In the first session of 2024's Law & the Workplace webinars, labor and employment attorney
For labor and employment law, 2023 was a year of rapid and aggressive change.
The
State and federal courts also handed down decisions that change how employers handle legal issues in the workplace.
1. Individual Liability Under the Iowa Civil Rights Act
A 2023
In 1999, Vivian v. Madison, 601 N.W.2d 872, 872 (
In 2021, Rumsey v.
In a suit alleging a racially hostile work environment, an employee attempted to hold a coworker liable.
The decision contains three elements of importance to employers:
-
It recognized individual liability under the ICRA only for allegedly discriminatory decisions resulting in adverse action.
- Hostile environments are alleged to be maintained by the employer. Liability based on coworker conduct exists only when the employer knew or reasonably should have known of conduct and failed to take prompt appropriate remedial action.
- Coworkers do not have the ability to effectuate the hostile environment.
- What's the impact on the employer in light of their nature, size, and operating costs?
- Train managers and HR staff on how to address requests.
- Adjust policies or written materials, if needed.
- Provide written reasoning for denying a religious accommodation request.
- Document everything.
- subject to joint and several liability for unfair labor practices committed by the other employer;
- subject to labor picketing that would otherwise be unlawful.
- proprietary or ownership interest in their work;
- control over important business decisions, such as the scheduling of performance; the hiring, selection, and assignment of employees; the purchase and use of equipment; and the commitment of capital.
- Uses an "economic reality" test to evaluate whether a worker is in business for themselves or is economically dependent on an employer.
- The worker's ability to generate profit or loss based on how the work is performed.
- The duration of the working relationship between the worker and alleged employer.
- Whether the work in question is part of an "integrated unit" of production.
- Investments by worker and potential employer.
- Think about who will need to be converted to nonexempt status.
- Ensure exempt employees meet the duties test.
- Develop a training plan for managers and newly nonexempt employees regarding scheduled hours and tracking time.
- Noncompete agreements. If the
FTC does not invalidate non-compete agreements, theNLRB likely will. An exception to protect trade secrets likely will be very narrow. - Greater federal enforcement of child labor laws in
Iowa . As noted,Iowa's looser child labor laws have generated attention. - Compensatory damages in unfair labor practices cases. The
NLRB hasn't awarded damages yet but will likely start. - Attempts to nullify class and collective action waivers in arbitration agreements by the DOL and
NLRB . U.S. Supreme Court will overturn the "Chevron deference." The decision would reduce the deference courts apply to federal agencies' interpretation of their statutes.OSHA will begin referring significant workplace safety matters to federal and state criminal prosecutors.OSHA has been building a database of willful and repeat offenders.- Revised race/ethnicity reporting.
The Equal Employment Opportunity Commission (EEOC) and theOffice of Federal Contract Compliance Programs (OFCCP) may include a category for those of Middle Eastern descent. They are currently categorized and reported as White/Caucasian.
2. Iowa Child Labor Laws
The
Many of the state child labor law changes are inconsistent with federal regulations. The best practice for employers is to follow the stricter federal law.
The DOL will place more scrutiny on enforcement in
Also, it is likely the DOL will "shop" for other potential wage and hour violations as it conducts its child labor investigations.
3. Higher Employer Hurdle for Denying Religious Accommodations
In Groff v. DeJoy,
Title VII, the point of dispute in the Groff case, was interpreted up to that point to require only a de minimus standard. In other words, only a slight increase in cost was enough for an employer to deny a religious accommodation request. The
The decision said that federal antidiscrimination law requires an employer to show that "the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business."
Courts will now apply an undue burden standard that considers:
-
What's the particular accommodation?
Employers' best practices might be to:
-
Mirror the Americans with Disabilities Act (ADA) accommodation process.
4. New Rule for Determining Interference with Employees' Section 7 Rights
Section 7 of the National Labor Relations Act (NLRA) allows employees to engage in concerted activity in connection with their terms and conditions of employment.
In
Work rules may be unlawful when they indirectly "chill" Section 7
activities. Under the
An employer may rebut the presumption only by proving both "[1] that the rule advances a legitimate and substantial business interest and [2] that the employer is unable to advance that interest with a more narrowly tailored rule." Id. at 10. While the first element provides an evidentiary avenue for an employer to establish its justification for the rule, and may not be a heavy burden to carry, the second element by definition applies a strict scrutiny review that will likely make it difficult for any rule, no matter how carefully written, to survive.
Under the previous standard, the
Yet the truly difficult prong of the employer's rebuttal is the showing that the employer is unable to advance its interest with a more narrowly tailored rule. This prong effectively requires the employer to show that the rule is drafted as narrowly as possible to avoid chilling Section 7 rights.
The language "narrowly tailored" is reflective of the strict scrutiny standard applied by courts in constitutional law cases upon a showing of infringement of a person's fundamental rights, such as rights to free speech, marriage, procreation, and privacy. Simply stated,
The new standard will be applied retroactively to invalidate existing workplace rules—even those deemed valid under the prior standard. Many employee handbooks and policies may need to be reviewed and revised.
The
5. Limits on the Use of Confidentiality and Non-Disparagement Clauses
The
The NLRA applies only to nonsupervisory employees. Managers and supervisors, independent contractors, public sector employees, and certain agricultural workers are not covered by Section 7. No legal impediment exists to use these provisions in those contexts.
The McLaren decision does not mention the use of disclaimers or whether a disclaimer could have salvaged these provisions. McLaren is under appeal at the
Revisit the use of confidentiality and non-disparagement clauses in severance agreements with your legal counsel.
6. Redefined Standard for Joint Employer Status
The joint employer standard effective in 2020 said a company may be considered a joint employer of another entity's employees only if the two share or codetermine the employees' essential terms and conditions of employment. Those conditions include hiring, firing, supervision, discipline, direction, wages, benefits, and similar decisions.
Under that rule, a joint employer "must possess and actually exercise substantial direct and immediate control over." Control exercised on a sporadic, isolated, or minimal basis is not deemed "substantial."
On
Under the proposed rule, one company is deemed the joint employer of a second company's employees not only where it directly or immediately exercises control over the second company's workforce, but where the first company's putative control is indirect or even simply reserved but not actually exercised.
Two or more employers will be held to be joint employers where they share or codetermine those matters governing employees' essential terms and conditions of employment—broadly defined.
A joint employer may be:
-
required to bargain with a union representing jointly employed workers;
The rule may have profound consequences for employers who use temporary workers.
The new
7. New
Both the
In
The decision narrowed the scope of the entrepreneurial opportunity. It effectively made it very difficult for employers to establish. The
Under the new standard,
-
a realistic ability to work for other companies;
The
The DOL also published an independent contractor rule under the Fair Labor Standards Act. Scheduled to go into effect
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Clarifies the standards and tests to be used in determining whether a worker is an employee or an independent contractor under the FLSA.
The final regulations identify two core factors when determining whether someone is an employee or independent contractor:
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The nature and degree of control over the work by the alleged employer.
The final rule also looks to additional factors:
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The amount of skill and initiative required.
There is significant potential for litigation under the new rules.
What's Next for Labor and Employment Law in 2024?
Already in the works is a new DOL overtime rule on the exempt salary level. On
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Review pay practices and create a list of employees who might be affected.
Other possible 2024 developments:
- Federal action on AI. Guidance may be issued but probably not regulations.
As legal trends emerge, Nyemaster Labor & Employment attorneys analyze the impacts on employers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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