House Passes Bill To Extend Recent Prohibition On Arbitration Of Sexual Harassment. While the 50-50 partisan split in the Senate has caused an uneven legislative road since the onset of the Biden Administration, legislation is actually moving through Congress at a clip not seen in quite some time. Indeed, as we noted here, and Seyfarth summarized here, President Biden recently signed H.R. 4445, into law, which in a nutshell permits persons alleging sexual assault or harassment to do so in court, even if the aggrieved person signed a predispute agreement to arbitrate all claims. In a follow-up piece, we questioned whether the recent arbitration prohibition for sexual harassment claims would be extended to other kinds of claims, such as discrimination based on race or age.
Well, as Seyfarth noted here, the House of Representatives recently passed H.R. 963 AKA the Forced Arbitration Injustice Repeal Act of 2022 AKA the FAIR Act of 2022, which answers the above in the affirmative. This bill would extend the prohibition of forced arbitration to certain consumer and antitrust claims, as well as employment claims, including wage-hour and discrimination claims. The measure would also preclude employers from maintaining class and collective action waivers.
H.R. 963 does not enjoy the same bipartisan support that HR 4445 did, so its fate in the Senate is not clear. Moreover, the bill passed in the House along a party-line vote -- not a great signal for its likelihood of movement in the hyper-partisan Senate. But if recent past is prologue, employers should be prepared to alter current arbitration agreements and corporate policies. If the Act were to pass the Senate and be signed into law, it would represent a sea change for employers, overturn decades of Supreme Court case law, and require employers to completely rethink their arbitration programs. Although the Act's prospects for passing the Senate remain uncertain, even unlikely, we will be following this legislation with a watchful eye.
Seyfarth will be hosting a webinar on arbitration and risk of mass arbitration; those interested can register here. Seyfarth's webinar discussing H.R. 4455 can be found here.
Department Of Labor Reanimates Prior Davis-Bacon "Prevailing Wage" Definition. On March 11, 2022, the DOL announced a notice of proposed rulemaking entitled "Updating the Davis-Bacon and Related Acts Regulations." In it, the DOL proposes to return the definition of "prevailing wage" to that used for decades prior to 1983, which identified "prevailing" as: (1) any wage rate paid to a majority of workers; (2) if there is no wage rate paid to a majority of workers, then the wage rate paid to the greatest number of workers, provided it is paid to at least 30 percent of workers (i.e., the so-called "30-percent rule"); and (3) if the 30-percent rule is not met, the DOL would use the weighted average rate. The DOL insists that this reform is essential "to ensure prevailing wages reflect actual wages paid to workers in the local community." This change is expected to lead to higher wages for workers through faster prevailing wage updates, internal safeguards to ensure that prevailing wages keep up with actual wages, and more efficient enforcement of the Act's standards. Once the Federal Register publishes the NPRM, the public will have sixty days to submit comments to the Wage and Hour Division of DOL. Affected employers should consider doing so.
Independent Contractors, Gig Workers, Department of Labor. Oh My! There were recently some big developments in the independent contractor world. For background, as Seyfarth noted almost exactly a year ago, the newly constituted DOL under Joe Biden effectively rescinded a Trump-era rule on what is, and what is not, an independent contractor. As Seyfarth noted here, after a brief notice and comment period that carried strenuous objections, including from the U.S. Chamber of Commerce, the DOL withdrew the rule.
In that piece, we noted that "[b]arring successful litigation, the DOL's independent contractor regulation is a dead letter." Well, litigation over the measure has recently been successful. Judge Marcia A. Crone of the Eastern District of Texas recently ruled that the DOL violated the Administrative Procedure Act by delaying, then withdrawing, a Trump-era rule that made it easier for businesses to classify workers as either independent contractors or employees who benefit from all of the labor protections that come with that designation. That rule is once again the independent contractor law of the land. The case is Coalition for Workforce Innovation v. Marty Walsh. Seyfarth has been on the ground floor of this important legal issue, submitting numerous comments on behalf of the Coalition for Workforce Innovation, both in 2020 in support of the Trump-era rule, as well as comments in 2021 opposition to the delay and ultimate withdrawal of the same.
While many business coalitions are likely, and deservedly, celebrating the victory, employers should be wary -- it's unclear whether the agency would rewrite its own, more restrictive standard for determining independent contractor status in a rulemaking, or simply try to undo the Trump-era rule again insofar as the Texas decision was based on procedural faults with the DOL rescission, not substance. But it's expected to take a much stricter approach to defining independent contractors.
I-9 Flexibility For Pandemic Now Over. The Department of Homeland Security (DHS) has announced that they will soon be ending their COVID-19-related temporary policy allowing employers to accept expired List B documents when verifying an employee's work eligibility on the Form I-9, which we reported on previously here, here, and here. Starting on May 1, 2022, employers must return to the pre-COVID norm and only accept unexpired List B documents. This announcement signals that we are nearing the end of the COVID-19 relaxation of the in-person review policy, which means that companies need to take steps to address their employee populations who completed I-9s virtually. That said, it appears that the government is aware of the need for a runway at the end of the virtual I-9 policy. In fact, it is likely that a permanent virtual policy will be introduced by the Department of Homeland Security, but it is unclear whether it will remove the requirement that I-9s completed virtually during COVID be updated with an in-person review. At a minimum, it is critical that companies begin preparing SOPs to update the temporary List B expired documents.
COVID-19 May Be Waning, But EEOC Charges Are Piling Up. As we have reported over the past few months, including here and here, states and localities continue to relax COVID-19 rules and restrictions. But, unfortunately for employers, although COVID appears to be approaching some sort of a relaxation, this is just the beginning for EEOC charges alleging discrimination related to COVID-19. From April 2020 through December 2021, the EEOC received more than 6,000 charges relating to COVID-19 discrimination, and that's not even counting the 2,700 separate vaccine-related charges filed after workplaces began to implement vaccine mandates. Since the beginning of the pandemic, the EEOC has also brought at least three lawsuits related to disability bias and COVID. Employers should anticipate that the volume of EEOC charges and lawsuits related to COVID-19 will only increase over the coming year.
State and Local Legislative Updates: Washington to New York and D.C. The Washington State Legislature recently concluded a short session on March 10, 2022, and it enacted new laws that will affect employers doing business in Washington, including on topics relating to settlement agreements, whistleblowers/qui tam actions, paid family leave, independent contractors, workplace safety, and warehouse distribution centers. Seyfarth's Labor & Employment team recently convened a webinar addressing the new Washington state laws with practical suggestions to ensure employers are prepared. Check it out.
The New York State Legislature has passed or is close to passing a series of bills designed to protect public and private employees from sexual harassment and retaliation. The bills include a proposed ban on no-rehire clauses in settlement agreements and an extension of the limitations periods for claims of workplace harassment and discrimination, all of which have been passed by the New York State Senate but are awaiting passage by the Assembly and Governor Hochul's signature. The prohibition on no-rehire clauses would render unenforceable the release of any claim, by an employee or independent contractor, if the release is conditioned upon a promise not to apply for, accept, or engage in any future employment with the employer or related entities. Another of the bills passed by the NYS Senate extends to three years the statute of limitations for administrative charges alleging unlawful discriminatory practices filed with the Division of Human Rights. Currently, the limitations period for such charges is one year. Lastly, the Senate recently passed a bill extending to six years the limitations period for employment discrimination lawsuits under the Human Rights Law. The current limitations period is three years. All three bills are projected to pass and could change the legal landscape for public and private employers when it comes to litigation over sexual harassment and retaliation claims.
Finally, the District of Columbia's non-compete ban's effective date has been delayed yet again. The D.C. Council recently passed another amendment delaying the effective date of the Act from April 1, 2022, until October 1, 2022. The law, if it ever actually goes into effect, would prohibit employers from utilizing non-compete agreements, following laws passed by other states that we have previously reported on, and it would also prohibit employers from utilizing anti-moonlighting provisions or other "duty of loyalty" policies for D.C. employees. This latter prohibition would be a first-of-its-kind ban. Employers doing business in D.C. should stay tuned to see if this ban goes into effect on schedule, being mindful that, if not, it likely will eventually.
Equal Pay Day! Equal Pay Day was March 15, 2022, which is celebrated on a different day annually to represent how far into the year women must work to earn what men earned in the previous year. This year, Equal Pay Day came with some equally important equal pay policy. Indeed, the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP), as Seyfarth summarized here, recently issued a new directive that will require certain employers to turn over to the agency pay equity analyses when disparities in pay are found during an OFCCP compliance review, regardless of attorney-client privilege. OFCCP Directives do not have the legal status of a regulation or law, and, when challenged in court, this directive may not survive. The White House has also announced plans to narrow the pay gap through regulation, executive order, and through reporting of pay equity data.
Equal Pay Day has historically been celebrated with vigor here at Seyfarth. This year, we celebrated the date with a webinar identifying key trends in the equal pay space: The march toward increased reporting and transparency; COVID-19, the "Great Resignation," and the impact on pay equity; and key considerations for employers—analyzing, evaluating, and remediating unexplained pay differences and compliance issues. In further commemoration, Seyfarth has also released a 50 state survey on equal pay laws across the nation and a gem of a reference guide from our many offices abroad covering pay equity laws globally.
