Many employers have incorporated arbitration agreements into their standard human resources process, and gained much value from them. They bring efficiency, cost savings, confidentiality and a certain sense of predictability when it comes to the resolution of workplace disputes.

The good news for employers is that the federal court system and workplace law agencies have generally been pro-arbitration, rejecting most challenges from employees attempting to invalidate such agreements. But a surprising decision last month from the National Labor Relations Board calls the validity of many such agreements into question, and will require all employers to review their arbitration pacts to ensure they meet a new standard.

On June 18, the National Labor Relations Board issued a unanimous decision invalidating an employer’s mandatory arbitration agreement because it could be reasonably interpreted as preventing employees from filing charges with the NRLB. The Prime Healthcare decision analyzed the employer’s arbitration agreement using the relatively new Boeing Co. standard for evaluating “facially neutral” policies and rules that potentially interfere with employees’ protected rights, but fell on the side of the workers. This decision may require employers to adjust their arbitration agreements to ensure they stay on the right side of the law.

Prime Healthcare agreement

Prime Healthcare required employees to sign an arbitration agreement that did not explicitly prohibit them from filing charges with the NLRB. Rather, the agreement included broad language that said “all claims or controversies for which a federal or state court would be authorized to grant relief” are subject to arbitration, including examples such as those related to wages, breach of contract, discrimination, and violations of any “federal, state or other governmental constitution, statute, ordinance, regulation or public policy.”

The agreement did not specifically identify claims under the National Labor Relations Act (NLRA) as being covered, but it also did not explicitly exclude them. The agreement, however, did exclude from arbitration some claims, such as workers’ compensation and unemployment claims.

The applicable standard

The NLRB first explained that nothing in the U.S. Supreme Court’s recent Epic Systems decision – including approval of class and collective action waivers in mandatory arbitration agreements – disturbed the long-standing precedent that the NLRA provides workers with the right to file charges with the NLRB, nor does the Federal Arbitration Act authorize agreements limiting that right. The NLRB then explained that an arbitration agreement explicitly prohibiting the filing of charges with the NLRB or, more generally, with administrative agencies, must be found unlawful because such an agreement would constitute an explicit prohibition of the exercise of employee rights under the NLRA.

Acknowledging that Prime Healthcare’s arbitration agreement did not explicitly prohibit the filing of charges with the NLRB, the Board analyzed whether the agreement was nevertheless unlawful under the Boeing Co. balancing test. In Boeing Co., the NLRB held that when a facially neutral policy or rule, when reasonably interpreted, potentially interferes with employees’ rights under the NLRA, the Board must balance the nature and extent of the potential impact with legitimate justifications associated with the policy or rule.

�������⾱�Բ���Boeing Co., the NLRB concluded that the arbitration agreement at issue, when reasonably interpreted, potentially interfered with employees’ rights because it effectively covered all claims (with limited exceptions) and did not expressly exclude NLRA claims. The Board then determined that the potential impact on employee rights was significant, opining that the right to file charges with the NLRB was “indispensable to the effectuation of national labor policy.”

Prime Healthcare offered no legitimate justifications for the breadth of its arbitration agreement, nor could it have, according to the NLRB. The Board explained, “As a matter of law, there is not and cannot be any legitimate justification for provisions, in an arbitration agreement or otherwise, that restrict employees’ access to the Board or its processes.”

Accordingly, the Board held that Prime Healthcare’s arbitration agreement was unlawful to the extent it prohibited employees from filing charges with the NLRB. The Board ordered Prime Healthcare to rescind the agreement (which it had already done, replacing it with an agreement that specifically carved out NLRB charges from mandatory arbitration) and notify current and former employees who signed the agreement that it was no longer in effect.

Significance for employers

In light of last month’s decision, employers should promptly review any arbitration agreements they maintain to determine whether they include broad language that might be read as precluding employees from filing charges with the NLRB. The decision also intimated that general disclaimer language, such as “nothing in this agreement is intended to interfere with employees’ rights or violate the law” may not be sufficient to save it. Consequently, any employer that believes its arbitration agreements are safe because of a general disclaimer should take a second look.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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Think you have a relaxing summer ahead of you? Think again. Thanks to a shocking court ruling from a federal court judge in Washington, D.C., the Equal Employment Opportunity Commission will be forcing most employers to turn over a mountain of compensation information from both 2017 and 2018 by Sept. 30. The information will need to be broken down by various demographic designations in order for the government to be able to quickly identify potential discriminatory wage gaps – most notably, disparities between the way men and women at each business are being paid for similar work.

Background: proposed rule scrapped

Historically, employers with 100 or more employees, and federal contractors with 50 or more employees, have been required to submit Employer Information Reports (EEO-1 reports) disclosing the number of employees in their employ by job category, race, sex and ethnicity on an annual basis. In 2016, the EEOC proposed changes to the EEO-1 report to require employers to include pay data and the number of hours worked for their workforces. The revised form was to be submitted by employers in 2018.

But once a new administration took over, the White House scrapped the revised EEO-1 report. The Office of Management and Budget (OMB) announced in August 2017 that it had significant concerns with the revised reporting requirements, among them that “some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”

Pay data requirement resurrected

The pendulum swung back in worker advocates’ favor in March of this year when a federal court judge in Washington, D.C., revived the revised EEO-1 report. She determined that the OMB did not have good cause to change course because it could not demonstrate that any relevant circumstances warranting the action had occurred between the time the proposed rule was finalized and the time the revisions were cast aside.

But that wasn’t the end of the tough news: after some more legal wrangling, the judge announced that employers should be on the hook for turning over two years’ worth of pay data. After all, the original plan from the Obama-era EEOC called for this information to be collected starting several years ago, and the judge believed the agency erred by putting a halt to this collection effort. So she gave the EEOC the option of either collecting pay data from both 2017 and 2018 information by the Sept. 30 deadline, or collecting 2019 pay data during the 2020 reporting period.

The EEOC responded in early May by picking its poison. It announced that EEO-1 filers should begin preparing to submit their pay data for calendar year 2017, in addition to data for calendar year 2018, by the Sept. 30 deadline. The EEOC also said that it expects to begin collecting this data by mid-July, which comports with its earlier announcement that the collection portal would be open for business and in a position to accept compensation information on July 15.

What should employers do?

The federal government several weeks ago filed an appeal, hoping to once again shelve the pay data reporting requirement. However, the EEOC confirmed that this Notice of Appeal does not pause the court’s orders or in any way alter EEO-1 filers’ obligations to submit pay data. “EEO-1 filers should begin preparing to submit Component 2 data,” the agency said on its website. So that is exactly what you should be doing.

First and foremost, in order to be in a position to comply with the new requirements, the EEOC has already announced that it will offer a series of training sessions and provide detailed information to employers so they understand their obligations in advance of the Sept. 30 due date. Be on the lookout for those in the coming weeks.

Meanwhile, begin by determining how your W-2 pay data will be split into the 12 pay bands required for each of the 10 EEO-1 categories. And you need to determine how you will report your hours worked, which is also a significant undertaking, where the data is likely tracked separately from the W-2 pay data information.

You should also make it a priority to review current pay systems and identify and address any areas of pay disparity. It is critical to take steps now to minimize increased scrutiny that may soon come your way. Ideally, you would work with legal counsel to conduct this initial review under the protection of the attorney-client privilege while you are assessing your workforce and the proper grouping for your employee population.

By conducting your own audit of pay practices, you will be able to determine whether any pay gaps exist that might catch the eye of the federal government if – or when – you are forced to turn over this information. You may have time to determine whether any disparities that may exist can be justified by legitimate and nondiscriminatory explanations, or whether you will need to take corrective action to address troublesome pay gaps. Due to the increased complications caused by Oregon’s own pay equity law, we strongly encourage you to get your attorney involved in this analysis early in the process.

Sorry if you had visions of dipping your toes in the sand or relaxing by the pool this summer. Instead, your next few months should be filled with pay data reports and compliance action in order to keep up with the latest legal development.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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The Oregon Supreme Court recently gave employers a significant warning when it comes to after-hours social events. In a unanimous opinion, the state’s high court ruled that employers can be liable for damages stemming from negligently forcing their employees to enjoy a drink or two – or many – even at off-the-clock informal gatherings. The decision, which narrows the available “social host” statutory defense that many employers had relied upon, might make officials think twice before letting supervisors take workers out for happy hour.

Happy hour ends in tragedy

Ashley Schutz worked as a receptionist for Portland-based O’Brien Constructors for some of 2008. During her three months of service, she claims that she declined four or five invitations from her supervisor, Keeley O’Brien – who also happened to be the owner’s son – to join him and other co-workers for drinks after work. But eventually she gave in, believing that she needed to say yes and join O’Brien if she wanted to advance in the company.

So on Dec. 12, 2008, she left work early to join her supervisor and several co-workers at a nearby Mexican restaurant and bar. Schutz claims that O’Brien encouraged her and the co-workers to drink heavily, teasing one of the employees who attempted to leave the bar after downing “only” two beers. After four hours of drinking, Schutz left the bar at about 9 p.m. and started to drive home.

Unfortunately, Schutz was extremely intoxicated. She mistakenly drove onto an exit ramp to I-5 north and crashed head-on into another vehicle. When she was later tested, her blood-alcohol level was .24 percent – three times the state legal limit. But that wasn’t the worst news of the night. Schutz was severely injured in the accident; she broke over a dozen bones, including two of her vertebrae, and became a quadriplegic. (If there is any silver lining to this story, it’s that the driver of the other car suffered only minor injuries.)

Schutz filed a lawsuit against the restaurant, her supervisor and her employer. The court quickly dismissed the restaurant from the case because of Oregon’s “social host” statute. In response to a case where a man sued a Coos Bay restaurant for serving him so many drinks that he became inebriated and injured himself in a fall down a staircase, the Legislature passed a law in 2001 that bars patrons who voluntarily drink alcohol from suing the social host that served them the liquor. Both O’Brien Constructors and Keeley O’Brien also asked the court to dismiss the case against them for the same reasons, but they did not escape liability.

Employers can still be on the hook

On March 14, 2019, the Oregon Supreme Court ruled in Schutz’s favor and decided that the social host statute did not protect employers from cases stemming from allegations that they negligently contributed to such injuries. It pointed to the fact that the employer and supervisor in this case may have committed negligent acts leading up to the actual serving of alcohol.

For example, they may have acted unreasonably in organizing the drinking event in the first place, pressuring her to attend despite her earlier refusals, and creating the impression that her success at the organization was dependent upon her supervisor’s approval (which, in turn, necessitated her to join in a night of excessive drinking). It concluded that the social host statute protects only those that serve alcohol for their actions serving alcohol. All other actions are now wide open for legal attack.

Significance for Oregon employers

The decision is a sobering one for Oregon employers. It raises the possibility that one could be liable for damages resulting from an employee voluntarily participating in after-hours social events and deciding to overconsume alcohol. Officials should immediately train their supervisors about the dangers that this case could create for the organization as well as best practices to employ for events where employees are drinking. Some ideas include:

• Make sure supervisors are aware that any event they organize – even informal happy hours – could bind the company.
• Inform supervisors they are always on the clock when it comes to acting responsibly. They have an obligation to be the eyes and ears of the organization at such events, monitoring all workers for signs of inebriation or unprofessional behavior.
• If a supervisor believes an employee is not fit to drive, he or she should order a taxi or ride-share driver at company expense.
• Employees should be invited but not compelled or forced to attend such social events.
• In no event should a supervisor encourage someone to drink any amount of alcohol. Similarly, if a supervisor sees a co-worker teasing another employee (even in jest) about being a “lightweight” or not cool enough to drink a certain amount, the supervisor should immediately put an end to that and make it clear that each employee is the final decision maker when it comes to his or her own comfort level.
• All this being said, it might be best for supervisors to avoid drinking with their subordinates at informal after-hours events altogether. That would sidestep any such concerns and all but eliminate any possibility of company liability.
• If all of these warnings are not sinking home, a final warning should strike fear into supervisors’ hearts: let them know they could be personally liable for any such damages resulting from an injury. After all, the Supreme Court cleared Schutz’s case to proceed against both the employer AND the supervisor. If supervisors don’t want to end up in the same position as a defendant in a lawsuit, they should heed officials’ advice and warnings.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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They say March comes in like a lion and goes out like a lamb; employers certainly heard a roar from workplace law developments this past month. A stunning decision from a federal court in Washington, D.C., could change the manner in which every employer in the country handles its compensation systems, and a long-awaited announcement from the Department of Labor finally sheds light on the way employers will soon need to handle overtime pay. Combined, these two developments are worth noting and will require immediate attention.

Pay data reporting resurrected

The month began with a shocker – a federal court judge reinstated a revised version of the EEO-1 report, which is now once again set to gather compensation information from employers across the country. As most employers know, those businesses with 100 or more employees, and federal contractors with 50 or more employees, have long been required to submit Employer Information Reports (EEO-1 reports) disclosing the number of employees in their employ by job category, race, sex and ethnicity on an annual basis. In 2016, the EEOC announced changes to require employers to include pay data and the number of hours worked for their workforces in their EEO-1 reports in the hopes of identifying pay gaps and investigating pay discrimination practices.

But before the first disclosures were to be submitted in March 2018, the White House scrapped the revised report, as the Office of Management and Budget (OMB) announced that it had significant concerns with the revised reporting requirements. Specifically, it identified that “some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”

On March 4, however, a judge determined that the OMB did not have good cause to change course because it could not demonstrate that any relevant circumstances warranting the action had occurred between the time the proposed rule was finalized and the time the revisions were cast aside. The judge noted that federal agencies are free to change their existing policies, but to do so they must “provide a reasoned explanation for the change.” Instead, in this case, she ruled that the OMB’s action in staying the EEOC’s collection of pay data was “arbitrary and capricious” because it “totally lacked the reasoned explanation” required by federal law.

What’s next is anyone’s guess. When the EEO-1 reporting portal opened on March 18, there wasn’t even a way for employers to provide pay data even if they wanted. The judge ordered the EEOC to inform employers about the status of the pay data disclosures by April 3, providing information about how the data will be collected, by what deadline, and how employers should prepare the data. It’s likely that the EEOC or OMB will appeal the judge’s ruling, which could delay the pay data reporting requirement – but nothing is certain.

Because of the uncertainty, employers should make it a priority to review current pay systems and identify and address any areas of pay disparity. By conducting one’s own audit of pay practices, an employer will be able to determine whether any pay gaps exist that might catch the eye of the federal government if it’s eventually forced to turn over this information.

USDOL releases overtime rule 2.0

Meanwhile, after waiting for years to see where the U.S. Department of Labor would land with its much anticipated revised “overtime rule,” the agency finally delivered on March 7. The USDOL released its long-awaited proposed rule which, if adopted, would set the minimum salary threshold at $679 per week, annualizing to $35,308 per year – an increase from the current $455 per week.

It seems like an eternity ago, but in May 2016, the USDOL (then a part of the Obama administration) released finalized rules that were designed to radically alter the federal compensation rules. The biggest changes in store for employers: the minimum salary threshold would increase to $913 per week (which would have annualized to $47,476, more than double the existing $23,660 annual threshold), and the amount would be “updated” every three years (meaning that it will likely increase with each “update”). The new minimum threshold was set to become effective on Dec. 1, 2016, and the “updating” would begin on Jan. 1, 2020.

But in a dramatic last-minute development, a federal judge in Texas blocked the overtime rule from taking effect just days before the Dec. 1, 2016 implementation date, handing an eleventh-hour victory to employers across the country. After Donald Trump was inaugurated and Alexander Acosta was installed as head of the USDOL, the new federal leadership indicated that it would instead unveil a revised rule, and we’ve been waiting for this news ever since.

While some employers might not like the increase, it is far better than the proposed doubling of the threshold that was on the table back in 2016. And even better: the proposal for an automatic update every three years has been set to the side for now, which means that whatever amount is formally adopted will most likely be in place for a sustained period of time.

What’s next? The proposed rule will now go through a formal notice-and-comment process before being finalized. But if we’ve learned anything from the saga that accompanied the release and subsequent controversy over Overtime Rule 1.0, it’s that this is a process. Many twists and turns might occur before any proposed rule is finalized. Do not run out tomorrow and make changes to your compensation structure based on what is simply a proposal. Instead, use this time to start evaluating what 2020 might look like for your compensation system if the USDOL’s proposal comes to fruition in its current form.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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Let’s say you have a lingering concern that you have a wage and hour problem on your hands. Perhaps it has suddenly dawned on you that a certain pay practice you’ve had in place for years could be legally suspect. Or let’s say that you come to realize that you have been underpaying some of your employees for quite some time, but so far, no one has complained about it. What are your options?

Before last year, you had two main choices. You could stick your head in the sand and hope that the status quo continues without any problems. Or you could try to fix the problem going forward, making a determination about whether to also clean up any existing messes. Then a new option arose last year: you can take part in the federal government’s PAID program. So, what do you need to know about PAID? And should you give it a shot?

What is the PAID program?

Let’s start with some basics. The formal Payroll Audit Independent Determination (PAID) program is run by the U.S. Department of Labor (USDOL) and provides an avenue to pay back wages, achieve compliance with federal wage and hour law, and move forward without the time and effort necessary to do battle in litigation or suffer through an agency-initiated investigation. In essence, an employer can agree to cooperate with the USDOL and voluntarily correct wage and hour errors that might violate the Fair Labor Standards Act (FLSA).

You’ve screwed up; now what?

The traditional way an employer will find itself considering whether to take part in PAID is after it has uncovered an error – whether in understanding, application or computation – that has caused FLSA violations. Sometimes employers choose to take the “ignorance is bliss” approach, crossing their fingers and hoping nothing ever comes of the possible problem. This approach is certainly less risky if the employer has already discontinued the practice that led it down the rabbit hole in the first place, but it’s still fraught with some element of peril.

Other times, an employer might decide that it is best to change the practice prospectively and eliminate the risk of forward-looking liability. That’s great, and it’s the right approach for most employers, but there still is a big decision to make: will you simply fix things going forward, or will you also try to clean up past errors and make things right by way of employees who may have been underpaid for some period of time in the past?

This is where PAID fits in …

Let’s start by agreeing that if you decide to cross your fingers and hope for the best, you likely won’t want to call upon the government to help you fix any problems. And let’s also agree that if you simply want to fix things going forward and don’t have any intention of trying to remedy any past violations, PAID is not a good option.

But what if you fall into that third camp, where you are seeking not only a prospective fix to correct future problems but also a retroactive resolution to errors that you might have made in the past? PAID may be a good fit.

Here it’s important to remember that it may not be possible to simply “settle” potential FLSA claims based on such errors, because the law says parties cannot fully resolve FLSA claims without the “supervision of” the USDOL or court approval. So short of inviting litigation or a full-blown government investigation, the only way you will be able to rest easy for the future is by taking part in the PAID program. It has been approved by the government as an official tool to resolve such claims.

PAID in full

The PAID program provides a framework for you to proactively resolve potential FLSA claims. At its core, the program entails a limited review where you control the scope of government scrutiny, perform the related calculations to ensure proper payments are made, and present your final findings to the agency. That isn’t to say the USDOL might not want to discuss a further specific point with you, but that’s a risk you have to face if you open yourself up to the USDOL’s review.

Once the formal review is finalized, the USDOL will supervise the necessary payments to your employees and tailor its documentation – such as the breadth and scope of any release language – to the specific circumstances at hand.

Pros and cons of PAID

Why take part in PAID? First off, once your review is completed, you will be able to sleep at night knowing that you have eliminated a real risk to your business. And the costs will most likely pale in comparison to anything you’d have to face if the dispute arose through a USDOL investigation or a federal lawsuit. That’s because you wouldn’t have to dispute liquidated damages, let alone deal with attorneys’ fees that are entitled to aggrieved employees who bring private lawsuits in court.

The downside? Let’s face it – there is something intrinsically odd about self-reporting potential legal violations to the federal government. But peeling back the fears you might have and taking a closer look might demonstrate that the downsides are minimal. Are you worried that a PAID matter will leave a black mark on your record? In reality, a prior PAID matter should only reflect favorably on you should the government subsequently receive an employee complaint that necessitates investigation. Are you worried that inviting the government into your workplace will evolve into an investigation on the spot? According to the USDOL, if another issue comes to its attention during the process, it will promote – but not demand – resolution.

Deciding whether to take part in PAID will vary depending on circumstances, but I recommend at least considering it, or talking with your attorney about it. While PAID is not always the ideal solution, it is the best tool that USDOL can offer employers for proactively resolving matters.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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The Occupational Safety and Health Administration (OSHA) recently made a change to its inspection practices that should lead employers to keep eyes on the sky above their work sites. The safety watchdog late last year issued an under-the-radar memorandum announcing that its inspectors now have the authority to use camera-carrying Unmanned Aircraft Systems – commonly known as drones – to collect evidence during workplace inspections when necessary.

So, OSHA inspectors have the right to not only conduct in-person inspections of workplaces, but also, under certain circumstances, deploy remote-controlled machines in the skies above to identify safety violations. While we would all agree that workplace safety is of the utmost importance, the use of drones to inspect a work site raises new concerns for employers – and should lead them to prepare for this 21st-century development.

Privacy concerns are all the buzz

The first thing that all employers should be concerned about regarding the use of drones is ensuring that they don’t cross the line and violate the Fourth Amendment right to privacy and the prohibition against unreasonable government searches. Employers have always had the right to object to an overbroad OSHA inspection, and this remains the case when we’re talking about drones being used as part of that inspection.

There is good news. According to the OSHA guidance memo, inspectors must “obtain express consent from the employer” prior to using a drone, so there’s no need to be concerned about a sneaky spy mission being pulled off without permission. In fact, if an employer objects to the drone’s use, then the aircraft won’t fly, according to the guidance memo. This guidance is intended to ensure that the OSHA inspection doesn’t violate the Fourth Amendment.

But that’s not the end of the story (or else this article would be very short). If an employer objects to use of a drone, the agency always has the option of seeking and obtaining a search warrant permitting its use. Moreover, trying to put limits on where OSHA can look during an inspection raises the risk that an employer could make itself a target for multiple and frequent future investigations. Sending an OSHA inspector away from one’s doors – or, in this case, one’s airspace – certainly raises suspicions. After all, if an employer has nothing to hide, why wouldn’t it let a drone circle overhead? At least that’s the way the government might view the matter.

For that reason, it might be better if an employer permits OSHA to launch a drone inspection but then works with the investigators to reasonably limit the inspection. An employer is always permitted to grant an OSHA inspector entry to its work site for a “limited inspection,” putting reasonable boundaries on where that search will be conducted to match the underlying reason that led the agency there in the first place. For example, if OSHA came to your workplace responding to an employee complaint, it stands to reason that you could work with the investigator to ensure that he or she search only the areas of your workplace subject to the complaint, and object to the inspection expanding beyond that.

Moreover, some employers don’t know that they can always limit certain aspects of inspections. For example, one can ask the investigator to not take pictures of certain areas of the work site (if they reveal trade secrets, for example), or ask the investigator to refrain from questioning employees during working hours. But remember, if the inspector spots a hazard in “plain view” while walking around the work site – or using the drone camera – the inspection could still be broadened without the employer’s further consent.

Who’s the queen bee?

You might already be puzzling over another concern raised by the use of drones at a specific work site, and that’s determining who OSHA considers to be “in charge” at a multiple-employer location. Remember, OSHA itself says that an employer must provide express consent before any drone activity can occur. But what happens when several employers are operating at the same location at the same time?

For instance, at construction sites, it is common for several subcontractors to be working under a general contractor. Can a general contractor give consent for drone use at a work site with multiple employers? Who actually owns the airspace above that work site and therefore has authority to grant consent? And what happens to the video after an inspection? Will it be obtainable by competitors or unions through a FOIA request?

Unfortunately, there aren’t many clear answers as of yet. Under OSHA’s Multi-Employer Citation Policy, more than one employer may be citable for a hazardous condition that violates an OSHA standard, so we at least know that more than one business may be liable for any final findings. But the issues regarding who can (or should) grant consent have not yet been sorted out by the agency or the courts. For now, the best policy seems to be opening a clear line of communication with any counterparts at a shared work site and getting on the same page before any inspection requests occur.

What can be done now?

No doubt we will see increased use of drones during OSHA inspections in the coming months and years, so begin to address the issue now. Here are a few tips:

• Prepare a response strategy. Just as a written strategy should be prepared for an OSHA in-person inspection, the same applies to drone inspections. Designate an authorized representative to sit next to an OSHA drone crew on the ground while the machine is buzzing overhead, much like accompanying an OSHA inspector during a walk-around inspection.
• Don’t be afraid to limit the inspection. Participate in the drone flight planning and don’t allow drones over the work site if there is disagreement with the flight plan.
• Be informed! Educate employees on these new developments to ensure key personnel at least know enough to prepare for future OSHA drone inspections. If an inspector shows up at your door requesting to conduct a drone inspection, know your rights.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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When the clock struck midnight and ushered in a new year, employers were plunged into a strange limbo when it comes to maintaining wellness programs. Because of a federal court ruling, the Equal Employment Opportunity Commission’s final rules providing concrete guidance for maintaining wellness plans were wiped off the books on the first day of 2019. That means plans in place might no longer be valid – or ideal plans might now be permissible. How did we get to this point? And what can employers do in the interim while waiting for the next round of laws to take effect?

Goodbye, wellness program rules

Let’s go back in time to May 2016, when the EEOC finally stepped up to provide a set of rules for employers to follow for implementing increasingly popular wellness programs. These programs offered incentives to workers who achieved fitness goals, participated in stress-release activities, or ceased smoking or other poor lifestyle choices, among other things. And many of them required workers to submit to health risk assessments and biometric screenings at certain points along the way.

Employers liked them because they generally led to more productive employees, less employee stress, reduced sick days, fewer injuries, and happier workers. Employees liked them because they provided monetary incentives and others for adopting a healthy lifestyle – a true win-win. The sticking point had always been developing rules to ensure that employers didn’t force employees into activities they didn’t want to voluntarily participate in; if the programs were found to be involuntary, they would violate both the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

In order to provide some assurances, the EEOC issued rules that permitted employers to use an incentive – or penalty – of up to 30 percent of the cost of self-only coverage to encourage participation in an employer-sponsored wellness program without rendering the program “involuntary” in violation of the federal laws. Put a bit differently, they allowed employers to discount insurance costs for participants and increase them for nonparticipants.

These rules were scheduled to take effect on Jan. 1, 2017, but they were blocked by a federal court as the result of a lawsuit filed by the AARP. The association argued that such an incentive (or penalty) was too great and, in effect, forced employees to participate in the wellness programs, removing them from the realm of voluntary. A federal court in Washington, D.C., agreed with the AARP and struck down the regulations in December 2017, asking the EEOC to take another stab at them.

However, the court didn’t strike them down immediately. After hearing further arguments about how many businesses had already implemented wellness programs in reliance upon the EEOC rules, the court provided a long lead-up time before the rules would become invalid. The date for them to be officially off the books: Jan. 1, 2019.

Three options for what to do now

So now that the clock has struck midnight, employers will need to decide their level of risk tolerance when it comes to implementing wellness program rules. Three options exist for handling a wellness program in 2019: stick with the current plan, lower the incentives/penalties to avoid legal trouble, or scrap it altogether.

If a company has a wellness incentive and penalty program that complied with the old EEOC rule – providing a 30 percent level – it could be retained but obviously risk a lawsuit given that a federal court has already concluded that such a high reward/punishment violated the ADA and GINA. So proceed with caution! And speak with a lawyer first.

The second option: significantly reduce the incentive/penalty to an amount that would (hopefully) be viewed as small enough for the employee’s participation to be considered voluntary. One may still end up being a test case for what level is low enough to pass muster under the law, since we don’t yet know what courts will say about wellness programs in the absence of EEOC rules.

The lowest risk option: eliminate the wellness incentive/penalty altogether and wait for further guidance from the EEOC. But it might be a long wait. The agency originally indicated that we could expect a revised set of rules by 2021, but the federal court chided the EEOC for such a long delay and could have spurred it into earlier action.

One final word about plans for 2019: The AARP v. EEOC ruling impacts only the components of wellness program that are subject to the ADA and GINA, such as those that request health information from workers – like health risk assessments or biometric screenings. So feel free to continue to provide incentives/penalties for other programs for promoting healthier habits and awareness not subject to the ADA or GINA, such as a gym membership or lunch-and-learn programs. These, of course, could be subject to the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA) or be considered taxable fringe benefits.

To be (legally) healthy, consult counsel

While we wait for new guidance from the EEOC, companies should assess current incentives and penalties, as well as the amount of risk they are willing to assume while waiting for the EEOC to issue new rules – which could be years from now. Discuss these options with legal counsel when planning wellness strategies for the next few years to come.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

The post OP-ED: All isn’t well when it comes to wellness programs in 2019 appeared first on Daily Journal of Commerce.

When it comes to the federal government and workplace safety investigations, there usually isn’t a lot of good news. But a federal appeals court just issued a ruling that limits OSHA’s ability to expand a post-accident safety investigation beyond its original and intended scope. Although the ruling comes from the other side of the country, Oregon employers can hope that our federal courts will take note of this ruling and apply it in our own backyard in the near future.

What do you do when OSHA wants more?

Let’s say an accident occurs at your workplace tomorrow. Within a short period of time, you may very well receive a visit by representatives of the Occupational Safety and Health Administration (OSHA). Once they arrive at your facility, however, imagine if the investigators tell you they aren’t satisfied with inspecting just the specific area where the accident took place. Instead, they want to expand their inspection to cover your entire facility, top to bottom. Can they do that? That’s the very question answered by United States v. Mar-Jac Poultry Inc.

The case began on Feb. 3, 2016, when a Mar-Jac Poultry employee was injured at the company’s Georgia processing facility while trying to repair an electrical panel. Because the employee was hospitalized, Mar-Jac reported the injury to OSHA. The agency sent an inspection team to the facility within a few days. During the investigation, OSHA found a few potential violations relating to the accident during its limited inspection; in normal situations, that would have been the end of it.

But the inspectors also reviewed Mar-Jac’s OSHA 300 logs for three years, and arrived at the conclusion that the information in the logs suggested additional possible OSHA violations. They pointed to other injuries that had been reported and claimed that they could reveal improper standards as they relate to ergonomic hazards, biological hazards, struck-by hazards, and more. Citing these additional factors, OSHA requested to inspect the entire facility for hazards and not just the area of the accident. Mar-Jac refused to permit an expanded inspection, and OSHA went to court to resolve the dispute.

In March 2016, OSHA sought a warrant from a federal judge to expand the inspection to Mar-Jac’s entire facility, contending that probable cause existed for such an expansion. It noted that agency inspectors had personally witnessed hazards related to the electrical accident, and a review of the OSHA 300 logs showed hazards common to poultry processing facilities. But the judge disagreed, determining that probable cause did not exist to expand the scope of the inspection based upon the injuries reported in the OSHA 300 logs.

Appeals court: no probable cause existed

In its Oct. 9 decision, the U.S. Court of Appeals for the 11th Circuit affirmed the lower court’s decision to block an expansion of the inspection. There are a few important aspects to this decision. First, even though OSHA argued that the existence of injuries on the OSHA 300 logs indicated the presence of hazards at the worksite, which in turn indicated the possibility of violations of federal workplace safety law, the appeals court held that “hazards” and “violations” are distinct concepts. The existence of a hazard does not necessarily establish a violation, it said.

Second, and perhaps more importantly, the 11th Circuit held that the existence of recorded injuries on OSHA 300 logs does not automatically demonstrate that the employer likely violated the Occupational Safety and Health Act. Even though the agency argued that the number of injuries recorded in the OSHA 300 logs showed that Mar-Jac was failing to take adequate steps to prevent workplace injuries, the 11th Circuit correctly noted that OSHA 300 logs provide little detail about the cause of the injury. It concluded by saying that the “existence of injuries does not necessarily mean that the injuries were caused by OSHA violations, or justify the issuance of an administrative warrant for evidence of OSHA violations.”

Additionally, the 11th Circuit found that whether injuries recorded in OSHA 300 logs can lead to reasonable suspicion to support a warrant based upon the logs is a fact-intensive inquiry because the logs “can be relevant to whether hazards exist.” In the Mar-Jac case, however, the court found that the logs did not support such a finding. For example, at this specific worksite, the court found evidence of 25 recorded injuries related to possible ergonomics hazards over the course of three years. In a facility of 1,112 employees, however, this did not create reasonable suspicion that ergonomics violations were likely to exist (but might do so in a much smaller worksite).

Takeaways for employers

�ճ����Mar-Jac decision is a significant victory for employers for two main reasons. First, the existence of a hazard does not necessarily imply the existence of a violation, so be sure not to confuse the two. Second, OSHA might not be able to expand an inspection simply because of injuries recorded in OSHA 300 logs. Rather, a court might force OSHA to provide sufficient evidence that the recorded injuries demonstrate not only that hazards exist at the workplace, but that violations are likely to be found as well.

At this point, this case applies only to employers in the southeastern part of the country. But its reasoning appears sound, and it would not be surprising to see a court on the West Coast apply the same logic. A firm facing an OSHA request to expand an accident-based inspection should contact counsel to determine its legal rights and re-evaluate its response in light of this decision.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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In early October, the Equal Employment Opportunity Commission (EEOC) released its preliminary findings examining sexual harassment in the workplace over the past year. In the wake of the #MeToo movement, no one should be surprised to see the figures rise dramatically. The numbers demonstrate that employers need to be more vigilant than ever when it comes to addressing issues of harassment and discrimination in the workplace.

The numbers for fiscal year 2018 aren’t yet official; the EEOC’s Office of Enterprise Data and Analytics has to validate them before they can be finalized. But even if the final statistics are adjusted slightly in the near future, the Oct. 3 data release presents stark evidence that the #MeToo movement is not just a passing fad. Among the most significant statistics that should capture the attention of every employer:

• Sexual harassment charges with the EEOC increased by more than 12 percent from fiscal year 2017. This represents the first increase in such charges in five years – and a massive one.
• The EEOC’s litigation attorneys filed 41 separate sexual harassment federal lawsuits on their own – more than a 50 percent increase from the previous year.
• Reasonable cause findings in sexual harassment cases increased from 970 to nearly 1,200 – an increase of over 23 percent.
• Successful conciliation proceedings (a formalized mediation process run by EEOC personnel) jumped from 348 to nearly 500 – a 43 percent increase.
• In fiscal year 2017, the EEOC recovered $47.5 million for the victims of sexual harassment through administration enforcement proceedings and litigation. In fiscal year 2018, that number increased to nearly $70 million – a leap of over 22 percent.
• Finally, the EEOC reported that website visits to its sexual harassment page more than doubled over the past year.

Given the increased interest and awareness of sexual harassment in the workplace, it was no surprise that the EEOC announced late last year that it was finalizing updates for guidelines on the subject for the first time in over 20 years. Acting EEOC Chairwoman Victoria Lipnic acknowledged that “the update comes up at a time of burgeoning publicity for sexual harassment and assault in the workplace,” though she said the timing of the update was “purely coincidental.”

After several years of drafting and editing, which included incorporating public opinion on key issues, the EEOC unanimously approved the new guidelines in early November 2017. The draft guidelines – some 70 pages in length – were then sent to the White House’s Office of Management and Budget, with an expectation that they would be quickly approved and released to the public. Almost a year later, we’re still awaiting their release.

The reason for the holdup is uncertain. Lipnic told Bloomberg Law in June that she has been “very persistent in trying to move it along,” but the guidance remains mired in administrative red tape. Some suspect that the delay is political in nature, as the White House awaits the seating of a new EEOC General Counsel and two Republican nominees to the five-person commission. If that’s the case, it’s unlikely we will see any movement until next year’s Congress begins its 2019 session.

A five-step plan for employers

The delay in the guidelines’ release is no excuse to simply sit and wait. As the raw statistics show, the modern sexual harassment revolution is in full swing. For that reason, it’s recommended that employers immediately implement a five-step plan to address this issue.

Step one: adhere to modern standards

An employer that hasn’t updated its sexual harassment policy in the past several years might be behind the curve. Recent court decisions have placed greater responsibility on employers to establish policies that address sexual harassment in a more realistic and thoughtful manner.

Step two: disseminate policies thoughtfully

A policy is worthless if it sits on a shelf and is never accessed by employees. To ensure that a policy is effective, inform employees of their employer’s position on sexual harassment. Devise effective ways to do this besides only handing out a copy at the time of hire.

Step three: train managers to address issues

Training managers is a critical step. An organization could be held automatically liable for any proven sexual harassment if carried about by a managerial employee, so all of one’s hard work developing and disseminating a policy could be deemed irrelevant if managers act inappropriately. Policies need to be drilled into their minds on at least an annual basis through formal training sessions.

Step four: promptly investigate any issues

Once a report of sexual harassment is received, it’s time to take immediate action. If an investigation is delayed until work slows or until an important project is completed, an employer will send a signal to its workforce that this isn’t a priority. Moreover, the employer could face hostile questioning under oath in a subsequent lawsuit about what it was doing that was so important that it trumped the well-being of its workers. Therefore, clear the decks and do everything reasonably possible to make the investigation one’s highest priority.

Step five: enforce standards consistently

Finally, and perhaps most importantly, take action against the accused employee if the allegations against the person are substantiated through one’s investigation. If employees figure out that a policy is toothless, they will lose respect for the organization and be dissuaded from reporting other misconduct. This could lead to legal trouble, but also flagging morale and high turnover among key contributors. The goal in meting out a response is to take action sufficient to ensure that the behavior is not reasonably likely to occur again.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

The post OP-ED: No surprise: sexual harassment statistics blow up in 2018 appeared first on Daily Journal of Commerce.

You may not have realized it yet, but we’re experiencing a unique convergence of multiple trends that will ensure that autonomous vehicles (AVs) will soon change life as we know it.

Vehicles are becoming more electrified and connected with one another, while the exponential growth and viability of artificial intelligence creates new pathways never before imagined. Meanwhile, society is becoming increasingly urbanized, and people are demanding immediacy and the convenience of shared means of transportation. Finally, as environmental, safety and economic factors impact our thinking and our everyday actions, it’s simply a question of if – not when – AVs will regularly populate our streets.

In some respects, the future is already here. Several states and local jurisdictions have already cleared AVs to be tested and driven on public roads. One of the industry leaders in this space – Google’s self-driving offshoot, Waymo – logged its 4 millionth mile of driverless road travel earlier this year. Meanwhile, Uber has reached 2 million such miles and Lyft has completed over 5,000 driverless rides in Las Vegas alone.

While there may be no disputing these facts, you still may be wondering how employers will be impacted and why you should care about these issues, especially if your business is not specifically in the AV industry. Our firm has just launched an Autonomous Vehicles Practice Group to help answer that question and address pertinent issues.

General employment law

Some people have described AVs as “offices on wheels,” and employees will soon be able to work on the move no matter how they commute to the workplace. This could present a whole new spectrum of wage and hour issues. Similarly, you will soon need to reconsider whether driving is “an essential function of the job” when providing accommodations and engaging in the interactive process with disabled employees. Employees who are unable to drive for medical or religious reasons may see AVs as potential accommodations, leading you to alter the way you conduct your HR practices.

Labor and collective bargaining

Once you utilize AVs to handle basic functions, you will be able to reduce the number of employees in driving occupations. If there is a unionized presence at your company, you will need to plan far ahead to address these reductions. Start negotiating terms in new collective bargaining agreements that will provide more flexibility when this change comes. Just as has occurred with automation in manufacturing, you must anticipate that the unions will fight these job losses.

Data privacy and cybersecurity

To ensure maximum safety, AVs will need to communicate with each other, the surrounding infrastructure and a host of third-party platforms. Data privacy and cybersecurity will continue to be a serious concern given widely recognized worries about hacking. Companies in the AV space and employers whose employees utilize connected vehicles will need to take certain steps to ensure compliance with federal and local laws.

First, identify applicable statutory and regulatory requirements to clearly understand your obligations. Then identify information vulnerable to a breach and prepare breach incident response plans to proactively address the worst-case scenario. As an added precaution, train managers and employees to spot and respond to data breach incidents.

Workplace safety

As AVs become more prevalent in industrial settings, they will continue to impact your safety programs. AVs present unique safety concerns that must be addressed in order to avoid accidents and potential citations under OSHA’s machine-guarding standards and general duty clause. You will need to consult with lawyers and industry experts with experience and depth in this space to provide advice and identify unique safety concerns.

Government contracts

To achieve their full potential, AVs must communicate with the world around them. Vehicle-to-infrastructure (V2I) communication involves the exchange of safety and operational data between vehicles and the transportation infrastructure that supports them. Massive upgrades to infrastructure will be required, but state and federal governments lack the technical expertise to implement these changes. They will need to partner with the private sector.

Employers supporting this intensive infrastructure effort should consider the impact of contracting with government agencies that will subject them to Office of Federal Contract Compliance Programs (OFCCP) jurisdiction. You should also consider whether you will be providing supplies or services necessary to the performance of a federal contract such that you become a federal subcontractor under OFCCP’s jurisdiction, leading to a whole host of additional compliance challenges. Various state governments also impose affirmative action compliance requirements.

Gig economy

Finally, to the extent that you utilize the services of gig economy workers – any member of a contingent workforce connected to a certain job or task through a digital platform such as a smartphone app or computer program – you will need to ensure that your classification structures are up to date and compliant with the latest legal standards. The average gig worker is considered an independent contractor by the hiring entity helping to connect the person to his or her next task or willing consumer, but many workers are challenging such classification systems and claiming they are actually employees. You will need a thorough review of your business practices before you hit the road to assess whether you can employ a contractor model.

In short, autonomous vehicles, like all technological advancements before them, have the potential to drive employers crazy. Forward-thinking law firms can help firms rise to the challenge. Consider beginning to adapt now before the seismic changes start occurring.

Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.

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