What employers need to consider post-Dobbs

In light of the U.S. Supreme Court decision on June 24, 2022, Dobbs v. Jackson Women’s Health Organization, which holds that access to abortion is not a constitutional right, employers are faced with myriad challenges moving forward. Our Labor and Employment lawyers, working with Reed Smith’s Reproductive Health Working Group, address some of the questions employers must consider now in terms of their workforces, including whether or not take a position publicly; how to manage their employees’ reactions in the workplace; dealing with claims involving religious and political opinion discrimination; and which policies to review in order to stay compliant.

Our client update is below:

Unanswered questions after Dobbs Part VI: Employment

Please reach out to the authors or the Reed Smith labor and employment lawyer with whom you normally work. We will continue to monitor developments and provide updates in response to the Dobbs opinion.

Supreme Court Rules in Favor of Arbitrability of PAGA Action

In a highly-anticipated decision, the U.S. Supreme Court issued its opinion in Viking River Cruises, Inc. v. Moriana (Case No. 20-1573) on June 15, 2022. The Court examined whether the Federal Arbitration Act (FAA) preempted California court precedent, which invalidated contractual waivers of representative claims under California’s Private Attorneys General Act of 2004 (PAGA).

Under PAGA, an employee may sue their current or former employer as a representative of the California Labor and Workforce Development Agency (“LWDA”). In such an action the employee can seek penalties for alleged violations of the Labor Code suffered by the employee themselves and other allegedly “aggrieved employees” if the employee was subjected to one or more violations of the California Labor Code.

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Sailing close to the wind: ‘without prejudice’ and the thresholds of ‘unambiguous impropriety’

The outcome of Swiss Re Corporate Solutions v Sommer [2022] EAT 78, (which we reported in this month’s newsletter) provides an interesting illustration of the scope of the ‘without prejudice’ privilege rules in the context of settling an employment tribunal claim.

The ‘without prejudice’ rule (the “Rule”) allows parties to have a full and frank exchange of views about a dispute or litigation, and even to make concessions about weaknesses in their own case, when discussing settlement. The parties can do this safe in the knowledge that anything said or done will be “without prejudice” and therefore cannot be relied on and would not be disclosable if settlement is not achieved and the matter goes to court/tribunal. The courts recognise that without prejudice privilege is important for the efficient operation of the legal system, as it facilitates parties to resolving disputes outside of court/tribunal.

There are only a small number of narrow exceptions to this Rule and the Sommer case is a good illustration of that. One exception is that the Rule cannot be abused or weaponised as a disguise or excuse for “perjury, blackmail or other unambiguous impropriety”. Case law has established that this ‘unambiguous impropriety’ exception should be construed narrowly – it should only be applied in the clearest cases of abuse. In 2021 the Court of Appeal ruled it would only be lost in “truly exceptional” circumstances.

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Strikes and cancellations: The impact of travel chaos on employers

With train strikes scheduled for next week, and flight cancellations now a regular occurrence, UK workers seem set for a summer of travel disruption. This blog explores the implication for employers, particularly where workers may be stuck abroad, or otherwise unable to get to their place of work.

Flight cancellations

After two years of restricted travel due to the pandemic, summer 2022 finally provides an opportunity for well overdue holidays, yet with scores of flights being cancelled daily, not everyone will get away as planned, or return when they are meant to. Notwithstanding an argument that flight cancellations or being stuck abroad is not an exceptional circumstance in present times, workers will inevitably feel like it is something outside of their control, and employers are generally advised to act pragmatically.

For those stranded abroad after a cancelled flight home, getting back to work may prove problematic (unless they have booked extra annual leave as a contingency). Those who are able to work, albeit abroad due to a cancelled flight, should be paid in the normal way – working remotely is commonplace in a post-pandemic world, and provides a practical short-term solution where the circumstances permit. However, this approach assumes that a worker has the means to continue working. Although some diligent or senior employees may have taken their work phone and laptop with them so that they can work even if they are out of the country, requiring or expecting all workers (to the extent that the option is available) to do so is not particularly conducive or consistent with the idea that annual leave is a period of rest and relaxation. 

Unless a contract or policy states otherwise (which is unlikely), workers stuck abroad who cannot work remotely, or have no means to do so, have no entitlement to be paid for their absence once their annual leave comes to an end. However, assuming employees are making all reasonable efforts to get back to the UK as soon as they can, and being empathetic to the anxiety and administrative burden that workers will be facing in making alternative arrangements, employers could consider treating it in the same way as they would an ‘emergency’ situation, so if this is paid for a set number of days in other circumstances, to do so here too. Alternative possibilities are to require the days to be taken as paid annual leave, or otherwise as authorised unpaid absence. Options should be discussed in conjunction with the affected employee to find a mutually convenient solution depending on their specific circumstances, although employers also need to be mindful of treating workers consistently.

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California Supreme Court rules additional penalties may be recoverable for meal and rest period violations

On May 23, 2022, the California Supreme Court handed down its decision in Naranjo v. Spectrum Security Services. The decision discusses the penalties recoverable by employees for an employer’s alleged failure to pay meal and rest period premiums where a proper meal or rest period is not provided. The Naranjo Plaintiffs filed a putative class action lawsuit alleging that his employer failed to provide meal and rest periods or premium compensation in lieu thereof as required by California law. In addition to premium pay for meal and rest periods, Plaintiffs also brought derivative claims alleging failure to timely pay wages at termination and failure to provide accurate wage statements. Specifically, Plaintiffs argued that because meal and rest period premiums were not paid, they also were not timely paid all wages due at termination and their wage statements were invalid because they did not reflect the premiums that were not paid.

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EEOC issues guidance on employer use of AI under the ADA

Employers routinely strive to find innovative ways to recruit, retain, and manage top talent. Proponents of artificial intelligence (AI) advocate that it can be a powerful tool for such purposes given that AI can be used to collect and analyze massive amounts of candidate and employee data in many different ways and in a fraction of the time needed by human analysts. By way of example, AI may be used in the hiring process to analyze qualifications or mine data from resumes and other submissions by candidates. It also may be used to assess an individual’s perceived fitness for a particular job, including their personality, aptitude, cognitive skills, or other perceived qualities, based on their performance during screening tests, video interviews, or other virtual interactions. AI also may be used to monitor and analyze employees’ working patterns or productivity based on measurable output, including even the most fundamental of activities such as keystrokes. Employers might presume that, because this is data-driven, there is no risk of unlawful discrimination or bias.

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Queen’s Speech 2022: What next for UK Employment Law?

The Queen’s Speech at the State Opening of Parliament sets out the UK government’s legislative agenda for the year ahead. This year’s speech took place on 10 May, and in addition to the Queen’s absence, there was notable absence of any employment law reform.

In particular, the long-awaited Employment Bill, which was included in the Queen’s Speech in December 2019, was not one of the new Bills announced. Its omission was not unexpected, having been excluded from the legislative agenda during 2020 and 2021 too, but it is perhaps now even clearer that employment law is not a priority for the current government.

When first announced, the Employment Bill was expected to contain a plethora of new or enhanced rights including: carer’s leave; neonatal pay and leave; enhanced redundancy protection during pregnancy and maternity; an ability to retain tips; making flexible working the default; and increased contract predictability for workers. It was also expected to legislate to create a new single enforcement body. 

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Covid-19 related refusal to attend the workplace

Covid-19 related reluctance or refusal to attend the workplace is nothing new, but as we enter a new phase of the pandemic, ‘Living with Covid’, developing case law will be of interest to employers who require or expect workers to attend the workplace on a full or hybrid basis. This blog considers the current guidance on workplace attendance, the recent Employment Appeal Tribunal’s (EAT) decision in Rodgers v Leeds Laser Cutting (a case looking at whether an employee had protection against unfair dismissal when refusing to attend work due to Covid related concerns), and some practical considerations for employers.

The UK government’s ‘Living with Covid’ plan came to full fruition in England on 1 April 2022, with remaining Covid-specific guidance now largely obsolete, and replaced with general public health guidance. This essentially treats Covid like other respiratory illnesses for individuals and business to manage, leaving employers with discretion on how to manage ongoing Covid risks in the workplace, and individuals encouraged to exercise personal responsibility. 

Employers are no longer required to consider Covid specifically in their risk assessments, nor have specific Covid mitigation measures in place, although they must continue to comply with their general health and safety obligations. Similarly, ‘work from home if you can’ guidance has been removed, although individuals with symptoms of a respiratory infection (including Covid), and who have a high temperature or do not feel well enough to work, or anyone with a positive Covid test, are advised to try and stay at home, working from home if possible, and to avoid others. Individuals who cannot work from home are advised to discuss options with their employer. 

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Florida expands definition of “discrimination” and increases employer liability for discrimination in workplace diversity training

Florida Governor Ron DeSantis signed a bill into law that prohibits employers from implementing discriminatory practices in their diversity training programs, effective July 1, 2022. The bill, known as the “Individual Freedom Act,” amends the Florida Civil Rights Act, Fla. St. 760.01, et seq., to expand the definition of discrimination and subjects employers to liability for violations.

Expanding the definition of “discrimination”

Specifically, the Individual Freedom Act amends Fla. St. § 760.10, to prohibit public employers and private employers with 15 or more employees from requiring any individual – as a condition of employment, membership, certification, licensing, credentialing, or passing an examination – to participate in training, instruction, or any other required activity that espouses, promotes, advances, inculcates, or compels the individual to believe any of the following concepts:

  1. Members of one race, color, sex, or national origin are morally superior to members of another race, color, sex, or national origin.
  2. An individual, by virtue of his or her race, color, sex, or national origin, is inherently racist, sexist, or oppressive, whether consciously or unconsciously.
  3. An individual’s moral character or status as either privileged or oppressed is necessarily determined by his or her race, color, sex, or national origin.
  4. Members of one race, color, sex, or national origin cannot and should not attempt to treat others without respect to race, color, sex, or national origin.
  5. An individual, by virtue of his or her race, color, sex, or national origin, bears responsibility for, or should be discriminated against or receive adverse treatment because of, actions committed in the past by other members of the same race, color, sex, or national origin.
  6. An individual, by virtue of his or her race, color, sex, or national origin, should be discriminated against or receive adverse treatment to achieve diversity, equity, or inclusion.
  7. An individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race, color, sex, or national origin.
  8. Such virtues as merit, excellence, hard work, fairness, neutrality, objectivity, and racial colorblindness are racist or sexist, or were created by members of a particular race, color, sex, or national origin to oppress members of another race, color, sex, or national origin.

However, these concepts may be included in training or instruction if they are addressed in an objective manner and without endorsement.

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Pennsylvania on the path to increase threshold for tipped employees

In November 2021, Governor Tom Wolf’s administration proposed a new regulation that will require tipped employees to earn at least $135 a month in tips before an employer is permitted to pay the $2.83 per hour tipped rate, rather than state’s minimum wage of $7.25 an hour. Currently, in Pennsylvania, employers can pay tipped employees less than the state minimum wage if they make at least $30 a month in tips. However, it is likely this will soon change.

On March 21, 2022, Pennsylvania’s Independent Regulatory Review Commission (IRRC) approved the regulation and explained that this new threshold is necessary to reflect the changes of inflation over the past four decades when the $30 tip threshold went into effect in 1977, which was described as “woefully outdated.” Additionally, the regulation also redefines how Pennsylvania classifies who is a tipped employee. Following federal guidance, a tipped employee will be an employee who spends 80% of their time on tipped work and who is paid below the $7.25 minimum wage amount.

Following approval by the IRRC, the regulation will be submitted to the Pennsylvania Attorney General for legal review. If the attorney general approves, Pennsylvania residents will see the regulation take effect 90 days after being posted in the Pennsylvania Bulletin.

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