The U.S. Equal Employment Opportunity Commission (EEOC) in April 2024 issued new enforcement guidance on harassment in the workplace, its first guidance on this subject in 25 years, superseding five earlier documents from the 1980s and 1990s.  The new guidance accounts for the changing times, including the #MeToo and Black Lives Matter movements, the Supreme Court’s decision in Bostock v. Clayton County, and the COVID-19 pandemic, and presents a comprehensive summary of the legal standards for harassment claims.  The guidance, which is effective immediately and will be referenced by EEOC staff in determining whether to investigate and ultimately litigate allegations of discrimination, provides a helpful roadmap for employers’ efforts to prevent and correct workplace harassment.  As further explained below, however, it is already being challenged.

Continue Reading EEOC Issues New Guidance on Workplace Harassment

On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule that increases the salary thresholds required to classify certain employees as exempt from overtime pay requirements under the Fair Labor Standards Act (FLSA).  The final rule, applicable to employees who otherwise satisfy the “white-collar” (bona fide executive, administrative, and professional) and “highly compensated” exemptions, is similar to the proposed rule DOL issued last August, although the salary thresholds in the final rule have been increased to align with the latest Census salary data.

The final rule represents a sharp increase—approximately 65%—from the current salary thresholds implemented in 2019 under the Trump Administration.  The rule is scheduled to take effect in two phases, with the first phase effective July 1, 2024 and the second on January 1, 2025.  Thus, employers have only a small window to determine how the rule will impact their operations and make any necessary adjustments.

Continue Reading DOL Issues Final Rule Expanding Overtime Eligibility

Since 2020, with the adoption of Washington state’s non-compete statute (Chapter 49.62 of the Revised Code of Washington (“RCW 49.62”)), Washington has imposed significant restrictions on employer use of non-compete agreements with employees and independent contractors, permitting such agreements only subject to certain statutory and common-law requirements, including without limitation, a minimum annual earnings threshold (the 2024 limits are $120,559.99 for employees and $301,399.98 for independent contractors), and a Washington forum for any disputes.

Now, Senate Bill 5935 (“SB 5935”) – which takes effect on June 6, 2024 – amends the non-compete statute to further restrict the use of non-compete provisions and expand the types of agreements that may be considered non-competes. As a result, employers will need to take quick action to review their employment agreements and hiring processes to ensure compliance with the new law.

However, as discussed in our Covington Alert, on April 23, 2024 the Federal Trade Commission issued a final rule purporting to ban the use of non-competes with most U.S. workers.  The FTC Rule – should it become effective – would supersede inconsistent state laws.  The earliest the FTC Rule would take effect is late August 2024, and pending legal challenges may result in court orders that could delay or stay enforcement of the FTC Rule. Accordingly, employers with workers in Washington State should take steps to comply with SB 5935 before it takes effect on June 6, 2024.  Employers should also consider consulting with employment and executive compensation counsel for assistance with navigating the evolving non-compete landscape.

Here is an overview of the key changes under SB 5935:

Continue Reading Changes to WA’s Non-Compete Law Require Employers to Take Action

As previewed in our prior post regarding new California employment laws from the 2023 legislative session, employers must implement a comprehensive workplace violence prevention plan (WVPP) and provide employee training on the WVPP by this coming July 1, 2024.  The WVPP requirement (under new California Labor Code Section 6401.9), augments the existing obligation for California employers to create and maintain an injury and illness prevention plan and is intended to combat incidents of workplace violence, which is the second leading cause of fatal occupational injuries in the United States according to OSHA.  The new compliance requirements are described below, along with steps employers can take to get ready.

Continue Reading California’s New Workplace Violence Prevention Plan and Training Requirements Take Effect on July 1, 2024; How to Get Ready

In a unanimous decision, the U.S. Supreme Court rejected an argument that would have made it harder for whistleblowers to prevail on retaliation claims under the Sarbanes-Oxley Act (“SOX”). The decision, Murray v. UBS Securities, LLC, No. 22-660, may be welcome news to whistleblowers, but as a practical matter, employers will likely not see a significant change in SOX whistleblower retaliation claims or awards.

Continue Reading The Supreme Court Keeps Status Quo for SOX Whistleblower Retaliation Claims

As we enter the final months of 2023, California employers should turn their attention to the employment-related bills that Governor Newsom recently signed into law, many of which take effect on January 1, 2024. Summaries of key developments are below.

Continue Reading 2023 Legislative Session Wrap-Up: New California Workplace Laws for 2024 and Beyond

New York lawmakers have been busy enacting a number of laws and regulations in 2023 that impose new requirements on employers, several of which have recently taken effect.  New York employers may need to update their policies, agreements, and practices to comply with the new laws, as summarized below.

Continue Reading New York Employers Beware:  New Employment Laws Are In Effect And On The Horizon

On the heels of approving SB 699, which heightened the protections and reach of California’s prohibition of employee non-competes under California Bus. & Prof. Code Section 16600 (“Section 16600”) (see our blog post here), Governor Gavin Newsom has now signed AB 1076. AB 1076 further increases the litigation risk for employers that use employee non-competes and, most notably, requires employers to provide notice of any non-competes to current and former employees by early next year. Together, these two new laws, which take effect on January 1, 2024, reinforce California’s strong public policy against employee non-competes and specify new consequences for employers who seek to enforce or enter into such agreements.

As a reminder, SB 699 adds new Bus. & Prof. Code Section 16600.5 to: (1) prohibit an employer or former employer from attempting to enforce a contract (e.g., a non-compete) that is void under Section 16600; (2) grant current, former, and even prospective employees a private right of action for damages and injunctive relief, and to recover attorney’s fees and costs; and (3) expand the territorial reach of California’s prohibition of employee non-competes to apply “regardless of where and when the contract was signed.”

Continue Reading California Doubles Down with Yet Another Law on Employee Non-Competes

California non-compete law has just been shaken-up—and the ripples are likely to travel across the country. For decades and save for narrow exceptions, California Business and Professions Code § 16600 has made post-employment non-competes unenforceable due to their potential to unduly restrain an individual’s business or profession. Effective January 1, 2024, however, Senate Bill 699 (“SB 699”) drastically expands both the protections and the reach of California’s prohibition on employee non-competes.

Specifically, SB 699:

  • prohibits an employer or former employer from even attempting to enforce a contract that is void under Section 16600;
  • grants current, former, and even prospective employees a private right of action for damages and injunctive relief—and to recover attorney’s fees and costs; and
  • applies to all non-competes “regardless of where and when the contract was signed.”
Continue Reading Will California’s SB 699 Shake Up Non-Compete Law Everywhere?

In its decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College and Students for Fair Admissions v. University of North Carolina[1] issued on June 29, 2023, the Supreme Court held that the undergraduate admissions programs of Harvard College and the University of North Carolina violate the standards of the Equal Protection Clause of the Fourteenth Amendment because they fail to satisfy strict scrutiny, rely on racial stereotyping, and lack a logical endpoint. The decision did not directly implicate Title VII of the Civil Rights Act of 1964 (“Title VII”), which prohibits discrimination on the basis of race in employment decisions, but employers are interested in the impact the Court’s ruling may have on diversity, equity, and inclusion (“DEI”) efforts in the private employment context. Equal Employment Opportunity Commission[2] (“EEOC” or “Commission”) Chairperson Charlotte Burrows and Commissioner Andrea Lucas each offered initial views immediately after issuance of the decision, which together convey a message to employers concerning their DEI efforts: proceed, but with caution.

A few hours after the Supreme Court’s decision, the EEOC issued a press release with a statement from Chairperson Burrows in response to the decision. Burrows was appointed to the Commission by former President Barack Obama and designated the Chair by President Biden. Chairperson Burrows stated that the Court’s decision “does not address employer efforts to foster diverse and inclusive workforces,” and opined that “[i]t remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.”

Another Commissioner, Andrea Lucas, who was appointed by former President Donald Trump, expressed views on workplace DEI programs in commentary published on June 29 by Reuters and during a subsequent media appearance. Her commentary noted that the Supreme Court’s ruling does not alter current federal employment law, and that Title VII has always prohibited using race as a factor in employment decisions. But Commissioner Lucas also stated that the Supreme Court’s ruling should prompt employers to “take a hard look” at their corporate diversity programs. For example, she opined that “explicitly or implicitly taking race into decision-making for employment decisions” through initiatives, such as “race-restricted internships, race-restricted mentoring, [and] race-focused promotion decisions,” may already be “violating the law.”

Private employers have been permitted to establish voluntary affirmative action programs that involve consideration of race in employment decisions if certain criteria were met pursuant to Supreme Court decisions in United Steelworkers of Am. v. Weber, 443 U.S. 193 (1979) and Johnson v. Transp. Agency, 480 U.S. 616 (1987). Such programs must (i) seek to “eliminate manifest racial imbalances in traditionally segregated job categories”; (ii) be temporary; and (iii) not “unnecessarily trammel the interests of [non-minority] employees.” Johnson, 480 U.S. at 628-30. The same year Weber was decided, the EEOC issued guidelines for implementing a Title VII-compliant voluntary affirmative action program (distinguishable from affirmative action programs required of federal contractors). The guidelines and subsequent EEOC interpretation provided that a voluntary affirmative action program, such as a race-conscious hiring policy or career advancement training program, may be permissible if the employer engages in a self-analysis that identifies policies or practices that have led to racial imbalances in traditionally segregated job categories, and the action taken pursuant to the program is reasonable in relation to the problems identified by the self-analysis.

The EEOC provided additional guidance in 2006 beyond formal affirmative action plans. The EEOC explained that “Title VII permits diversity efforts” and discussed DEI efforts more generally, apart from formal affirmative action plans. It described two examples of diversity efforts intended to open up opportunities: strategies to expand the applicant pool of qualified Black candidates, such as recruiting at schools with high enrollment of Black students, when the number of job applicants was lower than expected based on the demographic makeup of the qualified labor pool; and revising a policy requiring a college degree to allow flexibility for applicants to have a college degree or two years of relevant experience, in order to minimize disparate impact on any racial group. The EEOC also stated that formal affirmative action plans must be implemented in accordance with the Weber-Johnson criteria in order to pass muster under Title VII. With regard to both DEI and affirmative action programs, the EEOC indicated that “very careful implementation…is recommended to avoid the potential for running afoul of the law.”

In recent years, employers have implemented a broad range of initiatives to support DEI in the workplace. Such efforts are distinguishable from voluntary affirmative action programs in various ways, including because affirmative action programs typically involve tangible employment actions intended to remedy the effects of past discrimination, whereas DEI efforts tend to be forward-thinking and crafted in order to create an inclusive workplace where employees of all backgrounds can thrive. Whether an employer’s actions constitute a voluntary affirmative action plan or diversity efforts is not always clear, but the distinction is significant.

Litigation has been brought in the past arguing that some employer initiatives should be subject to greater scrutiny—such as intern programs that consider only applicants of a specific race or leadership development programs offered only to employees of a specific race. These initiatives are distinct in meaningful ways from many more general efforts that seek to improve inclusivity, create equal opportunity, and mitigate bias in the workplace—such as the establishment of affinity groups, adoption of structured interview processes to ensure more equitable evaluation of candidates for roles, or efforts to ensure a more diverse pool of candidates for employment. In considering what initiatives could be targeted for litigation, employers should give thought to the extent to which their DEI efforts and initiatives implicate tangible employment actions or, instead, promote a more equitable and inclusive work experience.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Employment and Appellate & Supreme Court Litigation practices.

[1] 600 U. S. ____ (2023).

[2] The EEOC is a bipartisan Commission comprised of five presidentially-appointed members, including a Chair, a Vice Chair, and three other Commissioners. (Currently, the EEOC has a vacancy, with only four members.)