Legal Updates – January 2020


Employers may once again require confidentiality during workplace investigations 

In its 2015 Banner Estrella Medical Center decision, the Obama-era NLRB held that it was generally unlawful for an employer to require confidentiality during a workplace investigation unless the employer could supply specific evidence demonstrating that corruption of the investigation was likely to occur absent confidentiality.  In its December 16, 2019 Apogee Retail LLC decision, the NLRB overruled Banner Estrella, holding that confidentiality rules for internal workplace investigations are lawful provided their terms apply only for the duration of the inquiry.

The NLRB will use its Boeing standard to determine a confidentiality rule’s legality.  If a confidentiality rule is properly limited to the duration of an investigation, the rule is presumptively lawful as a Category 1 rule under Boeing.  Where a rule does not, on its face, apply for the duration of any investigation, the rule is analyzed as a Category 2 rule under Boeing, and a determination is made whether one or more legitimate justifications exists for requiring confidentiality even after an investigation is over.  If a legitimate justification exists, a determination is then made whether the justification outweighs the effect of requiring post-investigation confidentiality on employees’ exercise of their Section 7 rights.

Overtime Payments for Salaried, Non-Exempt Employees

The Department of Labor (DOL) announced a new rule revising the regulations that govern how employers compute overtime payments for salaried, non-exempt employees under the FLSA.  The FLSA requires overtime pay of at least one and one half times the “regular rate” for time worked in excess of 40 hours per workweek.  The previous regulation did not provide much certainty to employers regarding when benefits and perks had to be included when calculating the “regular rate.”  The new rule is the first significant change to these regulations in nearly fifty years.

The new rule, which went into effect January 15th, clarifies that employers may offer the following perks and benefits to employees without risk of additional overtime liability:

  • The cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, and education provider, or a student-loan program), and adoption assistance;
  • Payments for unused paid leave, including paid sick leave or paid time off;
  • Payments of certain penalties required under state and local scheduling laws;
  • Reimbursed expenses, including cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred “solely” for the employer’s benefit; and clarifies that reimbursements that do not exceed the maximum travel expenses are per se “reasonable payments”;
  • Certain sign-on bonuses and certain longevity bonuses;
  • The cost of office coffee and snacks to employees as gifts;
  • Discretionary bonuses, by clarifying that the label given a bonus does not determine whether it is discretionary and providing additional examples; and
  • Contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense.

The full text of the new rule is available here.

Joint Employer Classification

On January 12, the DOL finalized its makeover of the joint employer rule.  The new rule is expected to substantially narrow the joint employer definition and provide clarity about the circumstances under which two parties will be considered joint employers.

Under the new rule, a person or entity will be considered a joint employer if that person or entity “is acting directly or indirectly in the interest of an employer in relation to the employee.”  To determine whether a person or entity meets this requirement, the DOL will impose a four-factor test:

  1. Does the person or entity hire or fire the employee?
  2. Does the person or entity supervise and control the employee’s work schedule or conditions of employment?
  3. Doe the person or entity determine the employee’s rate and method of pay?
  4. Does the person or entity maintain the employee’s employment records?

The DOL has noted that no one factor alone is enough to make an entity a joint employer.  Instead, it is a case-by-case and fact specific analysis that will be required to determine joint employer status.

The new rule becomes effective March 16, 2020 and is important for several reasons.  First, a party’s mere reservation of rights to supervise or control and employee’s conditions of employment will no longer necessarily mean that the party is a joint employer.  Second, actual exercise of control for at least one of the DOL’s factors will be required for a joint employer determination.  And third, satisfaction of the fourth factor, maintaining an employee’s employment records, will no longer be enough, by itself, to render a party a joint employer.

The full text of the new rule is available here.

Accommodating a pregnant employee

Recently, a popular national morning show stated that “under the current federal law, while employers are prohibited from firing or refusing to hire pregnant workers, they aren’t always required to make any on-the-job accommodations, such as offering more bathroom breaks or temporary desk jobs.”  This is not entirely accurate.

The US Supreme Court has held that an employer must offer a reasonable accommodation to a pregnant employee if it offers reasonable accommodations to other employees with similarly disabling conditions.  The EEOC adopted the rationale of the Supreme Court and updated its guidance on pregnancy discrimination.

The bottom line for employers when dealing with the need to accommodate a female employee because of pregnancy is that they must provide the same accommodations to pregnant workers as to other workers with similarly disability medical conditions.  When faced with a request for an accommodation by a pregnant employee, an employer should consider:

  • Have we ever provided light duty to expedite the return-to-work of an employee with a work-comp claim?
  • Have we ever provided light duty to an employee as an ADA reasonable accommodation?
  • Have we ever allowed a lifting or standing restriction to an employee as an ADA reasonable accommodation?
  • Have we ever provided time off to an employee as an ADA reasonable accommodation?

If an employer answers “yes” to these or similar questions, then it cannot deny providing the same accommodations to a pregnant worker.