Families First Coronavirus Response Act Tax Credit Extension in 2021

Employment/Labor GroupEmployment/Labor Group

The Families First Coronavirus Response Act (FFCRA) sunsetted on December 31, 2020, but some provisions remain active.

On Sunday, December 27, 2020, former President Donald Trump signed a bipartisan pandemic relief bill into law. Because the leave provisions of the FFCRA were not extended employers were no longer required to provide leave under the FFCRA in 2021.

However, as part of this relief package the tax credit for FFCRA leave, which reimburses employers for FFCRA leave taken by employees, was extended through March 31, 2021. Therefore employers who voluntarily choose to provide employees with FFCRA leave may do so until March 31, 2021 and receive tax credit for the leave. Of course, employers may instead choose to adopt their own policies to grant paid or unpaid leave for COVID-related purposes or simply allow employees to use their existing leave.

If employers do choose to provide FFCRA through March 31, 2021 they should be aware that employees are not granted FFCRA leave in addition to what they received in 2020. Thus if an employee has exhausted 80 hours of paid sick leave and 12 weeks of expanded family medical leave in 2020 they will not receive additional leave in 2021. Moreover, there are no changes to eligibility, purposes of leave, caps on usage, or documentation requirements.

Lastly, state or local laws may impose additional requirements for COVID-19 related leave and employers are advised to ensure that they act in compliance with any applicable laws.

For more information, contact one of our employment attorneys.

D.C. Passes Ban on Non-Compete Agreements

Josh SchmandJosh Schmand

On December 15, 2020, the District of Columbia Council unanimously passed the Ban On Non-compete Agreements Amendment Act Of 2020. The Act generally prohibits the use of non-compete provisions in employment agreements and workplace policies. The Act will soon become law as D.C. Mayor Muriel Bowser is likely to sign the Act and Congress is unlikely to pass a joint resolution of disapproval.

The ban on non-competes in the Act will apply to all employers in the District and nearly any employee working in the District regardless of how much they are earning. Employers will also have to provide written notice of the Act to all of their employees.

What is a non-compete agreement?

Under the Act, a “non-compete provision” is a written agreement between an employer operating in the District and any individual who performs work (or who an employer reasonably anticipates will perform work) in the District that prohibits the individual from: (1) being simultaneously or subsequently employed by another person, (2) performing work or providing services for pay for another person, or (3) operating the individual’s own business.

The Act does not apply to otherwise lawful provisions that restrict an individual from disclosing their employer’s confidential, proprietary, or sensitive information, client list, customer list, or trade secrets. The Act also does not apply to otherwise lawful provisions contained within or executed contemporaneously with an agreement between the buyer and seller of a business where the seller agrees not to compete with the buyer’s business.

The Act does not address solicitation of employees or customers, so employers should review non-solicitation agreements with counsel to ensure compliance.

What does the Act prohibit?

Under the Act, no employer in the District of Columbia may require or request that an employee performing work in the District (or who an employer reasonably anticipates will perform such work) sign an agreement that includes a non-compete provision. Additionally, no employer in D.C. may have a workplace policy that similarly prohibits an employee from: (1) being employed by another person, (2) performing work or providing services for pay for another person, or (3) operating the individual’s own business. Any such agreements entered into after the Act becomes law will be void and unenforceable in court.

The Act also prohibits employers from retaliating (or threatening to retaliate) against employees for: (1) refusing to agree to a non-compete provision, (2) failing to comply with a non-compete provision or workplace policy made unlawful by the Act, (3) asking, informing, or complaining to an employer, a coworker, a lawyer, or governmental entity about the existence, applicability, or validity of a non-compete provision or a workplace policy that the employee reasonably believes is prohibited by the Act, or (4) requesting information that the Act requires be provided from an employer.

Are there any exceptions?

The ban on non-competes in the Act do not apply to:

  1. The District of Columbia government or the United States government;
  2. Volunteers engaging in the activities of an educational, charitable, religious, or nonprofit organization;
  3. Lay members elected or appointed to office within the discipline of any religious organization and engaged in religious functions;
  4. Individuals employed as a casual babysitter in the residence of their employer; and
  5. Licensed physicians that perform work on behalf of an employer engaged primarily in the delivery of medical services earning at least $250,000 per year.*

* Employers seeking to have medical specialists sign a non-compete agreement must provide the document to the employee for review at least 14 days before executing the agreement along with written notice of the Act.

Are there notice requirements?

Employers must provide their employees with the following text: “No employer operating in the District of Columbia may request or require any employee working in the District of Columbia to agree to a non-compete policy or agreement, in accordance with the Ban on Non-Compete Agreements Amendment Act of 2020.”

Employers must provide existing employees with this notice, in writing, within 90 days after the Act becomes law. Going forward, employers have seven days after an individual becomes an employee to provide the required written notice. And, employers have 14 days to provide the notice in response to a written request from an employee.

What are the penalties?

In addition to having a non-compete provision becoming void and unenforceable in court, employees who are asked to sign a non-compete agreement banned by the Act or who suffer retaliation from an employer for activities prohibited by the Act may file a complaint with the Mayor or take action in civil court.

The Mayor may assess administrative penalties of $350 to $1,000 for each violation, except that penalties for retaliation against employees shall be greater than $1,000. The Mayor and the Office of the Attorney General (OAG) may also require employers to submit records showing compliance with the Act upon demand at any reasonable time.

Employers that violate the Act shall be liable for relief payable to each employee of $500 to $1,000 for each violation, and at least $3,000 to each employee for subsequent violations. But, employers that attempt to enforce newly void or unenforceable non-compete provisions shall be liable for relief payable to each employee of at least $1,500, and at least $3,000 to each employee for subsequent violations. And, employers that retaliate against employees in violation of the Act shall be liable for relief payable to each employee of $1,000 to $2,500 for each violation, and at least $3,000 to each employee for subsequent violations.

How does the Act compare to Maryland and Virginia’s restrictions?

The original proposal of the legislation introduced in October 2019 prohibited the use of non-compete agreements for employees whose rate of pay was less than or equal to three times the minimum wage, similar to the restrictions in neighboring Virginia and Maryland, which have prohibited non-compete agreements for certain “low” wage earners. However, as discussed above, if the Act becomes law, it will expand the ban to nearly any employee in the District and become one of the Nation’s strictest laws concerning bans on non-compete agreements.

For more information, contact Josh at 301-347-1273 or jcschmand@lerchearly.com.

EEOC Issues Guidance For Employers Considering Mandatory COVID-19 Vaccine Policies

Michael NearyMichael Neary

On December 16, 2020, the Equal Employment Opportunity Commission (“EEOC”) updated its COVID-19 guidance to address how a COVID-19 vaccine interacts with the equal employment opportunity laws enforced by EEOC. We are likely months away from pharmaceutical companies making the vaccine generally available to the public. But the EEOC guidance is a good resource for employers thinking through whether to institute a mandatory COVID-19 vaccine policy when that day comes.

EEOC Provides a Framework for Mandatory Vaccine Programs

There are three key takeaways from the guidance. First, a policy mandating that employees receive the COVID-19 vaccine is possible provided disability and religious accommodation requests are carefully evaluated. Second, the pre-screening questions that must be asked before a vaccine is administered will likely compel many employers considering a mandatory program to institute a voluntary one instead or to require employees to receive the vaccine elsewhere. Finally, the COVID-19 situation in the country may change dramatically by the time a vaccine is widely available, which could substantially alter EEOC’s guidance. Employers should consider the guidance as they plan but continue to monitor the issue before finalizing any vaccine policies.

EEOC Answers Common Questions Employers Are Asking About Whether To Mandate A Vaccine

The updated EEOC guidance answers a series of questions related to how a mandatory vaccine policy interacts with equal employment opportunity laws. Below is a summary of the questions and answers provided by EEOC.

  • Is an employer administering a COVID-19 vaccine, directly or through a vendor hired by the employer, performing a medical examination under the Americans with Disabilities Act (“ADA”)?
    • Answer: No, with a catch. A medical examination under the ADA is a “a procedure or test usually given by a health care professional or in a medical setting that seeks information about an individual’s physical or mental impairments or health.” While administering the vaccine is not a medical test, pre-screening questions would likely uncover underlying physical impairments and constitute a medical examination under the ADA. Under the ADA, employers can perform medical examinations only if they are “job-related and consistent with business necessity.” To meet this standard, employers would need a reasonable basis, based on objective evidence, to conclude an employee that does not receive the vaccine because of a refusal to answer the pre-screening questions poses a direct threat to the health or safety of the employee or others. COVID-19 conditions on the ground at the time of the mandatory program would dictate whether an employer could meet this standard.
    • The EEOC guidance identifies two ways around this issue. First, an employer could make the program voluntary instead of mandatory. The pre-screening questions do not need to satisfy the job-related and consistent with business necessity standard if the vaccine program is truly voluntary. Second, an employer could mandate employees receive the vaccine from third parties not connected to the employer. Under such a framework, since the third party would ask the pre-screening questions and not the employer, the employer need not satisfy the job-related and consistent with business necessity standard of the ADA. An employer may require an employee to provide proof of having received the vaccine without implicating the ADA so long as the employer makes clear the proof should not disclose underlying physical or mental impairments.
  • If an employer institutes a mandatory vaccine policy, how must it respond if an employee refuses because of a disability?
    • Answer: The employer must perform an individualized assessment under the ADA to determine whether the unvaccinated employee poses a direct threat to the workplace because of a “significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.” In analyzing this question, four factors should be considered: (1) the duration of the risk; (2) the nature and severity of the potential harm; (3) the likelihood that the potential harm will occur; and (4) the imminence of the potential harm. Assuming a direct threat is found, the employer could only exclude the employee if “there is no way to provide a reasonable accommodation (absent undue hardship) that would eliminate or reduce this risk so the unvaccinated employee does not pose a direct threat.” If an employer finds that there is no way to provide a reasonable accommodation, the employer can bar the employee from the workplace but cannot necessarily terminate. Before terminating, the employer would need to determine whether other accommodations are available. Potential accommodations to consider are remote work, paid leave, or an unpaid leave of absence.
  • If an employer institutes a mandatory vaccine policy, how must it respond if an employee refuses because of a sincerely held religious belief?
    • Answer: The employer should assume the religious belief is sincerely held and provide a reasonable accommodation to its mandatory vaccine program for the religious belief, practice, or observance unless it would pose an undue hardship under Title VII of the Civil Rights Act. The undue hardship analysis under Title VII asks whether the accommodation has more than a de minimis cost or burden on the employer. In rare circumstances, an employer having an objective basis to question the nature of the religious belief or the employee’s sincerity in that belief can ask for further information. If the employer cannot provide an accommodation because of undue burden, it can bar the employee from the workplace, but must consider whether alternative accommodations would allow the employee to remain employed without entering the workplace.
  • Is the Genetic Information Nondiscrimination Act (“GINA”) implicated when an employer administers a COVID-19 vaccine to employees or requires employees to provide proof that they have received a COVID-19 vaccination?
    • Answer: No, with a catch. Title II of GINA prohibits employers from (1) using genetic information to make decisions related to the terms, conditions, and privileges of employment; (2) acquiring genetic information except in six narrow circumstances, or (3) disclosing genetic information except in six narrow circumstances. Administering the vaccine or requiring proof that an employee received one does not implicate GINA because neither involves “the use of genetic information to make employment decisions, or the acquisition or disclosure of genetic information as defined by the statute.”
    • The pre-screening questions, however, may implicate GINA. The pre-screening questions for a publicly available COVID-19 vaccine are not clear. If those questions ask for any of the following they would implicate GINA:
      • Information about an individual’s genetic tests;
      • Information about the genetic tests of a family member;
      • Information about the manifestation of disease or disorder in a family member (i.e., family medical history);
      • Information about requests for, or receipt of, genetic services or the participation in clinical research that includes genetic services by the an individual or a family member of the individual; and
      • Genetic information about a fetus carried by an individual or family member or of an embryo legally held by an individual or family member using assisted reproductive technology.
    • If the pre-screening questions ask for this information, EEOC advises it would be wise for employers implementing a mandatory program not to administer the vaccine directly or through a third-party vendor but to require employers to obtain the vaccine elsewhere. When asking for proof of vaccination, the employer should make clear employees are not to provide GINA related information. Such a warning protects an employer from liability if the employee provides GINA protected information along with any proof of vaccine receipt.

For more information, contact Michael at 301-657-0740 or mjneary@lerchearly.com.

Avoid Liability with Express Disclaimers in Employee Manuals and Handbooks

Josh SchmandJosh Schmand

Last month, in Sanchez v. Whole Foods Mkt. Grp., Inc., the United States District Court for the District of Maryland reaffirmed the general rule that express disclaimers in employee manuals and handbooks will protect employers from creating unintended implied contracts under Maryland law.

This is a good reminder of the importance of including clear and conspicuous disclaimers, even as simple and overt as “this manual is not a contract,” because absent such language employee manuals and handbooks can create contractual obligations for employers.

Employee manual was not a contract under Maryland law

Employees supervised by Ms. Sanchez complained about her managerial style. They alleged that she touched employees inappropriately and that she intimidated and harassed them. Whole Foods placed Ms. Sanchez on administrative leave, investigated the allegations, concluded that she was not meeting the expectations of her role, and presented her with a Final Written Warning for “repeated inappropriate behavior.” Her offense constituted a “major infraction” under the employee manual.

After resuming her job, Whole Foods gave Ms. Sanchez an action plan for improving conditions within the team and performance in general. However, Ms. Sanchez failed to achieve the objectives set forth in the plan, and Whole Foods terminated her employment. In turn, Ms. Sanchez filed a lawsuit alleging, among other claims, that Whole Foods breached its contractual obligations arising from its employee handbook. Specifically, Ms. Sanchez argued that Whole Foods failed to follow its own progressive discipline policy contained in the employee handbook and that she was terminated without verbal counseling, written reprimand, or a legitimate final warning.

Whole Foods argued in response that the employee handbook that Ms. Sanchez relied on repeatedly states that employees are employed at-will and that the employee handbook creates no contractual rights or obligations. And, Whole Foods highlighted that it had its employees, including Ms. Sanchez, sign a similar disclaimer every time a policy in the employee handbook was updated. The Court agreed with Whole Foods (and the United States District Court for the District of Columbia’s similar 2018 opinion) that, based on the repeated express disclaimers, the employee handbook was not a contract under Maryland law.

Progressive discipline policies allow employers to use their discretion

Even though the Court found that no contract existed based on the employee manual, it addressed Ms. Sanchez’s other arguments. In response to one of Ms. Sanchez’s arguments, that Whole Foods’ corrective action policy contained in the employee handbook required progressive discipline before employees can be terminated, the Court noted that the policy gave Whole Foods the discretion and flexibility to use differing disciplinary procedures and to terminate employees without prior notice. The corrective policy defined different types of infractions, and carved out situations where counseling and warnings were not required.

Takeaways

Besides ensuring that their employee manuals and handbooks actually have an express disclaimer that nothing contained therein creates any contractual rights or obligations, employers should also:

  • Place an express disclaimer on the first page (or in the preface or introduction) to indicate that it applies to the employee manual or handbook;
  • Repeat the express disclaimer throughout the employee manual or handbook;
  • Make sure that the express disclaimer is prominently highlighted; and
  • Have employees sign and acknowledge the express disclaimer.

Because of the recent updates to Maryland’s employment laws (discussed throughout Employment Edge), now is the perfect time for employers to review their employee manuals and handbooks for the appropriate disclaimer language needed to avoid potential contractual liability.

For more information, contact Josh at 301-347-1273 or jcschmand@lerchearly.com.

Montgomery County Council Enacts Legislation Amending the County’s Ban the Box Law

Michael NearyMichael Neary

Well that happened fast. As discussed in my prior article, the Montgomery County Council was considering a bill to amend the County’s Ban the Box law first introduced in late July. Since mid-September, the Council was awaiting a report on the merits of the bill from the Health & Human Services and Public Safety Committees. The Council received that report on November 10 and promptly voted to pass the bill the same day. The County Executive signed the bill quickly thereafter on November 20. The amendments to the County’s Ban the Box law become effective on February 19, 2021.

The sole change to the draft bill recommended by the two committees was to prohibit employers from considering a conviction for a first offense of misdemeanor Second Degree Assault instead of the prior language prohibiting employers from considering a misdemeanor or felony Second Degree Assault conviction when making employment decisions.

During the November 10, 2020 hearing on the bill, two further changes to the draft legislation were approved by the Council. First, Council Member Jawando moved to amend the bill so that it would apply to any employer with one employee, even if part-time, in the County. Previously, the bill stated it applied if an employer had one full-time employee in the County. This amendment passed 9-0. Second, Council Member Albornoz moved to remove entirely a first conviction of Second Degree Assault from the list of offenses that an employer can never ask about. The expressed rationale behind this amendment was that a misdemeanor Second Degree Assault conviction often arises from a domestic violence offense. Council Member Albornoz’s amendment to the bill passed 5-4. The Council then voted to pass the amended bill 9-0.

As such, once the bill becomes effective, any employer employing one individual, even if part-time, in the County will have to comply with the mandates of the Ban the Box law. All such employers will have to wait until after the employer makes a conditional offer of employment before asking about criminal histories or running criminal background checks. Further, employers can no longer ask about or consider the following criminal offenses:

  1. Any arrest records that did not lead to a conviction;
  2. A first conviction for:
    a. Trespass; or
    b. Disturbing the peace.
  3. A conviction for a misdemeanor if at least three years have passed since:
    a. The date of conviction; and
    b. The date any period of incarceration for the misdemeanor has ended;
  4. Juvenile records deemed confidential by statute; or
  5. Convictions that have been expunged.

Employers also cannot inquire about these offenses when considering current employees for promotions.

The legislation delegates to the County Executive responsibility for preparing implementing regulations and regulations necessary to notify employees and employers of their rights and responsibilities under the legislation.

Employers in Montgomery County should act now to update their hiring processes to ensure compliance with the amendments to the County’s Ban the Box law before they go into effect on February 19, 2021.

For more information, contact Michael at 301-657-0740 or mjneary@lerchearly.com.

Voluntary Acceptance of a Transfer May Waive Employees’ Claims in Maryland and Virginia

Recognition of “Constructive Demotion” Claims Seems Imminent.

Lauri ClearyLauri Cleary

In October, the Fourth Circuit Court of Appeals confirmed in Laird v. Fairfax County, Virginia, that an employee voluntarily accepting a lateral transfer to another position (there, to settle a disability discrimination claim) may not be able to establish discrimination or retaliation just because the new job is not all she had hoped.

To make out a viable claim, the employee must suffer an “adverse employment action” such that the transfer resulted in “a significant detriment” to the employee. Whether an employee’s dissatisfaction rises to the level of “significant detriment” is a factual issue determined on a case-by-case basis.

A transfer must cause a “significant detriment” to be actionable

After working in the new position for some months, Ms. Laird came to believe she had been demoted. She found her new position “boring” and to be a “thinkless job, just data entry,” and hurt her potential for future promotion.

She sued the County for discrimination and retaliation under the Americans with Disabilities Act. The federal trial judge in Alexandria entered judgment against her, finding her disappointment, however genuine, was not significant enough to establish a significant detriment.

After reviewing all facts anew, the Fourth Circuit Court of Appeals agreed. Offering no real guidance on what establishes a “significant detriment,” the Court of Appeals discussed what does not. In her new job, Ms. Laird received the same compensation, asked for and received changes to the new title and duties, and received additional accommodations of her disability.

The Court noted near the end of its opinion that she had abandoned her argument that intolerable discriminatory conditions in her original job had compelled her to accept a transfer—in essence that she was forced to accept a demotion. Having waived that argument, she could no longer claim that the transfer itself had been discriminatory or retaliatory.

A transfer that is not “voluntary” may be a “constructive demotion”

Had she not abandoned her “constructive demotion” argument, Ms. Laird may have prevailed by claiming acceptance of the transfer had not been “voluntary.”

The majority did not address that potential, but a member of the three-judge panel did in a concurrence. Observing that the DC Circuit (and every other circuit court of appeals to address the issue) has recognized constructive demotion claims, and noting that this circuit already has recognized claims for “constructive discharge” (for employee left with no option but to resign), the concurrence concluded: “Logic dictates that if a demotion can constitute a constructive discharge, then a constructive demotion can similarly constitute a constructive demotion.”

Thus, as in DC, an employee who can allege a work experience so intolerable as to leave no option but to accept a transfer likely will have a viable claim for constructive demotion claim in MD and VA.

Employer takeaways

Making a lateral transfer of a (current or potential) disability claimant to settle claims of discrimination and/or retaliation may not be an easy panacea. The transfer must be both “voluntary” and it not trade one “significant detriment” (discrimination or retaliation) for another (a significantly inferior position).

For more information, contact Lauri at 301-657-0176 or lecleary@lerchearly.com.