Photo Credit: smlp.co.uk via Flickr (CC by 2.0)
Photo Credit: smlp.co.uk via Flickr (CC by 2.0)

In October, the EEOC unveiled its four year Strategic Enforcement Plan (SEP).  The SEP provides employers insight into areas the EEOC plans to focus on in the coming years.  This heads-up plan allows companies to take steps to ensure their businesses are compliant when there is a knock at the door.

The new SEP does not contain any major changes from the EEOC’s prior strategic direction.  Instead, the EEOC will continue its emphasis on many of the priorities that it set forth in the 2012-2016 four year SEP.  Employers should expect continued focus on the EEOC bringing litigation in large-scale, high-profile and high-impact cases.  Employers should also be careful when classifying workers as independent contractors or temporary workers.

For Fiscal Years 2017-2021, the EEOC has identified six priority areas under this new SEP.  Employers should be mindful of this direction and review their internal policies to confirm they are in conformity with the law in the following areas:

  1. Eliminating Barriers in Recruitment and Hiring

The EEOC will prioritize eliminating discrimination related to recruitment and hiring, including employer policies and practices of exclusion, screening that disproportionately impacts workers in protected categories, and placing of individuals into specific jobs inappropriately based upon protected categories.

Employers:  Review your hiring policies to confirm there are no discriminatory practices in your recruitment and hiring processes or procedures.  For example, revisit your employment applications and determine whether any tests or surveys you make employees complete disproportionately impact a protected class or are inaccessible for persons with disabilities.

  1. Protecting Vulnerable Workers, Including Immigrant, and Migrant Workers, and Underserved Communities from Discrimination

The EEOC will prioritize enforcing equality for immigrant and migrant workers and persons perceived to be members of these groups as well as other underserved communities.

Employers:  Identify those vulnerable, immigrant, and migrant workers and underserved communities in particular areas.  Employers should assess whether they have workforce policies and practices that impact these workers or underserved communities.

  1. Addressing Selected Emerging and Developing Issues

The EEOC will focus on the following areas: (a) inflexible leave policies that discriminate against individuals with disabilities; (b) pregnancy-related limitations that violate the Pregnancy Discrimination Act and the Americans with Disabilities Act Amendments Act; (c) the increasing and continued complexity of employment relationships and work-structures, including those relationships involving temporary workers, staffing agencies, independent contractors, and the on-demand economy (for example, Uber drivers); (d) LGBTQ discrimination; (e) discriminatory practices against persons of Arab, Middle Eastern or South Asian descent, those who are Muslim or Sikh, and persons perceived to be members of these groups.

Employers:  Review your leave policies and ensure leave is considered as a reasonable accommodation for employees who are unable to work or to return to work after a leave due to a disability.  Review your policies on providing accommodations for pregnant workers.  Schedule training for all managers/supervisors and employees to educate them about laws protecting employees against discrimination and each person’s obligation to promote and maintain a discrimination and harassment-free workplace.

Determine whether you are properly classifying workers as employees, independent contractors, or temporary/seasonal workers, as the EEOC continues its focus in this area as it has in the past many years.  Importantly, this SEP acknowledges the changing workforce in the 21st Century.  More and more people are working in alternative or contingent workplace arrangements, including the Uber-like on-demand jobs of today.  This SEP will likely involve the EEOC’s closer look and focus on these types of emerging work arrangements, and employers can expect the EEOC to challenge and litigate these high-profile issues in the coming years.

  1. Ensuring Equal Pay Protections for All Workers

The EEOC will renew its focus on safeguarding compensation systems and ensuring such practices do not discriminate against workers based on race, religion, ethnicity, sex, age, disability, or any other protected categories under the law.

Employers: Employers should review their current compensation policies and practices to ensure that all employees are receiving the pay to which they are entitled.  This may include an audit of the company’s compensation structure.  Companies should consider having outside legal counsel perform such an audit as that process may allow for certain privilege protections.

  1. Preserving Access to the Legal System

The EEOC will target employer policies that impede the ability of employees to pursue their workplace rights.  This includes aiming its efforts at overly broad waivers or releases and mandatory arbitration provisions as well as ending practices that deter employees from exercising their legal rights. The EEOC will also focus on ensuring employers maintain the appropriate applicant and employee data and records as required by EEOC regulations.

Employers:  Review the language in your waivers, releases, and arbitration agreements.  Review the language in your handbook policies to ensure they do not stifle employees ability to exercise their legal rights in the workplace.  Confirm your company is properly retaining documents as required under the law.

  1. Preventing Systemic Harassment

The EEOC will renew its heightened focus on ending harassment in the workplace.  Continued attention will be given to workplace policies and practices.  Again, focus will be given to deterrence measures that put a stop to future harassment.  With an expected increase in litigation, this includes the EEOC bringing enforcement actions in court against companies that seek monetary damages and injunctive relief.

Employers:  Review your handbook policies and procedures on appropriate behavior in the workplace and anti-harassment and retaliation policies.  Train managers, supervisors, and employees about expected behavior in the workplace and everyone’s obligation to promote a harassment and discrimination free workplace.

Employer should start preparing for the next four years today.

6584474_1On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act of 2016 (DTSA).   The DTSA had passed with overwhelming bipartisan support in the Senate and House.  It became effective upon its enactment.

In an area that has long been the province of state law, the DTSA now allows a company to bring a federal claim with federal remedies and federal jurisdiction for the misappropriation of trade secrets.   Nothing in the act is intended to preempt any other provision of law.  It is intended to supplement state law.

This new federal civil remedy will allow for a more uniform federal law on protecting a business’s trade secrets.  Previously, companies had to rely upon various state laws for protection or the contractual remedies set forth in their employment, confidentiality/nondisclosure, or noncompetition agreements.  With this uniformity also comes the ability for companies to file actions in federal court.

Remedies.  The DTSA sets forth federal remedies for the misappropriation of trade secrets, which include the following.

  1. Ex parte seizures of the property at issue in “extraordinary circumstances” to “prevent the propagation or dissemination of the trade secret.”  In any order for seizure issued, the court must set forth specific findings of fact and conclusions of law to justify the seizure.  Any order for seizure must also describe the property with reasonable particularity and provide for the narrowest seizure of property necessary to achieve the purpose of the act.  The court must also set a hearing no later than seven (7) days after an order issues.
  2. Monetary damages for actual loss and unjust enrichment caused by the misappropriation of the trade secret, or a reasonable royalty in exceptional circumstances that render an injunction inequitable.
  3. For willful and malicious misappropriation, a party may recover exemplary damages of up to two-times the amount of monetary damages and its attorney’s fees.
  4. If a claim is made in bad faith or a motion to terminate an injunction is made or opposed in bad faith, the prevailing party is entitled to its reasonable attorney’s fees.
  5. In an action brought for wrongful or excessive seizure of property, a party’s recovery of damages for such wrongful or excessive seizure will not be limited by the required security or bond posted with the court.

A federal court is prohibited from entering an order except where there is evidence of threatened misappropriation and not merely on the information the person knows.  Thus, the inevitable disclosure doctrine recognized by some states does not apply under this federal law.  The DTSA also prohibits entry of injunctions that “conflict with an applicable State law prohibiting restraints on the practice of a lawful profession, trade, or business.”

Whistleblower Protections.  The DTSA specifically provides a person immunity from civil and criminal liability under both federal and state trade secret law.  This immunity extends to whistleblowers who disclose trade secrets “in confidence” to a federal, state or local government official, directly or indirectly, or to an attorney solely for the purpose of reporting or investigating a suspected of violation of the law.  Immunity also extends to persons who file a lawsuit where the filings are made under seal and the trade secret is not disclosed except pursuant to a court order.

Notice Requirements.  In addition to these whistleblower protections, the DTSA requires employers to provide notice of the immunity to an employee in any contract or agreement that governs the use of confidential or trade secret information.  Alternatively, an employer may fulfill this notice requirement by cross-referencing in the contract or agreement a policy document it provided to the employee that details the employer’s reporting policy.  This may include a provision in an employment handbook or some other policy document.

Of note, the DTSA broadly defines “employee” to include “any individual performing work as a contractor or consultant for an employer.”   This expands those persons who are covered by these whistleblower protections.  The notice requirement is prospective as it applies to “contracts and agreements that are entered into or updated after the date of enactment.”

In an effort to obtain compliance with this notice provision, the DTSA provides that if an employer fails to give the required notice to an employee, the employer may not be awarded exemplary monetary damages or attorney’s fees in an action brought against that employee.  The DTSA, however, provides no guidance on the required disclosure or cross-referenced policy language.

Statute of Limitations.  A private civil action under the DTSA must be brought within “three years after the date on which the misappropriation with respect to which the action would relate is discovered or by the exercise of reasonable diligence should have been discovered.”

What should businesses do in the wake of this new federal law?  Companies should review their agreements that provide for confidentiality or similar trade secret provisions and amend them accordingly moving forward.  These may include employment agreements, noncompetition agreements, and business agreements with independent contractors or consultants.  To fully enjoy the federal remedies allowed, an immunity notice should be included in all new and updated employee agreements as well as contractor and consultant agreements with independent contractors.  Employers should also review their handbooks and policies relating to protection of confidential or trade secret information so that they may also rely on a policy document for compliance.

When is the last time your company did a comprehensive review of its job descriptions?  Never mind; it doesn’t matter.  It’s time to do it again.

The job description is an incredibly valuable tool for an employer, and an astounding number of businesses either do not have them, do not update them,  or spend so little time on them that they are useless.  As I discussed in my June 30, 2015 blog post The Wait is Over: New FLSA Regulations Issued by DOL, the US Department of Labor issued new proposed regulations for determining whether employees meet the Executive, Administrative and Professional exemptions to the FLSA.  Although the proposed regulations address only the salary test, it is very possible that the DOL will also look at the duties tests in conjunction with this comprehensive review.  Even if the duties tests are not amended, now is an excellent time for employers to review their job descriptions and how they have classified their employees and make the appropriate changes.  Undoubtedly, almost every company will discover that at least some employees need to be reclassified and some job descriptions need to be changed.

Properly drafted and accurate job descriptions provide important evidence to justify an exempt classification in the event of a DOL audit.  In addition, job descriptions are critical documents in the following scenarios:

Performance Evaluation:  An accurate job description provides an applicant or new employee with a comprehensive description of his or her job responsibilities.  When it comes time for the annual performance evaluation or a performance discussion, it is important to have in writing the duties of the position against which performance can be measured.

ADA Accommodation Requests:  Most employers are obligated under the Americans with Disabilities Act (“ADA”) to provide reasonable accommodations to otherwise qualified disabled individuals.  An accommodation must be provided if it allows the employee to perform the essential functions of the job without causing an undue hardship to the company.  In order to determine whether that request can be fulfilled, the employer and employee must engage in an interactive process to discuss the needs of both parties.  Without a written document setting out the essential functions of the job, it is almost impossible for the employer to document how it undertook the interactive process and to justify the decision made. In the event of a discrimination claim, the job description could help provide important defenses.

Return to Work/Fitness for Duty: In order to evaluate whether an employee out on worker’s compensation leave can return on light duty or whether an employee previously on FMLA leave due to a serious health condition can return and safely perform his or her job, a medical examination is likely required.  It is critical that the examining physician be provided a comprehensive job description setting out the job requirements.

In order for a job description to be considered complete it should contain the following depending on the nature of the job:

  • Educational requirements including degrees or certifications
  • Skills and experience
  • Soft skills such as communication, empathy for others, ability to interview, need to work in a team environment or open concept space which might be noisy
  • Hours and days of work
  • Physical requirements including lifting, bending, twisting, standing
  • Amount of discretion and judgment required for the position
  • Responsibilities for managing others

The task of creating or even reviewing and updating job descriptions is arduous.  It requires the input of many:  upper management, direct supervisors, human resources and the employee who performs the job.  Perhaps even an occupational nurse should be consulted.  Although the process is time consuming and challenging, it is a critically important risk management tool to protect your business at many different levels and from many different potential challenges.