Miles & Stockbridge’s Labor, Employment, Benefits & Immigration Practice Group presented its 21st annual Hot Topics in Employment Law seminar April 25 to clients from throughout Maryland and beyond. Topics covered included employee pay updates; the proposed federal ban on non-competes; attacks on confidentiality clauses in employment agreements; federal and state leave law updates; and the myriad issues raised on a day-to-day basis with human resources professionals, including health and safety issues in the workplace, the impact of changing cannabis laws on employers and more. Here are some highlights:
Trending Issues in Employee Pay
Suzzanne Decker, Stephanie Baron and Michelle Johnson discussed the rise of pay transparency laws, which require employers to disclose information about employee compensation to eliminate pay disparities. Some states have affirmative disclosure obligations, while others only require disclosure upon request. Since pay transparency requirements vary by state, employers should check applicable state laws to ensure compliance in each case. For example, in Maryland, employers must provide a job applicant with the wage range for the position applied for upon the applicant’s request, cannot prohibit employees from discussing salaries and cannot require employees to share previous salary information.
The trio also discussed pay equity issues, including factors a company can legally consider when setting employee pay and state reporting requirements, as well as business expense reimbursement laws in states like California, which require employers to reimburse employees for all “necessary” expenses incurred to perform their job duties, including those incurred at the employer's direction.
Suzzanne, Stephanie, and Michelle further examined the rise of state-paid family and medical leave programs similar to state-run unemployment insurance programs. In addition, they discussed the complexities of crafting paid sick-leave policies to comply with the increasing number of state and local paid sick-leave laws. Employers may devise a single policy to meet the requirements of all applicable state laws or have state-by-state policies addressing each applicable state law individually.
Protecting Business Information in the Current Environment
Kristy Eriksson addressed the increased regulation of employee non-compete agreements at both the state and federal level. On the state level, there are a growing number of state laws restricting non-competes. Common statutory restrictions on non-competes include salary thresholds, job duties thresholds and time period limits, among other restrictions. At the federal level, Kristy discussed the Federal Trade Commission’s proposed rule that would ban employers from requiring employees to sign non-compete provisions and require employers to rescind existing non-compete agreements (our recent blog on this topic can be found here). The FTC currently is reviewing all comments submitted in response to the proposed rule. It then may reopen the comment period, issue a new proposed rule or issue a final rule. In the meantime, employers should review their current provisions and practices with respect to existing non-compete agreements and consider implementing alternate means to protect their business assets.
Rebecca Leaf presented on recent developments in federal labor law regarding limitations on confidentiality and non-disparagement clauses in severance agreements. In a recent case, McLaren Macomb, the National Labor Relations Board declared that non-disparagement and confidentiality clauses must be narrowly tailored. The general counsel of the NLRB, the agency’s top prosecutor, also provided guidance on how she will interpret the McLaren Macomb decision.
Rebecca outlined several key points of the GC’s guidance, including that the law will have a retroactive effect but an unlawful provision will not invalidate the entire agreement; employers may continue to require confidentiality of proprietary and trade-secret information and may still require that an employee keep the financial terms of the agreement confidential; however, employers can no longer prohibit employees from sharing information about the agreement with third parties; and that lawful non-disparagement clauses must clearly define “disparage” and may only prohibit the employee from making statements about the employer that are “maliciously untrue.” Notably, supervisors are excluded from the NLRB’s coverage but the law has a broad application and could also be applied to confidentiality and non-disparagement provisions in other types of agreements such as non-competes and non-solicitation agreements. (Click here to read more analysis of McLaren Macomb.)
Veronica Jackson discussed data privacy and the increasing number of states that have considered comprehensive consumer privacy laws. California was the first state to enact comprehensive data privacy legislation that covers employees. The law only applies to California residents but includes job applicants, independent contractors, dependents and beneficiaries. Many employers are also utilizing employee biometric information for a variety of reasons, including, but not limited to, monitoring when workers clock in and out, restricting access to secure areas and monitoring productivity and ergonomic tracking. However, many states now have laws that require businesses to provide notice and obtain consent from employees before collecting biometric data.
Veronica also discussed various data privacy risks and ways for employers to protect their data in the current environment, including providing clear and accessible policies, regular training, utilizing encryption, software updates and ensuring data security hygiene (such as clean desks, complex passwords and email awareness).
Beth Hall discussed threats to trade secrets in the current environment and specific steps for companies to properly identify and protect their trade secrets and confidential information given the ongoing attack on confidentiality and non-compete agreements and the increasing uncertainty surrounding their enforceability. Employers’ trade-secret protection measures should be “reasonable” under the totality of the circumstances to maintain their secrecy and value and based on specific factors unique to the enterprise and information being protected. Reasonable protection measures may include contracts (confidentiality and non-compete agreements), electronic and IT security measures, physical controls, training and awareness and policies and procedures (such as onboarding and off-boarding procedures and remote work policies). Protecting trade secrets is an ongoing process in which a company’s trade secrets and control measures should be continuously monitored, assessed and adjusted if needed when circumstances change.
Employee Safety, Health and Well-Being
Veronica, Sasha Hodge-Wren and Paolo Pasicolan discussed trends in employee safety, health and wellness. Veronica provided an update on the legal environment facing employers as it pertains to COVID-19. Although the COVID-19 national emergency is ending soon, employers should be aware that there are still various COVID-19 requirements and prohibitions in effect, including a federal mandate for health care workers subject to a Centers for Medicare & Medicaid Services regulation to be vaccinated against COVID-19 and some state and local laws restricting private employer vaccine mandates.
Veronica also discussed the increase in Occupational Safety and Health Administration inspections and higher penalties for OSHA violations since March 2020 and the recent changes to OSHA’s Severe Violator Enforcement Program to strengthen enforcement efforts and improve compliance.
Sasha examined the growing state trend of decriminalizing or legalizing marijuana and the impact on employers. For example, Maryland recently passed legislation legalizing recreational marijuana use for individuals 21 and over. While there is no guidance yet regarding the impact of the law on employers, their ability to deny employment to applicants and discipline employees based on cannabis testing results may soon be a thing of the past. In fact, adverse hiring decisions and employee discipline based on cannabis testing results may already be prohibited in states with strong employment protections for users of recreational cannabis. In light of these developments, employers should review their existing drug testing policies and discipline practices related to cannabis use and ensure they are consistent with applicable state laws.
Sasha also addressed two recent federal pregnancy and lactation accommodation laws, including the Pregnant Workers Fairness Act which requires covered employers to provide reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions. In addition, the PUMP Act expands upon the requirements set forth in the Break Time for Nursing Mothers provision of the Fair Labor Standards Act and requires employers to provide reasonable pumping breaks for exempt employees.
Paolo examined the impact of the Supreme Court’s Dobbs decision on abortion travel reimbursement for employees. Despite Dobbs, there are four ways that employers can reimburse employees for out-of-state travel associated with abortion: utilizing the employer’s existing health plan; adding a health reimbursement arrangement (“HRA”); reimbursing employees through a wellness program; or – the most comment method – utilizing a reimbursement program.
For more information and access to presentation materials, please visit the event site.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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