Employment Law This Week®: NJ Limits NDAs, DOL’s Proposed Overtime Rule, Pay Data Collection, Sexual Harassment Training

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This Employment Law This Week® Monthly Rundown features a recap of the most important news from March 2019. The episode includes:

1. New Jersey Limits Nondisclosure Agreements in Harassment, Discrimination, and Retaliation Settlements

The month of March brought important regulatory changes for employers on the federal and state levels, including some long-anticipated rules and some new trends beginning to emerge. For example, on March 18, 2019, New Jersey enacted a law See more +

This Employment Law This Week® Monthly Rundown features a recap of the most important news from March 2019. The episode includes:

1. New Jersey Limits Nondisclosure Agreements in Harassment, Discrimination, and Retaliation Settlements

The month of March brought important regulatory changes for employers on the federal and state levels, including some long-anticipated rules and some new trends beginning to emerge. For example, on March 18, 2019, New Jersey enacted a law that limits the use of nondisclosure provisions to maintain confidentiality regarding workplace harassment, discrimination, and retaliation claims.

"The new law makes any nondisclosure provision in an employment contract or a settlement agreement that has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment unenforceable against an employee. In the wake of the #MeToo movement, nondisclosure agreements have been the focus of many legislatures. New York, California, and Washington are among the states that have enacted bans or restrictions on such contract provisions. And a number of states are currently considering such measures. Most of these laws, however, are narrower in scope than New Jersey, in that they're limited to banning disclosure of sexual harassment claims, whereas New Jersey extends to any form of harassment, discrimination, or retaliation." – Denise Merna Dadika, Member of the Firm, Epstein Becker Green

2. DOL Issues Proposed Overtime Rule

The U.S. Department of Labor (“DOL”) issued its long-awaited proposed changes to overtime salary thresholds, which would replace an Obama administration rule that was blocked by a federal judge in 2017.

"The [DOL] has announced that it wants to update the regulation governing the exemption for executive, administrative, and professional employees, and it wants to do that by increasing the minimum salary threshold to $679 per week, which is an increase of about 50 percent over the existing level. The [DOL] contemplates in the rulemaking that the final rule will become effective in January of 2020. That's probably a bit optimistic if we look at the normal timetables for rulemakings of this sort. It would be more likely to see the final rule issued in late 2019 or early 2020, becoming effective in early to mid-2020."– Paul DeCamp, Member of the Firm, Epstein Becker Green

3. District Court Reinstates Pay Data Collection

Another federal judge has hit the restart button on Obama-era EEO-1 pay data collection requirements. The U.S. Office of Management and Budget (“OMB”) stayed the requirements in 2017 before they went into effect. It’s unclear what the impact the judge’s decision to lift the stay will have on the 2018 reports EEO-1 reports, which are due May 31.

"The federal judge found that the OMB's decision to review and stay this new EEO-1 report was an arbitrary and capricious administrative action, because it lacked a reasoned explanation, and was therefore illegal. Right now, it's still unknown whether the OMB will seek to appeal this decision. If it does do so, it may also seek a stay of the court’s order, pending the appeal. In any event, this decision illustrates that pay equity is still on the radar. Employers should take this as a wake-up call in order to look at pay equity throughout their organization, and consider conducting a pay equity audit." – Ann Knuckles Mahoney, Associate, Epstein Becker Green

For now, the Equal Employment Opportunity Commission has said that, for the 2018 report’s pay data collection, it will require Component 1 data detailing the demographics of an employer’s workforce but not the new Component 2 wage and hours data. However, there is legal pushback on this, so those requirements could still change.

4. State Legislatures Focus on Sexual Harassment Training in Restaurants

A new regulatory trend is beginning to emerge in the hospitality sector. New Jersey and Illinois have both proposed legislation that requires restaurants, specifically, to institute sexual harassment training policies. Unlike in California and New York, there is no legislation in either state requiring this sort of training for all private-sector employers. It’s too soon to tell yet whether sexual harassment regulations are beginning to get more industry specific, or if we’re simply seeing a reaction to recent scandals in high-profile restaurants. We’ll be monitoring developments in this area.

5. Tip of the Week

Aney Chandy, Executive Director, Senior Counsel for Labor and Employment at Allergan, shares some tips on how employers can address gender identity inclusion in the workplace:

"Evaluate and update your policies. A good first step is to update your anti-harassment or anti-discrimination policy by including gender identity or expression among the protected categories, even where it may not be required by law. ..."

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