4/24/24: Important Reminders for Employers: Numerous Changes Take Effect on July 1, 2024

April 24, 2024

By Becky Zuschlag

July 1 is fast approaching and will bring with it several changes employers should be aware of, including an increase in Oregon’s minimum wage and statutory changes to the protected reason eligible employees may take leave under the Oregon Family Leave Act (OFLA). Additionally, employers covered by the federal Family and Medical Leave Act (FMLA) should consider updating their FMLA leave year to align with OFLA and Paid Leave Oregon.

Minimum Wage Increase

BOLI recently announced Oregon’s new minimum wage rates, which reflect a 50-cent increase to the current rates based on year-over-year inflation. The new minimum wage rates for each region effective July 1, 2024, are:

• Portland metro area within the urban growth boundary: $15.95 per hour

• Standard minimum wage: $14.70 per hour

• Non-urban Oregon: $13.70 per hour

As a reminder, employers are required to post current minimum wage posters in the workplace, in a conspicuous location that employees frequently access. Updated minimum wage posters will be available for download on BOLI’s website by June 15, 2024.

OFLA & Paid Leave Oregon

As outlined in a prior Barran Liebman E-Alert, the Oregon legislature repealed OFLA provisions that are duplicated by Paid Leave Oregon to minimize stacking of leave under these laws. Accordingly, beginning July 1, OFLA and Paid Leave Oregon will no longer run concurrently and OFLA will only cover the following absences:

• Home care for an employees’ child for any illness, injury, or condition that requires home care (including both a serious health condition and non-serious health condition), and during school closures caused by public health emergencies.

• Bereavement leave, which is now limited to two weeks per family member and capped at four weeks per leave year.

• Pregnancy disability leave.

• From July 1, 2024, through December 31, 2024, OFLA will temporarily provide an additional two weeks of leave to effectuate the legal process for the placement of a foster child or adoption. Paid Leave Oregon will begin covering this type of leave beginning January 1, 2025.

OFLA Leave Year

All Oregon employers must adopt a forward-looking leave year. In the past, employers had many options for tracking an employee’s leave. But under changes to the law, effective July 1, employers will be required to designate the OFLA leave year as the period of 52 consecutive weeks beginning on the Sunday immediately preceding the date on which an employee’s OFLA leave begins.

FMLA Leave Year

Employers who are covered by FMLA should strongly consider aligning their FMLA leave year with the OFLA and Paid Leave Oregon leave year. FMLA requires an employer who intends to change their method for defining the FMLA leave year to provide employees with at least 60 days advance notice of the change. Accordingly, employers who wish to align their FMLA leave year with OFLA and Paid Leave Oregon must notify their employees of the upcoming change by May 1, 2024.

Click to access a PDF of this E-Alert.

For questions about compliance with upcoming changes, contact Becky Zuschlag at 503-276-2151 or bzuschlag@barran.com.

For more information about changes to leave legislation, join our upcoming May 29th webinar: “Complying with New Leave Legislation: Best Practices for Employers.”

4/24/24: U.S. Federal Trade Commission Bans Non-Competition Clauses

April 24, 2024

By Chris Morgan & Missy Oakley

Yesterday, the U.S. Federal Trade Commission (“FTC”) issued its Non-Compete Clause Rule (the “Final Rule”), banning most employers across the United States from enforcing non-competition provisions as a term or condition of employment and largely voiding existing non-competition clauses.

Things to Know:

• The Final Rule is not in effect yet. It becomes effective 120 days following publication in the Federal Register (the “Effective Date”). However, a myriad of expected legal challenges could significantly delay implementation.

• The Final Rule only applies to employers subject to the FTC Act, which covers for-profit entities with some exceptions (e.g., banks, savings and loan institutions, Federal credit unions, and common carriers). Notably, the FTC Act, and thus the Final Rule, does not apply to non-profits. However, the FTC cautions that the Final Rule could extend to non-profits despite their tax-exempt status if the entity is actually organized for profit, which is determined using a two-part test.

• The Final Rule defines “non-compete clause” as “a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from (1) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (2) operating a business in the United States after the conclusion of the employment that includes the term or condition.”

• The Final Rule will serve to ban non-compete clauses that are entered into after the Effective Date for all workers. However, the Final Rule allows continued enforcement of existing non-competes entered into prior to the Effective Date if the employee is considered a “senior executive.” A “senior executive” is defined as a worker earning more than $151,164.00 annually who is in a “policy making position.” However, Oregon restrictions on non-competition provisions under ORS 653.295 will still apply and should be considered by employers in determining the enforceability of existent non-compete clauses for senior executive workers. 

• Upon its effective date, the Final Rule will void all existing non-compete clauses for individuals who are not considered senior executives and will require employers to affirmatively provide employees subject to existing non-compete clauses with notice that those clauses are no longer enforceable.

• The Final Rule expressly does not apply to a cause of action related to an employee’s non-competition agreement (such as a violation of an existing non-competition agreement) which accrued prior to the Effective Date of the Final Rule.

Click to access a PDF of this E-Alert. 

For questions relating to the FTC’s Final Rule or for any other matters involving restrictive covenants in the workplace, contact Chris Morgan at 503-276-2144 or cmorgan@barran.com, or Missy Oakley at 503-276-2122 or moakley@barran.com.

4/23/24: DOL Increases Salary Requirements for White-Collar & HCE Exemptions

April 23, 2024

By Missy Oakley & Andrew Schpak

Today, the U.S. Department of Labor (“DOL”) announced the Final Rule: Restoring and Extending Overtime Protections. The final rule amends the Fair Labor Standards Act regulations by increasing the salary threshold required for the bona fide executive, administrative, and professional exemptions (“white-collar exemptions”) in accordance with the following schedule:

• Current: Salary threshold is $684 per week ($35,568 per year).

• July 1, 2024: Salary threshold increases to $844 per week ($43,888 per year).

• January 1, 2025: Salary threshold increases to $1,128 per week ($58,656 per year).

The DOL’s final rule also increases the total annual compensation threshold for the highly compensated employee (“HCE”) exemption in accordance with the following schedule:

• Current: Total annual compensation is $107,432.

• July 1, 2024: Total annual compensation increases to $132,964.

• January 1, 2025: Total annual compensation increases to $151,164.

On July 1, 2027, and every three years thereafter, the salary threshold for the white-collar exemptions and the total annual compensation for the HCE exemption will increase again, at an amount “to be determined by applying to available data the methodology used to set the salary level in effect at the time of the update.” 

The final rule does not make any changes to these exemptions’ duties tests.

Employer Next Steps

Employers should begin reviewing the salaries of exempt employees classified under the bona fide executive, administrative, and professional exemptions or the highly compensated employee exemption to ensure employees are properly classified according to the new salary requirements by the dates listed.  If the employees at issue will fall below the salary threshold effective July 1, 2024, or January 1, 2025, employers will need to either increase the salaries to meet the corresponding threshold or else re-classify the workers as non-exempt.

Click to access a PDF of this E-Alert.

For questions about the DOL’s salary requirements or for any other wage and hour inquiries, contact Missy Oakley at 503-276-2122 or moakley@barran.com, or Andrew Schpak at 503-276-2156 or aschpak@barran.com.

4/18/24: More Changes to Washington Paid Sick Leave

April 18, 2024

By Missy Oakley

Revised Definition of Construction Worker

Earlier this year, Washington began requiring employers to pay out the balance of any accrued but unused paid sick leave to construction workers upon separation from employment. Last month, Washington passed Senate Bill 5979 which revised the definition of “construction worker.” Under the new definition, “construction worker” is defined as “a worker who performed service, maintenance, or construction work on a jobsite, in the field or in a fabrication shop using the tools of the worker’s trade or craft.” This new definition became effective on March 13, 2024.

Expanded Reasons for Taking Paid Sick Leave

In the same legislative session, Washington passed Senate Bill 5793 which expanded the reasons for which employees can take Washington paid sick leave. Beginning January 1, 2025, employees can take paid sick leave when their child’s school or place of care has been closed after the declaration of an emergency by a local or state government or agency, or by the federal government.

Expanded Definitions of Family Member & Child

Senate Bill 5793 also revised the definition of “family member” to include “any individual who regularly resides in the employee’s home or where the relationship creates an expectation that the employee care for the person, and that individual depends on the employee for care. ‘Family member’ includes any individual who regularly resides in the employee’s home, except that it does not include an individual who simply resides in the same home with no expectation that the employee care for the individual.” The definition of “child” now includes “a child’s spouse.” The bill also defined “grandchild” as “a child of the employee’s child” and “grandparent” as “a parent of the employee’s parent.” These revised definitions become effective on January 1, 2025.

Click to access a PDF of this E-Alert.

For questions about paid sick leave, contact Missy Oakley at 503-276-2122 or moakley@barran.com.

4/17/24: U.S. Supreme Court Holds That a Lateral Transfer May Be Discrimination Under Title VII

April 17, 2024

By Amy Angel & Missy Oakley

Today, the U.S. Supreme Court held in Muldrow v. City of St. Louis that a lateral transfer of an employee to a position with similar rank and pay can be an adverse employment action under Title VII of the Civil Rights Act of 1964 even if the employee cannot show that the transfer caused a “materially significant disadvantage.” 

The Facts of the Case

Ms. Muldrow worked as a plainclothes officer in the St. Louis Police Department’s (“Department”) Intelligence Division. After a new commander took over the Intelligence Division, he asked the Department to transfer her out of the unit and replace her with a male officer. Against her wishes, the Department transferred her to a uniformed job within the Department.

Ms. Muldrow sued the Department alleging discrimination based on her sex in violation of Title VII based on her transfer to a lesser position. While her rank and pay remained the same in her new position, “her responsibilities, perks, and schedule did not.” She described her situation as follows:

“I went from straight days, weekends off with a take-home car and more visibility and responsibility within the Department to a rotating schedule with few weekends off, assigned to … uniformed patrol,” with “responsibilities being limited to that of administrative work” and “supervising officers on patrol.”

The Court’s Decision

The lower courts ruled that Ms. Muldrow’s Title VII claim failed because she could not show that her transfer caused a “materially significant disadvantage” because her rank and pay remained the same.

The Supreme Court disagreed and held that “[a]lthough an employee must show some harm from a forced transfer to prevail in a Title VII suit, she need not show that the injury satisfies a significance test. Title VII’s text nowhere establishes that high bar.”

The Supreme Court’s decision means that an employee can now prevail on a Title VII discrimination claim if they can show a forced transfer was discriminatory and caused some harm—which does not have to be significant.

What Does This Mean for Employers? 

This decision means that employers should carefully review transfers and changes to assignments and job responsibilities to evaluate whether they could be viewed as discriminatory the same way as they would review a demotion or termination of employment. 

Click to access a PDF of this E-Alert.

For any questions, contact Amy Angel at 503-276-2195 or aangel@barran.com, or Missy Oakley at 503-276-2122 or moakley@barran.com.

3/12/24: Oregon Employers: Watch Out for Tip Pooling Rules

March 12, 2024

By Chris Morgan, Natalie Pattison & Andrew Schpak

Oregon employers who use a tip pool to collect and distribute tips should review their current practices as soon as possible to ensure compliance in the face of increased enforcement action from the United States Department of Labor.

How are employers at risk?

Although employers are required to follow all federal and state regulations which apply to employee tip pooling—liability most often arises where employers fail to follow regulations on which employees may share in a tip pool. With very limited exceptions for tips received from customers directly for services that a manager or supervisor “directly” and “solely” provides, individuals considered “managers” or “supervisors” under federal regulations may not share in a tip pool.

Why is this important?

Even a small mistake on a single payroll could cause an enormous problem.

In 2021, the United States Department of Labor published their Final Rule, making important amendments to existing laws on tip pooling. The DOL’s Final Rule allows additional enforcement mechanisms and provides the Department with increased authority to assess civil money penalties against employers who unlawfully share in tip pools—irrespective of whether the employers’ actions were repeated or willful. Employers who fail to comply with applicable federal regulations regarding tip pooling also face a significant risk of a federal audit, as well as private litigation and potential tax consequences.

What if I have been including supervisors/managers in my existing tip pool, or have other questions or concerns about my tip pooling practices?

Call an employment lawyer immediately. Better yet, register for Barran Liebman’s upcoming March 20th webinar where we will discuss tip pooling and other important wage and hour topics.

Click to access a PDF of this E-Alert.

For tip pooling or any other wage and hour questions, contact Chris Morgan at 503-276-2144 or cmorgan@barran.com, Natalie Pattison at 503-276-2104 or npattison@barran.com, or Andrew Schpak at 503-276-2156 or aschpak@barran.com.

3/11/24: Important Updates to OFLA & Oregon Sick Time Rules

March 11, 2024

By Amy Angel & Becky Zuschlag

On March 1, the Oregon Bureau of Labor and Industries (BOLI) amended the Oregon Family Leave Act (OFLA) and sick time rules. While many of the changes simply clarify definitions and eliminate unnecessary statutory citations, employers should take note of the following key changes:

Attestation for Family by “Affinity”: An employer may require an employee who uses OFLA or sick time to care for or to grieve the death of a family member who is related by affinity to attest in writing that the employee and the family member have a significant personal bond similar to a family relationship. The rule includes an example of the written attestation form and common examples of when a relationship is like a family relationship.

Employee Eligibility: When determining an employee’s eligibility for OFLA leave based on days and average hours worked, an employer must count any hours of protected leave taken, including OFLA leave.

Domestic Partners: Aligns the definition of “family member” to the updated statutory definition by eliminating the requirement that a domestic partner be the same gender as the employee.

Pregnancy Termination & Fertility Treatments: Amends the definition of “serious health condition” and “pregnancy disability” to include a period of disability due to fertility or infertility treatment or pregnancy termination.

Transitioning the OFLA Leave Year: Clarifies that when an employer transitions their OFLA leave year to the rolling forward leave year, employees must be provided a new, full bank of leave.

Fitness for Duty Certifications: Before returning an employee to work after taking OFLA leave for the employee’s own serious health condition, an employer may require the employee to provide verification from the employee’s health care provider that the employee is able to resume work provided that the employer applies this practice uniformly and pays for the medical verification.

Sick Leave & Paid Leave Oregon: Clarifies that an employee may use sick leave for any Paid Leave Oregon-qualifying purpose, including when an employee is receiving Paid Leave Oregon benefits.

Between these rule changes and the legislative changes to OFLA expected to go into effect on July 1, employers should start now with reviewing and revising their OFLA and Oregon sick leave policies and procedures.

Click to access a PDF of this E-Alert.

For questions regarding the change to OFLA leave or Oregon paid sick time, contact Amy Angel at 503-276-2195 or aangel@barran.com, or Becky Zuschlag at 503-276-2151 or bzuschlag@barran.com.

3/7/24: Update: Dartmouth Basketball Players Vote to Unionize

March 7, 2024

By Nicole Elgin & Natalie Pattison

Dartmouth Update

In a historic vote, Dartmouth College’s men’s basketball players voted 13-2 in favor of joining Service Employees International Union (SEIU), Local 560. While student athletes have tried to form unions in years past, this makes Dartmouth the country’s first unionized college sports team. Our previous E-Alert details the recent NLRB board decision that paved the way for this vote.

Broader Implications for Colleges & Universities

Dartmouth’s vote to unionize is just another step in a broader trend of converting student athletes to employee status under several laws, not just the National Labor Relations Act. For instance, pending litigation in the Third Circuit (Johnson v. NCAA) asks whether student athletes could be employees under the Fair Labor Standards Act because of their participation in interscholastic athletics. The implications of converting student athletes to employee status are broad. For example, considerations could include wage and hour scheduling requirements, meal and rest breaks, overtime tracking, tax implications, employee benefits programs, non-payroll expenses, workers’ compensation, paid and unpaid protected leave, and other federal and state laws governing employment (e.g., pay equity laws, the Affordable Care Act, age discrimination laws, etc.).

Evolving Discussion for All Employers

All employers should be paying attention to these developments, as they signal a larger discussion about how the idea of employees is evolving more broadly (not just in collegiate athletics) and how employment and labor law protections are being applied in a broader sense than they have been in the past. Employers should stay abreast of these developments, as the agency often works like a pendulum depending on the administration. Oregon employers should also note that state law covering public sector employees is different (but often more generous) to employees than federal law in Oregon. 

Click to access a PDF of this E-Alert. 

For any questions, contact Nicole Elgin at 503-276-2109 or nelgin@barran.com, or Natalie Pattison at 503-276-2014 or npattison@barran.com.

2/28/24: Big Changes to OFLA & Paid Leave Oregon Are Coming (Again)

February 28, 2024

By Amy Angel & Stacie Damazo

The Oregon legislature has passed Senate Bill 1515 A to repeal the provisions of the Oregon Family Leave Act (“OFLA”) that are duplicated by Paid Leave Oregon and to minimize stacking of leave under these two laws. We anticipate that Governor Tina Kotek will sign the bill into law in the coming days. Except as noted below, the majority of the changes will go into effect on July 1, 2024, which means Oregon employers have four months to prepare for the changes.

Here are the key highlights:

• OFLA will no longer cover parental leave or serious health condition leave. Leave for these purposes will only be available under Paid Leave Oregon.

• Sick child leave under OFLA is expanded. An employee may take leave under OFLA to care for a child suffering from any illness, injury, or condition that requires home care (even if it may qualify as a serious health condition). An employee may still also use OFLA sick child leave to care for a child whose school or place of care has been closed in conjunction with a statewide public health emergency declared by a public health official.

• Bereavement leave under OFLA is capped at four weeks per year. An employee’s entitlement to bereavement leave under OFLA will be capped at four weeks per leave year.

• OFLA still allows for an additional 12 weeks of pregnancy disability leave. In addition to any other OFLA leave used for sick child leave and bereavement leave, an employee may still take up to 12 additional weeks of OFLA leave for their own pregnancy disability in the same leave year.

• OFLA is temporarily amended to cover two additional weeks of leave for the fostering or adoption process.  In addition to the OFLA leave above, between July 1, 2024, and December 31, 2024, an employee may take an additional two weeks of OFLA leave to effectuate the legal process for the placement of a foster child or the adoption of a child.

• OFLA leave will be in addition to leave under Paid Leave Oregon. That is, OFLA leave may not be taken concurrently with any leave under Paid Leave Oregon.

•  Use of PTO during a period of leave under Paid Leave Oregon is changing (again). An employee will now be permitted to decide whether to use any accrued paid time off in addition to their Paid Leave Oregon benefits, as long as the total amount received by the employee does not exceed their regular pay. However, an employer may still permit an employee to use their paid time off such that the total combined amounts exceed their regular pay.

• Family leave under Paid Leave Oregon will include leave for the fostering and adoption process. Beginning January 1, 2025, Paid Leave Oregon will include leave to effectuate the legal process required for the placement of a foster child or the adoption of a child.

• Predictive scheduling relief. Employers will be exempt from the predictive scheduling compensation penalties if (1) an employee provides less than 14 days’ notice of the need for or return from leave under Paid Leave Oregon, OFLA, or any other leave under ORS Ch. 659A, and (2) the employer makes a change to the schedule of an employee who was temporarily assigned to specific shifts to cover for an employee on leave.

In response to these changes, employers should take the following actions:

1. Revise leave policies, including OFLA, Paid Leave Oregon, as well as FMLA policies if they are integrated with an OFLA policy.

2. Update leave tracking systems.

3. Inform employees about these upcoming changes.

4. Watch for revised rules and posters.

Click to access a PDF of this E-Alert.

To discuss how SB 1515A impacts your leave policies and administration, contact Amy Angel at (503) 276-2195 or aangel@barran.com, or Stacie Damazo at (503) 276-2121 or sdamazo@barran.com.

2/21/24: Be Aware of the Corporate Transparency Act

February 21, 2024

By Jeff Robertson & Iris Tilley

Flying under the radar in the general news is the Corporate Transparency Act (“CTA”), requiring filing from certain eligible entities.

The CTA is intended to counter the use of shell companies utilized for financial and tax fraud and illicit corporate practices.  While there are few bad actors, the CTA requires a large number of entities to file information regarding the individuals who own or control the company.  If this is the first time you have heard of the CTA, you are not alone. 

Reporting Entities

A Reporting Company is broadly defined.  It means a company that is created by the filing of a document such as a registration with the State Corporation Division.  Exempt entities include those entities already regulated elsewhere such as public companies, insurance providers, 501(c)(3) nonprofits (but not other nonprofit organizations), and governmental entities.  There is also an exemption for “large operating companies.”

Entities Formed After 1/1/2024 vs. Existing Companies as of 1/1/2024

Anyone forming a new entity in 2024 should evaluate whether they must file under the CTA within 90 days of formation.  Entities operating prior to 1/1/2024 have a longer period to consider filing. 

Penalties

As the CTA is part of a broader national security package, the penalties for noncompliance are steep and serious. 

Next Steps

All entities should make a considered evaluation regarding the CTA impact and filing requirements.  Contact Jeff Robertson, Iris Tilley, or your Barran Liebman attorney to receive additional information regarding the CTA and its requirements. Jeff Robertson can be reached at 503-276-2140 or jrobertson@barran.com, and Iris Tilley can be reached at 503-276-2155 or itilley@barran.com.

Click to access a PDF of this E-Alert.

2/20/24: NLRB Regional Director Rules that Dartmouth Basketball Players are Employees

February 20, 2024

By Nicole Elgin & Natalie Pattison

On February 5, 2024, the National Labor Relations Board (NLRB) Regional Director for Region 01, issued a decision that Dartmouth College’s men’s basketball players are employees under the National Labor Relations Act (NLRA) and may vote to unionize (a vote which could make them the first unionized NCAA athletes).

Dartmouth Basketball Players are Employees

The Regional Director concluded the Dartmouth men’s basketball players are employees under the NLRA based primarily on the following: 

A. The basketball players perform work that benefits Dartmouth, regardless of whether the basketball program is profitable; 

B. Dartmouth has the right to control the work performed by the men’s varsity basketball team; and

C. The basketball players perform that work in exchange for compensation.

Compensation: Although the players do not receive athletic scholarships, the Regional Director concluded that they still received compensation in other ways, including equipment and apparel (e.g., basketball shoes), tickets to games, lodging, meals, the benefits of Dartmouth’s Peak Performance program, and other fringe benefit payments such as academic support, career development, sports and counseling psychology, sports nutrition, leadership and mental performance training, strength and conditioning training, sports medicine, and integrative health and wellness. According to the Regional Director, another form of compensation is the benefit of “early read” for admission prior to graduating high school.

Vote to Unionize Scheduled

Upon determining that the basketball players are employees within the meaning of the NLRA, the Regional Director issued a direction of election to allow the approximately fifteen students who comprise the men’s basketball team to vote on whether to be represented by Service Employees International Union (SEIU), Local 560.

A vote to unionize is scheduled for March 5, 2024.

Appeal of Decision Likely

Dartmouth is reportedly appealing the decision to the NLRB in D.C. The NLRB previously addressed student-athletes at private universities in a 2015 case involving Northwestern University, but ultimately declined to exercise jurisdiction over the football players seeking to unionize.

Other Proceedings & Proposals Pending

The overarching question in this case is a familiar one: are student-athletes employees? Although the NLRA does not apply to public employers, the Dartmouth ruling is just the latest development in a wave of various proposals and proceedings that could require colleges and universities to convert their student-athletes to employee status. (See our previous E-Alert for more details on one of those proposals: the College Athlete Right to Organize Act).

Click to access a PDF of this E-Alert.

For questions, contact Natalie Pattison at 503-276-2104 or npattison@barran.com, or Nicole Elgin at 503-276-2109 or nelgin@barran.com.

2/8/24: Can the NLRB Really Require Employers to Reopen Closed Stores?

February 8, 2024

By Nicole Elgin & Joshua Waugh

On December 13, 2023, the prosecutorial wing of the National Labor Relations Board (NLRB) moved to compel Starbucks to “immediately reopen” stores that it had recently closed. While only eight of the stores had unionized, the NLRB counsel seeks to force Starbucks to reopen 23 stores.

Can the NLRB force employers to reopen closed stores?

Yes, unless the employer shows that it would be “unduly burdensome.” The National Labor Relations Act (NLRA) gives the Board broad remedial powers, including the power to order remedies that “make whole” the employee who was wronged.

Take the RAV Truck & Trailer Repairs series of decisions from 2020 - 2022. In 2020, the NLRB found that an employer unlawfully laid off employees who signed union authorization cards and partially closed down in 2018 with the purpose of chilling union activity. The Board ordered the employer to reopen its business, restore operations as they had been in 2018, reinstate two employees, and bargain with the union.

The employer appealed and the D.C. Circuit Court of Appeals sent the case back to the NLRB noting that “the Board typically orders an employer to restore the status quo by reestablishing a discriminatorily closed operation unless the employer can show that such a remedy would be unduly burdensome.” Here, the Court said that the NLRB “failed to cite any authority to support the legal legitimacy of an order … to compel a company to ‘reopen’ an operation that no longer exists due to the loss of a lease …”.

On remand, the NLRB found that the employer showed an undue burden because it no longer had a lease and restoration would have required renewing a lease that ended 4 years prior and none of the employer’s other facilities were suitable to house RAV.

When is closing a store unlawful under the NLRA?

The Labor Board generally looks to a line of cases stemming from the Supreme Court case Textile Workers Union v. Darlington Manufacturing Company to determine whether or not store closures are unlawful. In that case, the Supreme Court held that an employer has the right to completely terminate its business, even if motivated by antiunion animus. However, a partial closing is unlawful if it is “motivated by a purpose to chill unionism.” Generally, the factors identified in Darlington that are used to identify when an employer’s closure constitutes an Unfair Labor Practice under the NLRA are:

1. Whether the employer has an interest in another business that could benefit from discouraging unionization via store closure;

2. Whether the employer closed the store in question for the purposes of chilling union activity; and

3. If it is foreseeable that employees at another branch or store will be discouraged from engaging in unionization.

Employers should seek labor counsel when considering a partial closure, especially if there is known union activity.

Click to access a PDF of this E-Alert.

Employers with questions about business closures and labor compliance should contact Nicole Elgin at 503-276-2109 or nelgin@barran.com, or Joshua Waugh at 503-276-2138 or jwaugh@barran.com.

2/7/24: Remember to Storm-Proof Your Inclement Weather Policy

February 7, 2024

By Amy Angel

With the ice and snowstorm causing so much disruption last month, many employers are reviewing their inclement weather policies to ensure compliance with best practices and applicable laws, especially when it comes to whether to pay employees for missed time.  Here are a few considerations to be sure you are ready for the next major weather event.

Be sure your policies are clear on how and when employees will be notified in the event you decide to close due to inclement weather.  For unionized employers, inclement weather policies are mandatory subjects of bargaining.

Even if you remain open, most businesses should leave it to each employee to decide whether it is safe for them to report to work based on the conditions in their immediate area.  State who they must report to in the event they will be late or are unable to report to work.  If employees are expected to work from home, your policy should address that as well.

Be clear whether an employee will be paid for missed time or if they must use accrued paid time off.  Non-exempt employees must be paid for all hours actually worked, including time spent working from home or an alternate location.  While a nonexempt employee paid by the hour does not need to be paid for any time missed due to inclement weather, they can be allowed (or required) to use paid time off to cover any time they miss.  

In general, an employer must pay exempt employees their full salary for any workweek in which they perform any work.  If the business is closed for less than a full workweek due to inclement weather, exempt employees who are ready and willing to work must receive their full salary for that week if they performed any work during the workweek.  If the business remains open and an exempt employee chooses not to report to work, the employer is not required to pay them so long as the employee performs no work during that day.  Keep in mind that checking email from home would be considered performing work.

But what if a business closes its offices and instructs their employees to work from home?  Whether to pay exempt employees under these circumstances may depend on the employee’s individual circumstances.  For example, whether you must pay them may depend on why they are not working.  Is it because their power or internet is out?  Or is it because they chose to spend the day sledding? 

Regardless, an employer may require exempt employees to use accrued paid time off for time missed due to inclement weather.  However, if an exempt employee has exhausted their PTO, there are still circumstances in which they must still be paid their regular salary. 

Click to access a PDF of this E-Alert.

For questions relating to inclement weather policies and how to pay employees during inclement weather or other emergency closures, contact Amy Angel at 503-276-2195 or aangel@barran.com.

2/5/24: Restrictions on No-Rehire Provisions in Workers’ Compensation Settlement Agreements

February 5, 2024

By Becky Zuschlag & Hannah LaChance

Though every workers’ compensation claim is different, it is not uncommon for a claim to end with a settlement agreement, which is often accompanied by an additional agreement that includes an employment release. It used to be common practice for the employment release agreement to include a “no-rehire” provision. A no-rehire provision is a provision that prohibits a worker from seeking future employment, reemployment, or reinstatement with the employer.

When HB 3471 was made effective in the summer of 2023, this changed the rules around offering a worker an employment release that includes a no-rehire provision. The idea behind the rule change is that employees may want to maintain their workers’ compensation reinstatement and reemployment rights even after the settlement of a workers’ compensation claim. (Remember that a worker may retain their reinstatement and reemployment rights for up to three years from the date of injury unless their rights are extinguished by other means.)

Accordingly, now, under ORS 659A.390, it is an unlawful employment practice for an employer to make an offer to negotiate a settlement agreement conditional upon a worker also entering into an agreement that includes a no-rehire provision unless, prior to making the offer, the worker has provided the employer with written confirmation of their willingness to enter into an agreement that includes a no-rehire provision and the settlement offer affirmatively states that entering into the settlement agreement is conditional upon the worker also entering into an agreement that includes a no-rehire provision.

What does this mean for employers? If you are in the process of settling a workers’ compensation claim with a worker, you can ask the worker whether they are also interested in entering into an employment release with or without a no-rehire provision, but you should clarify that settlement is not contingent on the no-rehire provision. If the worker confirms in writing that they are willing to enter into an agreement with a no-rehire provision, then you may make an offer that specifically states that entering into the settlement agreement is conditioned upon the worker agreeing to the no-rehire provision.

Because of the complexity of this new rule and the potential for penalties, employers should consult with an employment law attorney before offering an employment release in conjunction with a workers’ compensation settlement agreement.

Click to access a PDF of this E-Alert.

For questions, contact Becky Zuschlag at 503-276-2151 or bzuschlag@barran.com.

1/12/24: The U.S. Department of Labor Has Issued Its Final Rule, Changing the Independent Contractor Test (Again)

January 12, 2024

By Andrew Schpak

On January 10, 2024, the U.S. Department of Labor published its final rule regarding the classification of workers as employees or independent contractors under the Fair Labor Standards Act (FLSA). The final rule replaces the 2021 Independent Contractor Rule (ICR) and aims to reduce the risk that employees are misclassified as independent contractors while providing a consistent approach for businesses that engage with individuals who are in business for themselves.

Effective Date: The final rule is set to become effective on March 11, 2024, which allows businesses approximately two months to adapt to the revised standards.

Key Distinctions from the 2021 Rule: While sharing similarities with the 2021 ICR, the final rule introduces some notable distinctions. For example, unlike previous guidance, the final rule’s analysis can be applied to workers in any industry. The final rule also returns to a totality-of-the-circumstances economic reality test, which now considers six factors as opposed to the previous rule which only considered five. These six factors include:

(1) opportunity for profit or loss depending on managerial skill;

(2) investments by the worker and the potential employer;

(3) degree of permanence of the work relationship;

(4) nature and degree of control;

(5) extent to which the work performed is an integral part of the potential employer’s business; and

(6) skill and initiative.

The final rule gives examples as to how to apply each of these factors.  In contrast to the 2021 rule, no factor or set of factors is entitled to more weight than the others, with the focus instead being on the degree to which the worker is economically dependent on the company.

Interaction with Other Laws: It is important to note that the final rule only revises the Department’s interpretation under the FLSA and does not impact worker classification under other laws at the federal, state, or local levels. For example, the Internal Revenue Code and the National Labor Relations Act have different statutory language and judicial precedent governing the distinction between employees and independent contractors, and those laws are interpreted and enforced by different federal agencies. Similarly, this rule has no effect on those state wage-and-hour laws, including those which use an “ABC” test, such as California.

Practically speaking, it will be harder for a worker to qualify as an independent contractor under the new test as compared to under the old test.  As the effective date approaches, employers should consider auditing their independent contractor relationships to confirm that their documentation and how those relationships operate in practice minimize the risk of worker misclassification claims.

Click to access a PDF of this E-Alert.

For questions related to worker classification or the final rule, contact Andrew Schpak at 503-276-2156 or aschpak@barran.com.

1/10/24: 2024 Updates to Washington Wage Thresholds

January 10, 2024

By Nicole Elgin & Hannah LaChance

As employers prepare for a strong start to the New Year, it is important to note the following updates for Washington employee wages.

• Overtime Exemptions: For workers in Washington to be exempt from overtime laws, they must make at least $67,724.80 per year ($1,302.40 per week). This is part of a gradual implementation schedule. The salary thresholds for future years are projections based on the Consumer Price Index (CPI). Employers should note that in addition to the salary threshold requirements, to be properly exempt from overtime, many employees must meet additional criteria, including being paid on a salary basis and meeting one of the duties tests.

• Outside Employment Restrictions: Employers generally cannot restrict an employee from having outside employment or being self-employed unless the employee is paid at least $32.56 per hour.

• Noncompete Thresholds: Generally, an employee must earn $120,559.99 or more to be subject to a noncompetition agreement. The threshold is higher for independent contractors at $301,399.98.

• Dairy & Agricultural Workers: These workers are eligible for overtime for all hours worked over 40 per week. This was also a part of a gradual implementation plan, as the 2023 version of the policy required agricultural workers to work over 48 hours to be eligible. The overtime pay rate must be at least 1.5x the employee’s regular rate of pay.

• Minimum Wages for 2024:

  • Washington State: $16.28 per hour

  • Seattle: $17.25 to $19.97 per hour ($17.25 for small business employers (500 or fewer) if employees receive $2.72 per hour in medical benefits or tips)

  • SeaTac: $19.71 per hour (Hospitality and Transportation Industry)

  • Tukwila: Large employers (500+ employees): $20.29 per hour; Mid-size employers (15 to 500 employees): $18.29 per hour ($19.29 per hour effective 7/1/2024)

Click to access a PDF of this E-Alert.

For questions relating to Washington’s new wage thresholds, or for any other labor or employment matters, contact Nicole Elgin at 503-276-2109 or nelgin@barran.com.

12/20/23: DOL’s Nondisplacement Rule Creates Challenges for Federal Contractor Employers

December 20, 2023

By Nicole Elgin & Bruce Garrett

On December 14, 2023, the Department of Labor announced a final rule implementing Executive Order 14055 that places numerous nondisplacement employment requirements on federal contractors and subcontractors.

The core requirement of the rule, known as the nondisplacement clause, provides that a successor contractor must extend employment offers to covered service employees who were employed under a predecessor contract when the two contracts involve “the same or similar work.” The rule gives those employed on a predecessor contract the right of first refusal of employment on a successor contract under most circumstances.

The successor contractor is permitted to employ more or fewer employees than were employed under the predecessor contract, depending on what is most efficient for the performance of the contract. A successor contractor is required to make a written bona fide offer of employment to each service employee who worked during the last month of the predecessor contract. The DOL’s nondisplacement requirements apply regardless of the location of the successor contract, which represents a shift from prior nondisplacement requirements that only applied to same or similar services at the same location. The Final Rule is effective February 12, 2024, and will apply to solicitations issued on or after the effective date.

Notice Requirements

The Final Rule creates a detailed procedure for predecessors, contractors and subcontractors, including:

• At least 30 days prior to completion of the contract, the predecessor contractor must provide a list of service employees working under the contract to the Contracting Officer.

• The nondisplacement clause must be included in all covered contracts and subcontracts.

• Offers must be made in writing and the employee needs to be allowed 10 business days to consider the offer.

Exceptions

There are numerous exemptions to the nondisplacement clause, most notably, it does not apply:

• When there is reliable evidence that a particular employee’s past performance would give “just cause” to discharge the employee if the employee were employed by a contractor or subcontractor. However, the nondisplacement clause provides that there is a presumption that there is no just cause to discharge an employee.

• To contracts that are below the “simplified acquisition threshold” (currently, those under $250,000).

• To employees who are employed under a federal service contract and a non-federal service contract that is part of a single job.

• When a government agency determines that the nondisplacement rules are inefficient for effectuating a particular contract.

The technical nature of the nondisplacement clause creates administrative and recordkeeping compliance risk for contractors. Federal contractor employers who are entering successor contracts should consult an employment attorney to ensure they are not running afoul of the DOL’s new nondisplacement requirements.

Click to access a PDF of this E-Alert.

For questions about this new rule, or for any other labor and employment questions, contact Nicole Elgin at 503-276-2109 or nelgin@barran.com, or Bruce Garrett at 503-276-2175 or bgarrett@barran.com.

12/14/23: Employer Policy Checklist for the New Year

December 14, 2023

By Nicole Elgin

Employers should plan ahead for the many legal changes in the new year that may require updating policies. This E-Alert is an overview of some of the legislative changes employers with employees working in Oregon and Washington should prepare for come 2024:

Oregon:

Changes to OFLA Leave Year: Senate Bill 999 made a variety of changes to Paid Leave Oregon and the Oregon Family Leave Act. This includes the requirement that by July 1, 2024, covered employers must ensure their “one-year period” for the Oregon Family Leave Act (OFLA) is the 52-week period starting the Sunday before the first day of covered leave. This is to align with Paid Leave Oregon’s calculation of the one-year period, so many employers are implementing this change sooner than the deadline. Covered employers under the Family and Medical Leave Act (FMLA) may also want to align their leave year with this calculation. If so, the FMLA requires employers to give employees 60 days’ notice of that change to the FMLA leave year calculation.

Protected Leave for Bias Crime Victims: House Bill 3443 expands protections for victims of bias crimes. Victims of bias may take reasonable leave under ORS 659A.272. “Crime involving bias” means intimidation by display of a noose (a crime under ORS 163.191).

Protections for Employee Refusal to Perform Unsafe Work: Senate Bill 907 prohibits employers from discriminating or retaliating against an employee who, in good faith, refuses to perform a task that the employee reasonably believes would result in serious injury or impairment to the health and safety of the employee or other employees.

Respectful Workplace Policy: Senate Bill 851 requires the Bureau of Labor and Industries to create a model respectful workplace policy that employers may adopt and informational materials that identify the harms to employees and employers caused by workplace bullying.

Washington:

Anti-Discrimination for Cannabis Use: Senate Bill 5123 makes it unlawful for an employer to discriminate against a person in the initial hiring for employment if the discrimination is based on: the person’s use of cannabis off-the-job and away from the workplace, or an employer-required drug screening test that found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.

Sick Leave for Temporary Construction Workers: Senate Bill 5111 created paid sick leave payout requirements for certain commercial construction workers. Check out our prior E-Alert here for more information.

Updated Regulations for Paid Sick Leave: While preparing the paid sick leave rules for temporary construction workers, the Department of Labor & Industries (L&I) also revised other paid sick leave regulations that apply to all covered employers. For example, added to WAC 296-128-630, is that an employee’s right to take paid sick leave “means an employee has the choice about whether or not to use accrued, unused paid sick leave when a qualified purpose occurs and an employer may not require an employee to use accrued, unused paid sick leave if the employee does not choose to request to use paid sick leave.” There are also clarifications on notice and tracking that employers must provide to employees if they use a Paid Time Off program to meet the paid sick leave requirements. This includes notifying employees that the PTO program is intended to satisfy paid sick leave requirements. The employer’s PTO program that combines protected and unprotected leave can be more generous than the state paid sick leave requirements if: the compliant sick leave meets all requirements of Washington’s paid sick leave law, the compliant paid sick leave is tracked separately, and there is no requirement or encouragement for the employee to use their protected leave for more generous purposes before accessing additional PTO. The final updated rules are available here.

Access to PFMLI Claim Information: Senate Bill 5586 allows “interested parties” to access the following information from the state agency related to an employee’s Washington paid family or medical leave claim: type of leave being taken, requested duration of leave including approved dates of leave, and whether the employee was approved for and paid benefits in any given week. The information may only be used to administer internal employer leave or benefit practices under established employer policies.

As always, the laws are frequently changing at both the federal and state level when it comes to labor, employment, and benefits. Employers should check in with their counsel to ensure their handbooks and policies are compliant.

Click to access a PDF of this E-Alert.

For questions on labor and employment compliance changes in 2024, contact Nicole Elgin at nelgin@barran.com or (503) 276-2109.

12/7/23: Senators Introduce Legislation to Include College Athletes as “Employees” Protected by the National Labor Relations Act

December 7, 2023

By Nicole Elgin & Joshua Waugh

On Wednesday, December 6, 2023, U.S. Senators Bernie Sanders, Chris Murphy, and Elizabeth Warren reintroduced the College Athlete Right to Organize Act (CARO). The bill seeks to amend the National Labor Relations Act (NLRA) to specifically include college athletes in the definition of employees who have collective bargaining rights and labor protections under the NLRA. U.S. Representative Jamaal Bowman also introduced similar legislation in the U.S. House of Representatives. If passed, the amendment to the NLRA would give student athletes the statutory right to organize into unions and bargain for their wages, hours, and other terms and conditions of employment.

Senators Murphy of Connecticut and Sanders of Vermont have attempted these changes to national labor law before, in 2021 and in 2019. There is companion legislation in the House of Representatives and support from five different professional sports unions. The Major League Baseball Players Association, National Football League Players Association, National Basketball Players Association, National Hockey League Players Association, and Major League Soccer Players Association have all endorsed labeling student athletes as employees.

This comes at a time when the National Labor Relations Board General Counsel’s office is also prosecuting cases to address the issue of whether student athletes should be considered “employees” under the NLRA. For example, the GC’s office filed a complaint in May 2023 against the University of Southern California, the Pac-12 Conference, and the NCAA, arguing that their failure to use the term “employee” in reference to student athletes in various policies unlawfully discourages athletes from exercising federal labor law rights.

Businesses and organizations involved in college sports should stay updated on potential changes to the law as student athletes having labor law rights under the National Labor Relations Act could fundamentally alter college athletics.

Click to access a PDF of this E-Alert.

For questions and updates on changes to the NLRA, contact Nicole Elgin at nelgin@barran.com or 503-276-2109 or Joshua Waugh at jwaugh@barran.com or 503-276-2138.

P.S. Both authors of this E-Alert are proud Huskies. Go Dawgs!

11/16/23: NLRB General Counsel Issues Guidance on a Post-Cemex World of Union Recognition

November 16, 2023

By Nicole Elgin & Joshua Waugh

The National Labor Relations Board’s (NLRB) General Counsel issued guidance on November 2, 2023, regarding the new standards for employer conduct when a union makes a demand for recognition. The General Counsel’s Memorandum GC 24-01 sets out substantial policy changes that all employers, currently unionized or not, should pay attention to in the aftermath of the Board’s momentous decision in Cemex Construction Materials Pacific, LLC. The sweeping changes also modify how initial demands for recognition must be made as well as the employer obligations that follow.

Just a few takeaways from the memo include:

1. The initial procedure for a union demand for recognition includes informal, oral demands for recognition to anyone acting as an agent of the employer. These oral demands trigger National Labor Relations Act rules and procedure, even if delivered to a lower-level manager without any duties or knowledge in labor management. If the employer does not file an RM petition within two weeks of receiving the demand for recognition, the union can seek a bargaining order from the NLRB.

2. The Cemex Board has widened the scope of employer behavior that will be scrutinized when determining whether an election was invalidated, and therefore must be remedied by a forced bargaining order.

3. Employer unfair labor practices during the “critical period” for an election, beginning on the date of the demand and running through the election itself, can trigger a remedial bargaining order even if there was only one minor violation. This means that rather than the NLRB ordering a new election, the NLRB will order the employer to bargain with the union.

4. The threshold for filing an employer RM petition to oppose the validity of a bargaining unit has increased, and employers must now carry the burden of not only identifying why the proposed unit is flawed, but also specifying the correct unit with an explanation.

In the post-Cemex world, the NLRB is strictly scrutinizing employer behavior as it relates to elections and demands for recognition. Employers need to act promptly if any agent of the employer receives a demand for union recognition.

Click to access a PDF of this E-Alert.

Employers with questions about compliance with the NLRB’s updated standards should contact Nicole Elgin at 503-276-2109 or nelgin@barran.com, or Joshua Waugh at 503-276-2138 or jwaugh@barran.com.