Illinois had a busy 2013 on the labor and employment law front. The result is a host of new challenges for HR and businesses in the Land of Lincoln. Stacey Smiricky is a partner in Faegre Baker Daniels' labor and employment group in its Chicago office. Smiricky shared her insights with XpertHR about the most notable recent changes affecting employers.
What is the biggest challenge facing HR in Illinois today?
As is the case for many employers across the nation, compliance with the Affordable Care Act tops the list of potential headaches for HR this year, according to Smiricky.
Have there been any notable new Illinois laws or court rulings in the last nine months that will have a big impact on the workplace?
In the Courts
"The biggest case in Illinois was the Fifield v. Premier Dealer Services case, stating that for at-will employment to be considered adequate consideration for a restrictive covenant, the employee must have been employed for at least two years," Smiricky said. "This will change the way employers operate a lot. Before Fifield, accepted practice was that a job offer was adequate consideration."
But this Illinois Appellate Court ruling for the First District (where Cook County is located), leaves unanswered questions in its wake, according to Smiricky. The court did not address what would be considered adequate consideration prior to the two-year mark, including whether the following payments would be sufficient:
A small signing bonus; or
Severance payments for the noncompete (i.e., restrictive covenant) period.
Smiricky notes that if an employer does not want to pay additional consideration for a restrictive covenant, it must now decide whether to permit an employee access to its confidential information and customer relationships prior to the employee's two-year anniversary with the company.
While it remains unclear if courts outside of the First District will follow Fifield, many of the state's biggest employers are based in the Chicago area and are directly affected by the decision. And because the Illinois Supreme Court let the ruling stand in late 2013, Smiricky advises that employers elsewhere in the state comply with the decision.
On the Legislative Front
Smiricky cites the Illinois Firearm Concealed Carry Act as a new law that could provide some headaches for employers. In 2013, Illinois became the last state in the nation to allow public possession of concealed guns. Under the law, employers can still prohibit weapons on their property. But to do so, she said, they must "clearly and conspicuously" post a sign at the entrance to the building or property that concealed carrying of firearms is prohibited.
Smiricky also notes that employers can draft workplace policies stating that weapons will not be permitted on the premises. However, individuals with a concealed carry license must be allowed to secure their weapons in their locked vehicles. Also, employers may not restrict employees from carrying concealed firearms in a company-owned vehicle. The Illinois Department of State Police has 90 days to approve or deny a concealed carry application.
Meanwhile, Illinois became the 20th state to legalize medical marijuana with a new law that took effect January 1, 2014. "All Illinois employers are watching medical marijuana law and issues that will arise with workplace enforcement of drug-free policies," Smiricky said. "Employers must remember, though, that the law does not prohibit an employer from enforcing a policy concerning drug testing, zero tolerance or a drug free workplace provided the policy is applied in a nondiscriminatory manner."
Are there any bills and/or proposed rules currently pending in Illinois (or in Congress) that would have a big effect on employers?
While Illinois has long prohibited discrimination based on sexual orientation, the federal Employment Non-Discrimination Act would add a layer of protection. This bill has passed the Senate, but it is unclear whether the House will take action.
Smiricky notes there are a number of proposed federal laws related to equal pay. "It appears that both the Paycheck Fairness Act and Fair Pay Act are essentially redundant of protections available under the Equal Pay Act and applicable Illinois law," she said. Additionally, "Illinois will attempt to pass legislation permitting employers to seek orders of protection when they have employees who are domestic violence victims."
Are there any notable labor and employment enforcement trends to watch in Illinois?
Smiricky cautions employers that she has noticed an uptick in the past year in Illinois Department of Labor audits and enforcement actions. She notes that many complaints for unpaid wages (no matter how they were resolved) have resulted in onsite audits of records.
What is the number one mistake you see employers making today?
According to Smiricky, the leading mistake she sees is a failure to document performance issues before terminating an employee. "A down economy generally results in more employment litigation," Smiricky says. "It seems that any termination can turn into a lawsuit." That's why she views it as vital for management to have regular training on what constitutes proper documentation, adding that talking to an employee is no longer sufficient.