away from the employer’s premises.

Effective September 1, 2017, however, there is no such thing in Texas as an “illegal knife.” There is now what is called a “location-restricted knife”, which is defined as a “knife with a blade over five and one-half inches.”  It is unlawful for a person younger than 18 years of age to be in possession of such a knife unless he or she is “(1) on the person’s own premises or premises under premises under the person’s control, (2) inside of or directly en route to a motor vehicle or watercraft that is owned by the person or is under the person’s control, or (3) under the direct supervision of  a parent or legal guardian.”

it is also unlawful for any person to possess a “location-restricted” knife “on the physical premises of a school or educational institution, any grounds or building on which an activity sponsored by the school or education institution is being conducted, or a passenger transportation vehicle or a school or educational institution”, “on the premises of any government court or offices”, “on the premises of a racetrack”, “in a secured area of an airport”, in certain bars, “on the premises where a high school, collegiate or professional sporting event is taking place”, in a “correctional facility”, hospitals, in “an amusement park”, or “on the premises of a church, synagogue or other established place of worship.”

Except as to minors and places enumerated in the new law, therefore, it is now generally lawful for an employee to carry any size or type of knife, sword or spear anywhere during working hours whether at or away from the employers’ premises.  Such carry can be open or concealed.

Accordingly, if a Texas employer wants to prohibit knives, swords or spears at work, it must undertake to do so on its own with the publication and enforcement of an applicable policy. Otherwise, an employee may simply follow the new law.  Such a policy should differentiate bladed instruments which are permissible at work from bladed instruments which are impermissible at work.  That way, an employee will understand that such instruments as letter openers, kitchen knives, and Swiss Army knives are not prohibited.