In the midst of the COVID-19 pandemic that is dominating the news, Virginia Governor Ralph Northam signed into law a slew of bills passed by the General Assembly that transform Virginia’s employment laws. Effective July 1, 2020, Virginia’s long-standing status as a business-friendly state with few labor and employment laws will end. These new state employment laws are far more protective of workers than current federal law. More important, these state law options likely will drive all employment-related litigation into state court where obtaining summary judgment is nearly impossible.
This is the first in a series of alerts that will discuss Virginia’s groundbreaking new laws governing workplace discrimination and retaliation, worker misclassification, wages, restrictive covenants, background checks and whistleblower claims.
Amendments to the Virginia Human Rights Act
Both the House of Delegates (H.B. 1049) and the Senate (S.B. 868) passed somewhat conflicting bills amending the same sections of the Virginia Human Rights Act (VHRA). As Governor Northam signed S.B. 868 last, that version of the bill is likely to be the version codified by the Virginia Code Commission. While initially offered with the purpose of making discrimination based on sexual orientation and gender identity in public accommodations, employment, housing, and credit applications illegal, S.B. 868 does much more. It dramatically changes the coverage of the VHRA and provides a private right of action to state court after exhausting administrative remedies.
The current version of the VHRA applies only to employers with five (5) to fourteen (14) employees. Effective July 1, 2020, however, for employers with fifteen (15) or more employees, the VHRA broadly prohibits unlawful employment practices on the basis of race, color, religion, national origin, status as a veteran, sex, sexual orientation, gender identity, marital status, pregnancy, childbirth and related medical conditions, and lactation. For employers with more than five (5) employees, the amended VHRA prohibits unlawful discharge on the basis of race, color, religion, national origin, status as a veteran, sex, sexual orientation, gender identity, marital status, pregnancy, childbirth and related medical conditions, and lactation. Thus, the prohibitions for larger employers (those with 15 or more employees) apply generally to “unlawful employment practices,” while the prohibitions that pertain to employers with between 5 and 15 employees apply only to “unlawful discharge.” As to age discrimination, however, the law is not as protective. The amended VHRA will only apply to employers with more than five (5) but fewer than twenty (20) employees, leaving older citizens of the Commonwealth who work for employers with 20 or more employees without a state-court remedy for age discrimination.
Significantly, under S.B. 868, Virginia employers now must provide reasonable accommodations related to pregnancy, childbirth, or related medical conditions and lactation when requested by an employee, without reference to whether the accommodations impose an undue hardship on the employer.
S.B. 868 creates a broad private right of action for employees. While employees must first file a complaint with the Virginia Division of Human Rights (VDHR), now part of the Office of the Virginia Attorney General (AG), they may proceed to state court once they have exhausted this administrative remedy. Significantly, the procedural provisions contained in S.B. 868 do not contain clear deadlines and are confusing, and at times, contradictory. The bill signed by the governor does not contain a deadline by which an employee must file a complaint with the VDHR. Once a complaint has been perfected (which is undefined), the VDHR will serve a charge on the employer, setting forth the complainant’s rights and time period in which the complainant must file a lawsuit in state court. In general, the amendments provide for a process by which the VDHR investigates the charge, makes a probable cause determination and then either proceeds to try to resolve the charge or issues a notice of right to sue to the complainant. The complainant then has 90 days from issuance of the notice to file a lawsuit. Although it is unclear how this provision would be applied, the amended VHRA empowers a court, upon certification by the VDHR, to issue temporary relief while a charge is pending to prohibit an employer from taking action that would render a later court order ineffectual.
An employee is entitled to a jury trial under the amended VHRA, and potential damages include uncapped compensatory damages, punitive damages up to the state cap of $350,000, reasonable attorney’s fees and costs, as well as injunctive or other relief as may be appropriate. Unlike federal law, compensatory damages are not capped by employer size.
The law also expands the authority of the Virginia AG to investigate complaints and charges of discrimination on its own, including on a systemic basis, to issue reasonable cause determinations, and engage in conciliation. The Virginia AG will have the authority to commence civil actions on behalf of individuals, or groups of individuals, to address systemic discrimination and obtain injunctive and/or monetary relief. In an action by the Virginia AG, the court may also award a civil penalty of up to $50,000 for each violation for the first violation, and up to $100,000 for any subsequent violation, payable to the Literary Fund.
In separate legislation also amending the VHRA, H.B. 1514 and S.B. 50 expand the race discrimination protections by defining the terms “because of race” and “on the basis of race” to include traits historically associated with race, including hair texture, hair type, and protective hair styles such as braids, locks, and twists – protections not expressly afforded under federal law. As a result, employers should evaluate their grooming policies to ensure they do not prohibit hair types “historically associated with race” and train managers to be aware of this law.
Pregnancy discrimination and accommodation
Two other bills, H.B. 827 and S.B. 712, likewise amend the VHRA to expand the protections relating to pregnancy, childbirth and related medical conditions, and lactation. Both bills explicitly prohibit pregnancy discrimination, require employers to provide reasonable accommodations related to pregnancy, childbirth and related medical conditions, and lactation, and create a private cause of action for pregnancy discrimination. They also require the posting of certain notices and set forth specific information that must be contained in any employee handbook. An employer must also provide information about the law to an employee within ten (10) days of such employee providing notice to the employer that she is pregnant.
New whistleblower protections for employees
H.B. 798 creates a new, broad whistleblower statute that includes a private right of action for whistleblowers. The law broadly prohibits retaliation by employers against employee whistleblowers for reporting in good faith violations of any federal or state law or regulation to a supervisor, governmental body, or law-enforcement official. Among other protected whistleblower activities, the law also prohibits retaliation where an employee refuses to perform an act that violates any federal or state law or regulation. The law is unclear as to whether there must be an actual violation of law or whether an employee’s reasonable belief would be sufficient. Nonetheless, the law explicitly states that it does not authorize an employee to disclose information protected by law, legal privilege, or common law confidentiality of communications, nor does it permit an employee to disclose information that he/she knows is false or in reckless disregard for the truth.
Under this new law, an employee may bring a civil lawsuit within one year of the employer’s alleged retaliation and may seek injunctive relief, reinstatement, compensation for lost wages, benefits, and other remuneration, and reasonable attorney’s fees and costs. To mitigate the risks from a potential whistleblower claim, employers should establish robust whistleblower procedures, train managers on them, and communicate them regularly to all employees.
Prohibiting retaliation against employees sharing wage information
Finally, in an apparent effort to make wage payments more transparent, H.B. 622 prohibits an employer from retaliating against an employee because the employee inquired about, or discussed with another employee, information about either the employee’s own wages or about any other employee’s wages. The law permits the Virginia Department of Labor and Industry to assess a civil penalty not to exceed $100 for each violation of the law.
For more information on developments in these areas or their impact upon your business, please contact Betty Graumlich at firstname.lastname@example.org, Mark Passero at email@example.com or the Reed Smith lawyer with whom you normally work.