As we reflect on 2023, we are reminded that it was a hectic year in the labor and employment world with significant movement on employment issues in legislation, in the courts, and from government agencies.
Employers may benefit from refreshing themselves on these ten “need-to-know” legal developments from 2023 that will continue to impact the workplace in 2024 and beyond. In no particular order:
1. PUMP Act
Technically enacted in the final hours of 2022, the PUMP Act expanded on prior employee protections for the expression of breastmilk during work hours. It clarified the scope and nature of break times guaranteed to covered employees and expanded coverage to additional professions.
Access this link for further information.
2. Pregnant Workers Fairness Act
Taking effect in June 2023, the Pregnant Workers Fairness Act (“PWFA”) requires covered employers to provide employees with reasonable accommodations for pregnancy, childbirth, and related medical conditions unless such accommodations would result in an undue hardship on the employer. Similar to other workplace legislation, the PWFA prohibits discrimination and retaliation against an employee or applicant due to their need for such an accommodation.
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3. McLaren Macomb and the NLRB’s Guidance thereon
In the first of several significant updates from the National Labor Relations Board (“NLRB”), the McLaren Macomb decision and the NLRB’s associated guidance took aim at terms commonly included in employer severance agreements. Under McLaren Macomb and the related guidance, severance agreements presented to employees covered by the NLRA may not include broad confidentiality or non-disparagement provisions. Employers who have not already revisited their severance agreements in light of McLaren Macomb may be deploying agreements with unenforceable or unlawful terms.
Access this link for further information.
4. The Supreme Court’s Civil Rights Cases
Over the summer, the Supreme Court released three opinions that will have significant impacts on the workplace and elsewhere.
- Students for Fair Admissions v. President & Fellow of Harvard College (“SFFA”) found that certain universities’ affirmative action programs for student admissions were unconstitutional. The SFFA rationale has since been used as a basis for litigation targeting diversity and inclusion programs in private workplaces.
- In Groff v. Dejoy, the Court clarified that an employer must provide an employee with an accommodation for a sincerely held religious belief unless the employer can show that granting an accommodation would result in substantial increased costs in relation to the employer’s business.
- Finally, in 303 Creative LLC v. Elenis, the Court found that the First Amendment superseded a state law prohibiting private businesses from denying services to a customer on the basis of sexual orientation.
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5. Cemex Construction
Next on the list is another NLRB opinion, Cemex Construction Materials Pacific, LLC. Cemex fundamentally altered an employer’s obligations when a union demands recognition as the representative of a bargaining unit. For the fifty years prior to Cemex, employers could reject authorization cards as evidence of majority representation of a bargaining unit, thus requiring the union to file an election petition. Under Cemex, however, an employer has no such flexibility. Instead, an employer must either recognize the union as the bargaining unit’s representative, or file its own petition to determine whether the union has the requisite support to be the bargaining unit’s representative.
Access this link for further information.
6. Proposed Rule Regarding Overtime Exemptions
In August, the U.S. Department of Labor (“DOL”) issued a proposed rule aiming to update the “white collar” exemptions under the Fair Labor Standards Act (“FLSA”). The proposed rule would significantly increase the minimum salary threshold for employees to be classified as “exempt” under the administrative, executive, and professional exemptions. It would similarly increase the minimum annual compensation threshold for employees falling under the “highly compensated employee” exemption. The DOL estimates that if the rule takes effect as proposed, 3.6 million additional employees will be eligible for overtime. The comment period on the proposed rule closed in November 2023.
Access this link for further information.
7. Challenges to post-employment restrictive covenants
In the past year, several administrative agencies have turned their attention towards post-employment restrictive covenants like non-competes. In January, the Federal Trade Commission (“FTC”) issued a proposed rule that would prohibit non-competes on the basis that those terms suppress competition for workers, thus driving down wages. In May, another federal government agency, the NLRB, joined the fray with a General Counsel memo urging the NLRB to adopt the position that non-compete agreements violate the NLRA by discouraging employees from exercising rights protected by NLRA Section 7. We also saw an uptick in state legislation that limits or outright prohibits the use of non-competition clauses in the employment context. With these developments, 2024 is shaping up to be a critical year for restrictive covenants.
Access this link for further information regarding the FTC’s proposed rule.
Access this link for further information regarding the NLRB’s memo.
8. EEOC proposes guidance on workplace harassment
In September, the EEOC proposed updated guidance on workplace harassment. The guidance includes updated standards to reflect changes to the law and workplaces over the last several years. It also sets out minimum requirements for an employer’s anti-harassment policy and practices. The guidance is likely to be finalized in early 2024 and employers should revisit policies and practices to remain compliant with updated standards.
Access this link for further information.
9. New form I-9s
In August, the U.S. Citizenship and Immigration Services (“USCIS”) introduced a new Form I-9 to be used in the onboarding of new employees. Employers use the Form I-9 to verify a potential employee’s identity and employment authorization. USCIS’s new Form I-9 is in a different format from prior versions, with the goal of simplifying the Form I-9 process. After November 1, 2023, all employers should now be using the current Form I-9.
Access this link for further information.
10. NLRB’s new joint-employer rule
In October, the NLRB issued its final rule significantly expanding the definition of a joint employer under the NLRA. Under prior NLRB rules, an entity was a joint employer only if the entity possessed and exercised substantial direct and immediate control over one or more essential terms and conditions of employment. Under the new rule, however, an entity may be deemed a joint employer simply by having the authority to “share or codetermine” one or more essential terms and conditions of employment. In practice, this means that employers who rely on contract labor may still be found to be joint employers, even without exercising any control or supervision over the laborers. The updated rule is likely to have significant impact on collective bargaining as we head into 2024.
Access this link for further information.
These snapshots highlight that the workplace is heading into 2024 from a substantially different position than the one in which it started. If you have questions about these updates or how to best prepare your workplace for 2024, please contact a member of the Brooks Pierce Labor and Employment Team for assistance.