Lots going on in the world and so we couldn’t just let you all leave for the long weekend without a newsletter. Hopefully you’ll be celebrating ‘Merica somewhere that’s not besieged by either thunderstorms or a poor air quality index (again, seriously Canada?). But wherever you find yourself, enjoy this edition that’s bursting from sea to shining sea with updates. We’re covering two topics you normally never ask your employees about: pregnancy and religion. But first, it’s looking like curtains for a well-known contractual provision (hint: let the competition begin!). Enjoy and happy Fourth!
Pour One Out For Non-Competes
Come employers and owners throughout the land, (and join us in criticizing these recent developments regarding non-compete clauses we sort of understand), because the times, they are-a-changin’.
Long a staple of employment contracts and severance agreements, recently, there have been significant developments both on the federal and state fronts signaling a shift in the landscape of non-compete agreements, and it’s seriously looking like their days are numbered.
First, let’s focus on our good friends at the National Labor Relations Board (“NLRB”). Fresh off their takedown of confidentiality and non-disparagement clauses in severance agreements, on May 30, 2023, Jennifer Abruzzo, the NLRB General Counsel, sent a memo to all Regional Directors asserting that, in her view, non-compete provisions generally violate the National Labor Relations Act (the “Act”). Abruzzo argues that such provisions can unduly limit an employee’s ability to seek better working conditions or employment opportunities, thereby infringing employees’ rights under Section 7 of the Act.
This move is just the latest part of a larger trend at the NLRB. And while NLRB decisions and memos have limited applicability (for example, the actions regarding severance agreements only apply to non-supervisory personnel), they do outline theories that the General Counsel will prosecute. Plus, these actions are making headlines and it certainly seems like we’re heading for some national law regarding non-competes. But before you New York employers start getting all warm and comfortable thinking these NLRB thingies don’t apply to you . . .
Recently, New York joined the fray, with the New York State Legislature passing a bill that, if signed by the Governor, would outlaw non-compete agreements in all employment contracts. The proposed legislation prohibits employers from restraining employees or independent contractors from engaging in their profession, trade, or business. Period. And if that’s not enough, the proposed law doesn’t just ban non-competes, it also creates the potential for employees to file civil actions against violative employers.
What does this mean for employers? Well, the good news is that it’s looking like the New York law will not be retroactive – so make sure you bolt the doors and refuse to let your employees leave unless they sign a non-compete (kidding, jokes, please don’t do this – besides, this would require your employees to actually be in the office on a Friday). But seriously, looking ahead, employers should be prepared for a future where non-competes may not be enforceable – or, at a minimum, be significantly limited. As terrifying a thought as this is, we’re likely going to have to take a page out of the California playbook and make sure you beef up those confidentiality/proprietary information agreements, as well as non-solicitation clauses.
Pregnant Workers Take A Bow (or just stay sitting, if that’s more comfortable, we’re accommodating)
As of June 27, the Federal Pregnant Workers Fairness Act (“PWFA”) is in full effect. Passed all the way back in December – a simpler time, before we all started Googling “Canadian Wild Fires” – the PWFA requires private employers with 15 or more employees to provide reasonable accommodations for workers impacted by pregnancy, childbirth, or related medical conditions. The key term here is “reasonable accommodations,” unless of course, such an accommodation would impose an undue hardship on the employer.
What are we talking about when we say “reasonable accommodations?” Think along the lines of closer parking spaces, additional break time to eat and rest, flexible hours, and the provision of appropriately sized uniforms and safety apparel. Even leave or time off to recover from childbirth falls under this umbrella.
Now, let’s clarify this “undue hardship” exception. We’re looking at significant difficulty or expense for the employer. Sound vague? Yes, but the onus lies with the employer to demonstrate this hardship. As you may have guessed, there are certain behaviors that employers should avoid under the PWFA: (1) forcing an employee to accept an accommodation without an interactive discussion about the accommodation; (2) denying a job or other employment opportunity to an individual based on their need for a reasonable accommodation; (3) retaliating against an individual for reporting or opposing unlawful discrimination under the PWFA; or (4) interfering with any individual’s rights under the PWFA.
And one big no-no: don’t require an employee to take leave if there’s another reasonable accommodation that can allow them to keep working.
Sound daunting? Here’s the thing: many states and cities, such as New Jersey and New York City, already have similar protections in place for pregnant workers. So, if you’re operating in these states or cities, the PWFA might not seem like a massive sea change. But make no mistake, the PWFA, as a federal statute, carries nationwide implications (also, if you are in a jurisdiction that already had similar rules in place, and you’re thinking about these issues for the first time, you should realllly speak with someone).
Whether you’re operating in a state with its own pregnancy accommodation law or not, the arrival of the PWFA should be a wake-up call. It’s an excellent time to review and update your policies, making sure they’re not only in line with the PWFA, but also with any state and local laws that may apply.
Neither Snow Nor Rain Nor Justice Alito
While the affirmative action ruling seems to be garnering most of the headlines, we wanted to draw your attention to another decision handed down this week by the U.S. Supreme Court (or as we affectionately call them, “SCOTUS”) – Groff v. DeJoy.
Background: Gerald Groff was a carrier for the United States Postal Service (“USPS”), but his religious beliefs prohibited him from working on Sundays in observation of the Sabbath. USPS offered to find employees to cover Groff’s shifts, but repeatedly, all of Groff’s coworkers were conveniently unavailable to swap shifts with him. When Groff refused to work on Sundays, USPS disciplined him. Groff resigned and sued USPS under Title VII, alleging failure to reasonably accommodate his religion. Under Title VII, and many state analogues, an employer is required to accommodate an employee’s religious observance or practice unless able to show an undue hardship on the business. Until now, the prevailing thought was that anything more than a ‘de minimis’ burden on the business would suffice to establish the requisite ‘undue burden’, making it easier for employers to justify the denial of a religious accommodation.
*Justice Samuel Alito has entered the chat*
Groff appealed to SCOTUS, who promptly reversed the lower court’s decision and changed the test to determine undue hardship with religious accommodation cases. According to SCOTUS, “‘undue hardship’ is now shown when a burden is substantial in the overall context of an employer’s business.” This marks a pretty significant change from the prior de minimis standard and the TLDR is that it is now harder for employers to deny accommodations for religious practices and beliefs.
Moving forward, employers need to reassess their approach to religious accommodations in light of the Supreme Court’s ruling. Remember all those requests to be exempted from vaccination requirements based on religion? While most of those requests were sincere and genuine, it sure seemed like more than a few of these employees would have something to confess to following the submission of their requests. And while we’re not necessarily prophesying the flood gates opening with requests for religious accommodations, it’s no longer as simple as dismissing religious observances as a mere inconvenience. The new standard requires employers to demonstrate a substantial burden on the overall context of their business in order to deny religious accommodations. This means proactively reviewing your policies and practices to ensure compliance, and seeking assistance to make sure you’re carefully evaluating any accommodation requests for their impact on operations, considering possible alternatives, and documenting any hardships faced . . . or ya know, pray for divine intervention that you won’t be sued. Tomato tomahto!
Enjoy those barbeques. Drink and eat responsibly (especially you, Joey Chestnuts). And remember, if you’ve got questions, you know we’ve got answers.