Maryland: Updates to Non-Compete Prohibitions and Pay Transparency Requirements

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  • Non-compete and conflict-of-interest clauses are prohibited for certain veterinarian and health care professionals in the state of Maryland.
  • Under expanded pay transparency requirements, employers will be required to include a wage range and a general description of the benefits and other compensation offered for a position in any public or internal job posting.

Discussion

The Maryland Governor recently signed two pieces of legislation that will impact pay transparency and non-compete requirements in the state. Each is summarized below.

Non-Compete Agreements for Veterinary and Healthcare Professionals

Under HB 1388, non-compete and conflict-of-interest clauses are prohibited for certain veterinarian and health care professionals in the state of Maryland. Maryland already limits non-compete restrictions for lower-wage workers, and this new law continues a trend of narrowing the scope of employees who may be subject to a non-compete. The law becomes effective for covered veterinary practitioners and technicians on June 1, 2024, and for covered health care providers on June 1, 2025.

Specifically, the law prohibits non-compete provisions for individuals who are: (1) required to be licensed under Maryland’s Health Occupations Article (e.g., physicians, physician assistants, nurse practitioners, nurses, dentists, pharmacists, psychologists, optometrists, etc.), employed in a position that provides direct patient care, and earn equal to or less than $350,000 in total annual compensation; or (2) licensed as a veterinary practitioner, veterinary technician pursuant to Title 2, Subtitle 3 of Maryland’s Agriculture Article.

In addition, for covered health care providers who earn more than $350,000 in total annual compensation, the law states that covenants for these higher-earning health providers cannot exceed one year from the last day of employment and may not restrict the provider from working a geographic region greater than 10 miles from their primary place of employment. The law also provides that employers must provide notice to patients of higher-earning providers, if asked, about the new location where the provider will be practicing.

Pay Transparency Requirements

Under HB 649, and effective October 1, 2024, employers will be required to include a wage range and a general description of the benefits and other compensation offered for a position in any public or internal job posting. If a job posting was not made available to an applicant, an employer will be required to share the pay and benefits information before discussing compensation with the applicant, and at any other time upon the applicant’s request.

The law applies to any position that will be physically performed at least partly in Maryland. A disclosed wage range must be set in good faith by reference to: (1) any applicable pay scale; (2) any previously determined pay range for the position; (3) the pay range of an individual holding a comparable position at the time of the posting; or (4) the budgeted amount for the position.

The law directs the Maryland Division of Labor and Industry to develop a form that employers can use to communicate the required pay and benefits information. Employers will be able to comply with the law by including the completed form in each public or internal job posting and otherwise making it available to applicants as required.

Employers must keep a record of their compliance with the new pay disclosure requirements for each position for at least 3 years after the position is filled, or if the position is not filled, for 3 years from when the position was initially posted. The law does not include any other detail regarding specific documentation employers will need to maintain to demonstrate their compliance. The law also includes an anti-retaliation provision, prohibiting employers from refusing to interview, hire, or employ an applicant, or promote or transfer an existing employee because they requested information on wage ranges, or for refusing to provide their wage history, or for exercising any other right under the law.

Action Items

  1. Review employment agreements with legal counsel to determine compliance with expanded non-compete prohibitions.
  2. Review job postings to determine compliance with pay transparency requirements and establish procedures to comply with pay transparency recordkeeping requirements.
  3. Have appropriate personnel trained on the requirements.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase

New York: Legislative Update

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  • Effective January 1, 2025, the existing New York State Paid Sick Leave (PSL) Law is expanded to require employers to provide paid prenatal personal leave (PPPL).
  • The Budget has set the sunset date for the New York State COVID-19 Emergency Leave Law as July 31, 2025.
  • Effective June 19, 2024, employees are entitled to a paid 30-minute break in addition to existing paid break time and unpaid mealtime in order to express breast milk at work.

Discussion

The Fiscal Year 2025 New York State Budget (Budget) was approved on April 20, 2024. It contains several leave and accommodation entitlements which impact employers.

 

Paid Prenatal Personal Leave

Effective January 1, 2025, the existing New York State Paid Sick Leave (PSL) Law is expanded to require employers to provide paid prenatal personal leave (PPPL). The entitlement is 20 hours during any 52-week calendar period. The entitlement is in addition to sick leave provided under the PSL law which can result in a total of 60 hours or 76 hours depending on employer size. PPPL can be used for healthcare services during pregnancy or related to pregnancy, including physical examinations, medical procedures, monitoring and testing, and discussions with a health care provider related to pregnancy. Employees must be paid at their regular rate of pay and in hourly installments. There is no requirement to payout unused PPPL upon separation. However, the law is silent on documentation, unused PPPL at the end of the year, and carryover.

 

COVID-19 Emergency Leave Law

The Budget has set the sunset date for the New York State COVID-19 Emergency Leave Law as July 31, 2025. Until that date, employees can use the leave when subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19.

 

Lactation Accommodation

Effective June 19, 2024, employees are entitled to a paid 30-minute break in addition to existing paid break time and unpaid mealtime in order to express breast milk at work. This paid break time is available for up to three years after the birth of a child.

This is all the known information about these expanded requirements. Regulations and administrative guidance are forthcoming for these laws so employers should stay aware of potential updates.

 

Action Items

  1. Review and update leave policies.
  2. Review lactation accommodations and break requirements.
  3. Train appropriate personnel on the requirements.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase

Oregon: Expanded “Cat’s Paw” Theory of Liability

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April 17, 2024

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  • The Oregon Court of Appeals ruled that the “cat’s paw” theory of liability applies to joint employers regardless of whether the biased individual was subordinate to the co-employer’s decisionmaker or employed by the same entity.
  • Oregon employers with contingent workers or staffing agreements should discuss their arrangements with legal counsel to determine potential liability for claims under this theory of liability.

Discussion

Employers can still be liable for discrimination and retaliation where a biased individual sways the employer to make an adverse employment action. This is called the “cat’s paw” theory, which generally means that a decisionmaker who acted based on a non-decisionmaker’s influence, where the non-decisionmaker has a discriminatory intent, the employer of the decisionmaker can still be liable for employment discrimination. The non-decisionmaker typically must have significant influence over the decision that leads to an adverse action.

In McClusky v. City of North Bend, the Oregon Court of Appeals ruled that the “cat’s paw” theory of liability applies to joint employers regardless of whether the biased individual was subordinate to the co-employer’s decisionmaker or employed by the same entity. Here, an employee was hired as the Technology Systems Manager under an intergovernmental agreement between the cities of North Bend and Coos Bay, where Coos Bay reimbursed North Bend for 100% of the costs of the employee’s salary, benefits, and office space. However, the employee worked out of the North Bend Public Library and was supervised and evaluated by North Bend managers and human resources. The employee raised concerns about the Coos Bay Extended Services Office Director’s (Director) plan to move the local network to a cloud-based service through a process that was in violation of the laws of the district. The employee was also ordered to deliver IT information to an outside contractor, but he objected and was eventually terminated by North Bend’s human resources for insubordination and unprofessional conduct. The employee alleged whistleblower retaliation claims against North Bend.

The court reversed the trial court’s decision to dismiss the claims against North Bend due to the cat’s paw doctrine. The ruling was based on the theory that North Bend knew or should have known the Coos Bay Director’s alleged bias but failed to take corrective action. Therefore, the Director’s alleged bias could be imputed to North Bend. For the first time, the court ruled that the cat’s paw theory applies “when a supervisor for a joint employer is the allegedly biased employee, so long as the plaintiff produces evidence that the allegedly biased employee held influence over the adverse employment decision.”

In this case, the evidence showed the Director acted as the employee’s supervisor in connection with North Bend’s employees and held influence over the employee’s North Bend supervisor. The Director had been able to edit a North Bend performance improvement plan to say that the employee “has a tendency to incorrectly assume the worst about his colleagues, which often leads him to improperly accuse them of wrongdoing.” This created a genuine issue of material fact which should have allowed the case to proceed. The court also noted that North Bend could have taken corrective action without including the Director in its termination decisions. Oregon employers with contingent workers or staffing agreements should discuss their arrangements with legal counsel to determine potential liability for claims under this theory of liability.

 

Action Items

  1. Review joint employer agreements and relationships with legal counsel.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase

May Updates

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Ninth Circuit: Business to Business Arbitration is Not Covered by FAA Exemption

On April 10, 2024, in Fli-Lo Falcon, LLC v. Amazon.com, Inc., the Ninth Circuit Court of Appeals stated that the transportation exemption to the Federal Arbitration Act (FAA) does not apply to business entities. The FAA generally enforces arbitration agreements, but exempts “contracts of employment” of any “class of workers engaged in foreign or interstate commerce.” Specifically, business entities do not qualify as a “class of worker” engaged in foreign commerce under the FAA. Additionally, contracts of employment do not include business to business agreements. Covered employment contracts “must have a qualifying worker as one of the parties.”

 

Phoenix, AZ: New Heat Illness Prevention Requirements for City Contractors

On March 26, 2024, Phoenix adopted an Ordinance that requires any contractor whose employees and contract workers perform work in an outdoor environment under a City contract, lease or license to use heat safety and mitigation plans to prevent heat-related illnesses and injuries in the workplace. The heat safety plan must include: (1) availability of sanitized cool drinking water free of charge at locations that are accessible to all employees and contract workers; (2) ability to take regular and necessary breaks as needed and additional breaks for hydration; (3) access to shaded areas and/or air conditioning; (4) access to air conditioning in vehicles with enclosed cabs with such access to functioning air conditioning required by no later than May 1, 2025; (5) effective acclimatization practices; and (6) conduct training and make it available and understandable to all employees and contract workers.

 

California: Stock Options are Not Wages

On April 8, 2024, in Shah v. Skillz, Inc., the California Court of Appeal ruled that stock options are not wages. “Wages” refers to an “amount fixed or ascertained.” Here, stock options are not “amounts” since they are actually contractual rights to purchase stock, and they aren’t “fixed or ascertained” because the value of shares varies before an option is actually exercised. The court distinguished stock options from restricted stock shares in that the latter have an ascertainable value and are actually issued to employees.

 

District of Columbia: Court Rejects NLRB Surveillance Decision

In the case Sterns Produce Company v. NLRB, the D.C. Circuit Court reversed a decision from the National Labor Relations Board (NLRB) and rejected the NLRB’s reasoning that a company had engaged in unlawful surveillance simply by directing a driver to uncover his onboard camera. The court found that the NLRB lacked “substantial evidence” to support its decision and stated that determination of whether the NLRB can satisfy its burden depends on “whether on this record it would have been possible for a reasonable jury to reach the Board’s conclusion.” Specifically, the court said that the employee’s status as a known union organizer “cannot automatically render suspect any interaction between him and management in perpetuity.” The court also observed that a company’s opposition to unions, by itself, is insufficient to establish illegal motivation for any particular decision. Instead, there must be something more to connect the employer’s animus to an adverse action. The Sterns Produce decision comes as the most recent of several employer-friendly NLRB appeals to federal court, and specifically concerning employee surveillance.

 

Florida: Changes to Working Hours for Minor Employees

Under Florida’s HB 49, several significant changes to the working conditions and hours for minor employees are set to take effect on July 1, 2024. Specifically, 16 and 17-year-olds will be permitted to work more than 30 hours a week while school is in session with a waiver from parents, legal guardians, and/or school superintendents, and will be permitted to work shifts exceeding eight hours on Sundays and holidays regardless of whether school is in session the following day. Under the amended law, 16 and 17-years-olds who work eight hours or more per day must receive at least a 30-minute lunch break after four hours worked. Finally, homeschooled and virtual schooled 16 and 17-year-olds will be permitted to work without any of the hour limitations Florida places on minors including during the normal school day. Importantly, these changes do not apply to 14 or 15-year-old minor employees, who continue to be subject to restrictions on the types of duties performed and hours worked. In addition to changes to the laws governing minor’s working hours, Florida also amended the restrictions on what age an individual must be to work in Florida’s adult entertainment industry. Also effective July 1, 2024, the minimum age permitted to work in an adult entertainment establishment is 21-years old (previously 18). This includes bookstores, theatres, special cabarets, and unlicensed massage establishments.

 

Idaho: Civil Immunity Expanded for Employers Permitting Carrying of Firearms

As of July 1, 2024, SB 1275 will extend civil immunity to employers with policies that either allow or don’t allow employees to carry firearms on the business premises. This expands employer protections from firearm storage in personal motor vehicles while on business premises.

 

Indiana: Amended New Hire Reporting Requirements

Effective July 1, 2024, under Indiana’s SB 148, a newly hired employee in Indiana is redefined as an employee who (1) has not previously been employed by the employer; or (2) was previously employed by the employer but has been separated from that prior employment for at least 60 consecutive days. Additionally, an employer must report the following for new employees: (1) the employee’s name, address, and Social Security Number; (2) date the employee first performed work for pay; (3) the employee’s current primary standard occupational classification code; (4) the employee’s starting pay; and (5) the employer’s name, address and federal tax identification number. These reports are filed electronically with the Indiana Department of Workforce Development.

 

Lehigh County, PA: Multiple Employment Ordinances Implemented

Effective June 1, 2024, Lehigh County’s Human Relations Ordinance prohibits employment discrimination on the basis of protected characteristics, restricts criminal history screenings, and prohibits salary history inquiries. The Ordinance prohibits actual or perceived employment discrimination on the basis of race; ethnicity; color; religion; creed; national origin or citizenship status; ancestry; sex (including pregnancy, childbirth, breastfeeding and related medical conditions); gender identity; gender expression; sexual orientation; genetic information; marital status; familial status; holding of a GED rather than a high school diploma; physical or mental disability; relationship or association with a disabled person; source of income; age (35 and older); height; weight; veteran status; use of guide or support animals and/or mechanical aids; and domestic or sexual violence victim status.

Employers also cannot ask job applicants, on an employment application or prior to the initial interview, whether they have ever been convicted of a crime. This includes a prohibition on considering conviction records unrelated to the job position. However, employers can state that the position requires a clean driving record or passing a child abuse clearance check. Notice to the applicant is required if employment is denied based on criminal history. Lastly, employers cannot ask applicants their salary history either from current or past employment. Employers in Lehigh County should update their discrimination and harassment policies as well as their hiring procedures.

 

Utah: Expanded Religious Accommodation Requirements

Effective May 1, 2024, the Utah Antidiscrimination Act has been amended to allow employees to express “religious or moral beliefs and commitments in the workplace” as long as they do so in a “reasonable, non-disruptive, and non-harassing way.” Employers are also prohibited from making employees engage in “religiously objectionable expression” which is defined as “expression, action or inaction that burdens or offends a sincerely held religious belief, including dress and grooming requirements, speech, scheduling, prayer, and abstention, including abstentions relating to healthcare.” Employees who believe they are being required to do so may request an accommodation unless such a request would cause an undue burden. The Amendment also prohibits retaliation against employees who express their religious beliefs outside the workplace unless there is a direct conflict with the essential business-related interests of the employer. There is also an exception for employers with fewer than 15 employees from having to provide scheduling accommodations.

 

Virginia: New Notice of Right to Dispute Workers’ Compensation Claim

Under Virginia’s SB 241 and effective July 1, 2024, if a covered employer or the employer’s insurer denies a covered employee’s request for workers’ compensation benefits, the employer or the insurer must include in its letter denying benefits a notice that the employee has a right to dispute the claim denial through the Virginia Workers’ Compensation Commission.

 

West Virginia: Amendments to Unemployment Compensation Law

Under SB 841, effective July 1, 2024, the West Virginia Unemployment Compensation Law is amended to lower the taxable wage base from $9,521 to $9,500 and to create the Jobs and Reemployment Act, which: (1) requires individuals to conduct at least four work search activities weekly; (2) requires employers to report individuals who refuse to accept an employment offer or who leave employment within six weeks; and (3) allows individuals to work part-time at a lower pay rate without reducing benefits.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase