In a 9-2 vote, the San Antonio City Council voted to require private employers doing business in San Antonio to provide one hour of paid sick leave to employees for every 30 hours worked. The ordinance allows employees to accrue between 48 and 64 hours of paid sick leave to be used if the employee or the employee’s family member is sick or injured; is a victim of stalking, domestic abuse or sexual assault; or otherwise require medical, mental or preventive care.

San Antonio’s ordinance is scheduled to take effect on August 1, 2019 but employers with five or fewer employees will have until 2021 to comply.

A copy of the ordinance can be found here.

Earlier this year, the City of Austin passed the first local ordinance requiring employers in Austin to provide paid sick leave to its employees.  The law was scheduled to take effect on October 1, 2018.  Late last week, the Austin Court of Appeals issued a temporary stay of the ordinance while the Texas Association of Business’ interlocutory appeal of the trial court’s denial of an application for temporary injunction is heard.  This will likely stay enforcement of the ordinance for several months and could extend past the October 1, 2018 effective date.

Meanwhile, San Antonio recently passed a similar sick pay ordinance.   The Texas Legislature is likely to consider bills prohibiting local municipalities from passing such ordinances when it convenes in Summer 2019.

The Court’s order can be downloaded here.

I’m traveling for work this week but today’s Supreme Court opinion is one I have been waiting for all term. In Epic Systems v. Lewis, the Court held that arbitration agreements between employees and employers that require mandatory arbitration of disputes can also require that all disputes be arbitrated individually and not as a class or collection action.  The impact of this case is significant in managing potential claims arising under the Fair Labor Standards Act and Fair Credit Reporting Act.  More on this case later.

You can read the full opinion here.

One of the biggest criticisms I have of the FLSA is that it provides no safe harbor or protection for an employer, who having realized it made a wage and hour mistake, to voluntarily self-report and correct its mistake. Instead, it can encourage employers who learn of a potential FLSA violation that has not otherwise been discovered to continue its current practice hoping that the violation will not be discovered.  This week the U.S. Department of Labor announced its Payroll Audit Independent Determination (PAID) program that takes a step in providing employers with an incentive to voluntarily identify and self-correct wage and hour violations.  The stated purpose of the program is to

Continue Reading Department of Labor Rolls Out Pilot Program for Employers to Correct Inadvertent Wage and Hour Violations

In Texas, absent a valid noncompete, an at-will employee is generally free to compete with the former employer so long as the employee does not take or use the company’s confidential information or trade secrets. Notwithstanding this general rule, employees also have common law fiduciary duties that limit what activities they can engage in prior to resigning employment.  The level of fiduciary duty owed to the company will depend on the duties and responsibilities of the employee and the position within the company.  Employees may generally make preparations to compete while still employed by a company but cannot actively compete while still employed.  What constitutes preparing to compete versus actively competing can often be a blurry line.  A recent case from the El Paso Court of Appeals helps to bring the line into focus.

Continue Reading El Paso Court of Appeals Clarifies Fiduciary Duty At-Will Employees Owe to Employers

This month the City of Austin passed the State’s first municipal paid sick leave ordinance requiring private employers to provide earned sick time to employees. Beginning on October 1, 2018 (and October 1, 2020 for employers with five or fewer employees), employers with employees working in the City of Austin must provide employees with earned sick time.

Continue Reading Austin Passes Law Requiring Private Employers to Provide Paid Sick Leave

The U.S. Department of Labor recently abandoned its six-factor internship test in favor of the seven-factor primary beneficiary test utilized by most Courts. The primary benefit test adopts a temporal limitation for the internship that was not in the old six-factor test and incorporates two elements linking eligibility to the intern’s education programs and academic commitments.  For employers already using internship programs, they should review their policies, agreements and forms to incorporate the new test elements.  Employers considering whether to implement an internship program should tailor the program to insure the individuals can properly be classified as interns rather than employees using the current factors that the DOL described as follows:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. A promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The analysis remains a fact specific inquiry and is intended to be a flexible test.  You can review the DOL’s Fact Sheet on internship programs here.

The #Metoo movement and high profile sexual harassment allegations involving prominent Americans has influenced provisions of the new tax reform law.  The Tax Cuts and Jobs Act signed by President Trump on December 20, 2017, limits the deductibility settlements paid on sexual harassment claims where the settlement agreement contains nondisclosure provisions.  Section 13307 of the Act provides, in relevant part, that:

Payments Related to Sexual Harassment and Sexual Abuse.

No deduction shall be allowed under this chapter for

(1) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or

(2) attorney’s fees related to such a settlement or payment.

Effective Date.  The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

The effect of this new tax law will discourage plaintiffs and companies from including confidentiality or nondisclosure provisions in sexual harassment settlements as those settlements, including the amount of attorneys’ fees received by the employees’ attorneys, will be included in the employees’ gross income and without a corresponding deduction for the employee.  Additionally, it may discourage employers from settling some sexual harassment claims or cause those claims to be valued less by employers who are unable to procure confidentiality or nondisclosure commitments from plaintiffs or are unable to deduction the amount of the settlement as a deduction.

Employers settling sexual harassment or sexual abuse claims should consult with their employment lawyer and tax professionals to evaluate the effect the tax law has on settlements paid or incurred after December 20, 2017.

Facebook ads allow advertisers to target their advertising towards a variety of metrics. For example, you can target an ad to users in a city, state or zip code. You can also target particular professions and users in various age bands. In a recently filed age discrimination lawsuit, several large employers are accused of committing age discrimination by limited their job openings on Facebook to individuals under age 40 (i.e., individuals over age 40 do not see the job openings).

According to the New York Times,

Verizon is among dozens of the nation’s leading employers — including Amazon, Goldman Sachs, Target and Facebook itself — that placed recruitment ads limited to particular age groups, an investigation by ProPublica and The New York Times has found.

The lawsuit was filed by three workers and the Communication Workers of America (a union) against T-Mobile, Amazon, Cox Communications and Cox Media Group alleging that the defendant employers used targeted advertising that systemically excluded older applicants.  The lawsuit intends to achieve class action status on behalf of all similarly situated individuals (i.e., those potential employees who were screened out by the alleged age-based targeted ads) and also intends to add a defendant class of employers to include other employers using targeted job placement advertising that screens out older workers.  You can read the full allegations here.

What sounds elementary, but should not be forgotten in light of the recently filed case, is the fact that employers should not place unlawful restrictions who can view job openings on social media sites like Facebook, LinkedIn and Indeed.

Many employers have adopted various technologies for tracking employee worktime.  One type commonly used is the biometric timekeeping system (e.g. fingerprint or retina scanners) that employees use to clock-in and clock-out of work.  A recent putative class action filed in Illinois should act as a reminder that such biometric systems may be subject to state disclosure, consent and security laws.

In the Illinois lawsuit, a group of Chicago-area employees filed a class-action suit against their employer alleging that it violated Illinois’ biometric information privacy laws by using their fingerprints to track their work hours.  The employees complain that their employer: (1) failed to inform them in writing of the purpose for which their fingerprints were being collected and the length of time they would be stored; (2) did not provide them a publically available retention schedule and guidelines for destroying their fingerprints; and (3) did not obtain written consent to take their fingerprints.

Starting with Illinois in 2008, states began passing biometric information privacy laws. Violation of these laws can carry high penalties, especially for employers.  Employers that use biometric data should stay up to date on these rapidly changing laws to ensure compliance.

Texas has a biometric information privacy law similar to the one at issue in the Illinois class action.  Under Texas law, an employer may not capture a fingerprint, iris or retina scan or use facial geometry (i.e., using facial recognition software) of an individual for a commercial purpose unless the person: (1) informs the individual before capturing the biometric identifier;  and (2) receives the individual’s consent to capture the biometric identifier.  Additionally, employers that do inform their employees and receive their consent to use their biometric information must comply with regulations on selling or otherwise disclosing the information; how the information is stored and secured; and destroying the information within a reasonable time.  Employers that do no follow these rules could be subject to fines up to $25,000 for each violation.

Employers using biometric systems should ensure they comply with the state laws that may restrict the collection, use and retention of such information.