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In July of this year, a Texas federal district court judge denied the state of Texas’ request to vacate the Equal Employment Opportunity Commission’s (EEOC) most recent guidance relating to gender identity discrimination. In doing so, the federal court held that the state could not bring the challenge in a previously filed lawsuit regarding prior EEOC guidance but, instead, must file a new lawsuit.

The state of Texas first took issue with the EEOC’s 2021 guidance, which required bathroom, dress code, and pronoun accommodations for employees based on gender identity. Texas filed suit against the EEOC in the United States District Court for the Northern District of Texas, requesting the court vacate the 2021 guidance (2021 Lawsuit). On October 1, 2022, the court vacated the 2021 guidance and issued a declaratory judgment that the guidance was unlawful on several grounds, holding that it: (1) was contrary to law because Title VII, even after the Supreme Court’s decision in Bostock v. Clayton County, does not require employers to provide accommodations regarding bathrooms, dress codes, or pronoun usage based on gender identity; and (2) unlawfully extended Bostock’s “non-discrimination holding” beyond statutory limits imposed by Congress. The EEOC did not appeal the district court’s judgment.Continue Reading Federal judge requires state of Texas to file new lawsuit to challenge recent EEOC guidance on gender identity discrimination

As we previously reported, the U.S. Equal Employment Opportunity Commission’s (EEOC) final rule on the Pregnant Workers Fairness Act (PWFA) went into effect on June 18, 2024. The final rule provides guidance on how the EEOC will interpret and enforce the PWFA, including with respect to conditions that may qualify for accommodation, examples of what constitutes an accommodation, and clarification on the process through which employers and employees engage in the interactive process to obtain an accommodation.

Legal challenges to the final rule

The final rule has been the subject of several legal challenges. Recently, a U.S. District Judge in Louisiana issued a preliminary injunction that partially blocks the provision in the final rule requiring workplace accommodations for “purely elective abortions.” In the final rule, the EEOC takes the position that a person’s choice to have (or not have) an abortion qualifies as a medical condition that falls under the PWFA’s purview. The constitutionality of the final rule was challenged by the attorneys general of Louisiana and Mississippi, along with four religious organizations.Continue Reading EEOC’s final rule on the Pregnant Workers Fairness Act in flux

On July 1, 2024, the first phase of the U.S. Department of Labor (DOL)’s updated overtime rule went into effect, raising the minimum salary threshold for employees who are classified as “exempt” under the white-collar exemptions to the Fair Labor Standards Act (FLSA). The rule is subject to legal challenges but, as detailed below, remains in effect for now (other than for the State of Texas as a government employer).

A full summary of the rule is available here. In short, as of July 1, 2024, employees must be paid $844 per week ($43,888 annualized) to satisfy the salary threshold for the executive, administrative and professional exemptions. To satisfy the highly compensated” exemption salary threshold, employees must be compensated at least $132,964 per year (and a minimum of $844 per week). Effective January 1, 2025, the minimum salary threshold is set to increase to $1,128 per week ($58,656 annualized) for the executive, administrative, and professional exemptions, and to $151,164 per year for the highly compensated employee exemption. From there, the rule provides for updates to the minimum salary threshold every three years, starting July 1, 2027.Continue Reading Federal court challenges to DOL overtime rule yield mixed results while foretelling a merits ruling before end of year

Governmental entities play a vital role in upholding federal labor and employment regulations and would face significant disruption in the event of a government shutdown. In September, we provided a brief review on how a shutdown would affect the government agencies that enforce federal labor and employment laws — the U.S. Equal Employment Opportunity Commission…

On January 29, 2024, the Delaware Supreme Court issued an important decision addressing the enforceability of restrictive covenants. As detailed below, in Cantor Fitzgerald v. Ainslie, the court upheld forfeiture-for-competition provisions set forth in a limited partnership (LP) agreement and ruled in favor of the partnership not having to pay out millions to former partners.

Key highlights

In Cantor Fitzgerald, the Delaware Supreme Court decision relied significantly on the following factors in enforcing the LP agreement as written and determining that the disputed provisions were, in fact, enforceable:

  • The restrictive covenant did not bar the claimants from engaging in competitive activities.
  • Rather, the provisions in question provided, in part, that receipt and retention of prior conditional awards of a portion of their compensation would be subject to the condition precedent that the recipient refrained from competing – in other words, these were forfeiture-for-competition provisions.
  • These forfeiture-for-competition provisions were not liquidated damages provisions (triggered by a breach of contract); rather, these provisions set up a condition precedent (not competing with the employer) to the employees’ receipt of the amounts that had been held back. 
  • The “employee choice doctrine” suggests that courts do not review forfeiture-for-competition provisions for reasonableness where, as here, the employee voluntarily terminates employment (as opposed to remaining employed and vesting in the contingent compensation amounts).

Continue Reading Delaware Supreme Court confirms enforceability of restrictive covenant provisions in favor of employer-partnership, reversing Chancery Court determination

Last week, Governor Hochul announced a suite of proposed measures aimed at addressing rising maternal and infant mortality rates. As is relevant to New York employers, this includes a proposed expansion of New York State Paid Family Leave to include 40 hours of paid leave to attend prenatal medical appointments. If signed into law, this would make…

On October 26, 2023, the National Labor Relations Board issued a final rule that dramatically lowered the standard for companies to qualify as joint employers. You can read more about the rule here. In short, the new rule provides that even reserved, unexercised, or indirect control, such as through an intermediary, over one or more of the rule’s seven enumerated terms or conditions of employment is sufficient to establish joint employment. There is no doubt that implementation of the new rule will drastically expand when companies will be considered joint employers and create additional costs and obstacles for employers.Continue Reading Dueling challenges to NLRB’s new joint employer rule succeed in extending effective date of rule

Governor Gavin Newsom signed S.B. 525 into law adding new minimum wage requirements to Sections 1182.14 and 1182.15 of the California Labor Code. These new sections establish five comprehensive minimum wage schedules for “covered health care employees”, which includes contracted and subcontracted employees. Effective June 1, 2024, “covered health care facilities” will be required to implement the applicable minimum wage schedule, depending on the nature of the employer, as set forth by the law. In general, the law preempts any local ordinances setting wages for healthcare workers. To determine the law’s applicability, health care providers across California must consider (1) whether they meet the definition of a “covered health care facility” and, if so, (2) who within their workforce meets the definition of a “covered health care employee”.Continue Reading California enacts increase in the minimum wage for covered health care employees

We previously alerted employers to California employment law bills that were still alive toward the end of the most recent legislative session. That session ended on September 14, 2023 and Governor Newsom had until October 14, 2023 to either sign, approve without signing, or veto the bills that survived. Below is an update on the fate of these employment law bills so employers will know which ones are slated to become law. The Governor vetoed several noteworthy bills that would have expanded the state’s protected classes, employee work-from-home rights and CalWARN notice requirements. On the other hand, the Governor signed multiple significant employment law bills into law, including those creating increased paid sick leave requirements, expanded re-hiring rights, a new reproductive loss leave, and a new requirement that employers establish a workplace violence prevention plan. Unless otherwise noted, the approved bills will take effect January 1, 2024.Continue Reading California employment law legislative update: bills that will become law in 2024 and beyond

As detailed in part one and part two of our multipart series, artificial intelligence (AI) and generative artificial intelligence (GAI) have had a sweeping impact on the U.S. workplace. However, as we will detail in this third and final installment, there are potentially material risks and pitfalls associated with using AI and GAI to assist with various aspects of the employment relationship. We will discuss several of these below.Continue Reading How artificial intelligence is impacting the U.S. workplace (Part III)