Two years ago, the first medical marijuana dispensary opened in Pennsylvania.  Since that time, well over a hundred thousand Pennsylvania residents have become certified to use medical marijuana, additional conditions were added to the listed of qualifying serious health conditions and employers started to field questions from employees who wanted to use (or already were using) medical marijuana.  So, two years later, what do employer’s need to know?

  1. There’s a new protected classification in PA – an individual who is certified to use medical marijuana

As we’ve discussed previously, the PA Medical Marijuana Act provides that “no employer may discharge, threaten, refuse to hire or otherwise discriminate or retaliate against an employee regarding an employee’s compensation, terms, conditions, location or privileges solely on the basis of such employee’s status as an individual who is certified to use medical marijuana.”  Act 16, §2103(b)(1).  The impact of this anti-discrimination provision, however, was unknown until late in 2019.  In late November, as an early Christmas gift to employees, Judge Nealon of the Court of Common Pleas of Lackawanna County, held that a medical marijuana patient could proceed with her lawsuit alleging discriminatory discharge by her former employer.

According to the complaint filed in Palmiter v. Commonwealth Health Systems, the plaintiff was denied continued employment when she could not pass a drug screen due to her off-duty use of medical marijuana.  Plaintiff filed suit in the Court of Common Pleas and alleged, among other things, that her discharge violated the anti-discrimination provision contained in Act 16.  The employer sought dismissal of the lawsuit, arguing that Act 16 did not create a private right of action for discriminatory discharge.  Judge Nealon, following the trend of decisions in Delaware, Rhode Island and Connecticut, among others, disagreed with the defendant.  According to Judge Nealon, neither the Department of Health nor any other state agency was vested with the authority to enforce the anti-discrimination provision.  Accordingly, if an employee could not pursue a private right of action in state court, section 2103(b)(1) would be rendered meaningless.

Note, in allowing the suit to proceed, Judge Nealon has not ruled on the merits of plaintiff’s discrimination claim.  Further, we do not yet know what types or levels of damages may be recoverable by a plaintiff who can prevail on such a discrimination claim.  Nonetheless, the impact of Judge Nealon’s decision should not be understated . . . employees who are certified to use medical marijuana are a protected class in Pennsylvania.  Any such employee who believes he/she was discharged, threatened, not hired, etc., because of his/her certification to use medical marijuana will be able to file a lawsuit, straight into state court, alleging discrimination.  As a result, employers would be wise to review and consider how employees who use medical marijuana outside of work will be treated.

  1. The trend of court decisions is patient/employee friendly.

In ruling for the plaintiff in the Palmiter case, Judge Nealon followed the trend of judges in Delaware, Rhode Island, New Jersey, Connecticut, Massachusetts and Arizona, all of whom have ruled in favor of patients/employees certified under state law to use medical marijuana.  In Pennsylvania, in addition to Judge Nealon (who is a trial court judge), the appellate courts also appear poised and ready to protect the rights of medical marijuana users in the state.  In October, the ACLU filed an action on behalf of a class of Pennsylvania residents impacted by the Medical Marijuana Policy of the Lebanon County Court of Common Pleas.  The Court’s Policy prohibits the active use of medical marijuana by anyone under court supervision (i.e. those on probation or parole).  Though the suit was filed in the Commonwealth Court, on October 30th the Pennsylvania Supreme Court exercised its King’s Bench jurisdiction and voted to hear the case itself.  Notably, in doing so, the court temporarily enjoined enforcement of the Policy, a move seen as friendly to those seeking to legally use medical marijuana under Act 16.  The class of medical marijuana users opposing the Policy filed their brief with the Supreme Court last week and argued, among other things, that the Lebanon County Court’s Policy forces them to choose between seizures and jail and contradicts the critical purpose of Act 16 – to protect the rights of those who are certified to use medical marijuana from being arrested or prosecuted for using it.

While this case is not an employment related matter, PA employers should pay attention.  Should the Supreme Court permanently enjoin enforcement of the Policy, such a ruling will continue the trend of patient friendly decisions and could be predictive of how a court might rule in a dispute between an employer and an employee/medical marijuana user.

  1. The list of qualifying serious health conditions expanded, and, chances are, you have employees who are using, or soon will be using, medical marijuana.

In 2019, two new conditions were added to the list of serious health conditions for which PA residents can obtain medical marijuana.  The first – Tourette’s Syndrome – wasn’t much of a game changer.  The second, however – Anxiety – caused many employers to sit up and take notice.  According to the Anxiety and Depression Association of America, anxiety disorders are the most common mental illness in the U.S., affecting 18.1% of the adult population.  Accordingly, if you do not yet have an employee who has disclosed his/her use of medical marijuana, with the addition of anxiety to the list of qualifying conditions, it is likely only a matter of time.  Thus, for employers there is no time like the present to review your drug testing policy and to consider how your organization will handle medical marijuana use by employees.

A recent decision from Pennsylvania’s Commonwealth Court is likely to result in additional burdens on construction firms working with Pennsylvania school districts. In an already tight labor market, the court’s decision in United Union of Roofers, Waterproofers and Allied Workers, Local Union No. 37 v. North Allegheny School District et al could add to the difficulty of finding qualified workers to perform work on school projects.

The North Allegheny case was initiated by the United Union of Roofers, Waterproofers, and Allied Workers, which represents roofers and others, and operates a hiring hall by which it contracts out its members to roofing companies. In the summer of 2015, two public school districts in Western Pennsylvania—North Allegheny and Fox Chapel—solicited bids for roofing projects at various buildings throughout their respective districts.  The contracts furnished by the school districts required all construction workers to obtain criminal background checks in accordance with Section 111 of the School Code.

The School Code, at Section 111, indeed requires background checks for independent contractors and their employees, but only for those individuals that will have direct contact with children.  That provision seems to account for the fact that construction work at public schools is typically performed during the summer break (when no children are present), and also that construction or renovations often require many tasks where workers have no contact, nor any possibility of contact, with children.

North Allegheny and Fox Chapel’s construction contracts exceeded the background check requirements imposed by the School Code, and several workers were denied security clearances to work on the roofing projects.  The union filed suit to prevent the school districts from disqualifying its workers, arguing that because its members had no direct contact with children, they were exempt from the background checks because such checks are not required by the School Code.

The Commonwealth Court rejected the union’s argument.  The court acknowledged that the School Code exempts from background checks those workers having no direct contact with children; however, the court reasoned that nothing prohibits the school districts from requiring criminal background checks that exceed the mandates of the School Code.  In other words, the school districts may require background checks even for those workers having no direct contact with students.

The impact of this decision is likely to add to the difficulty contractors may already experience in adequately staffing projects. We will continue to monitor any further developments in this litigation, as well as any legislative fixes that may arise.

If you have any questions about how this decision might affect your business, feel free to contact any member of the McNees Labor and Employment or Construction and Procurement Law practice groups.

As a follow up to its Notice of Proposed Rulemaking issued in April 2019, the US Department of Labor (DOL) announced on January 12, 2020, the issuance of a Final Rule to revise and clarify the standard for joint employment status under the Fair Labor Standards Act (FLSA). The DOL explained that the Final Rule was necessary because the circuit courts were using a variety of tests to determine joint employer status which has resulted in inconsistent findings, confusion for employers and employees and increased litigation costs for employers.

The Final Rule adopts the four-factor balancing test from Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983) for determining joint employer status in situations where another individual benefits from an employee’s work. The DOL is of the opinion that the Bonnette test follows the “any person acting directly or indirectly in the interest of an employer in relation to an employee” language included in the FLSA’s definition of “employer.”

Under the four-factor test, where an employee performs work for an employer and another individual benefits from that work, the other individual will be considered a joint employer when found to be directly or indirectly controlling the employee. Direct or indirect control is established when the potential joint employer applies one or more of the following “control” factors, the ability to:

  • Hire or fire the employee;
  • Supervise and control the employee’s work schedule or conditions of employment to a substantial degree;
  • Determine the employee’s rate and method of payment; and
  • Maintain the employee’s employment records.

The Final Rule establishes that no single factor will be determinative in the joint employer analysis and the weight given to any single factor will depend on the specific factual scenario. Additionally, an employee’s economic dependence on a potential joint employer alone will not determine the existence of joint employer status. The Final Rule also acknowledges that other factors may come into play when determining a joint employer relationship but only if they establish that the potential joint employer exercises significant control over the employee. The DOL specifically discussed several factual scenarios that will not be controlling in the joint employer analysis, including the following:

  • The potential joint employer’s practice of sharing resources and/or benefits such as handbooks or other policy forms, allowing the employer to operate a business on its premises, offering an association health plan or retirement plan to the employer or participating in such plan with the employer, jointly participating in an apprenticeship program with the employer, or any other similar business practice.
  • Operating as a franchisor, entering into a brand and supply agreement, or using a similar business model;
  • The potential joint employer’s requirement that the employer comply with all legal, health and safety obligations;
  • The potential joint employer’s agreement with the employer regarding quality control standards to ensure the consistent quality of the work product, brand, and/or business reputation.

Finally, to assist employers in understanding the new analysis, the Final Rule provides a number of illustrative examples which apply the new analysis to various factual scenarios. The Final Rule is expected to be effective on March 6, 2020. We recommend that employers use this time to review any relationships with individuals who are not directly employed by them but from whom they receive beneficial services to determine if a potential joint employer relationship exists.

If you have any questions regarding the Final Rule from the US DOL on Joint Employer status, please contact any member of the McNees Labor and Employment Group.

In the past few months, we have seen significant changes to the laws governing employee benefits, from the new hardship withdrawal regulations for 401(k) participants, to the SECURE Act, to the new individual coverage health reimbursement arrangement (“HRA”).  Here is what you need to know for 2020:

Starting December 20, 2019:

  • Qualified Plan loans may no longer be distributed through credit cards or similar arrangements.
  • Employers sponsoring defined contribution plans have an optional safe harbor method they can use to satisfy the prudence requirement in their selection of an insurer as an in-plan annuity provider if they engage in an objective, thorough, and analytical search for the insurer and determine that the insurer is financially capable and the relative cost is reasonable.

Starting January 1, 2020:

  • Employers may offer individual coverage HRAs to certain classes of employees to whom they do not offer health insurance.
  • The age for required minimum distributions from a retirement plan has increased from 70 ½ to 72. Participants who turned 70 ½ in 2019 will fall under old rules and will receive their initial RMD prior to April 1, 2020.
  • The age for allowable in-service distributions from a pension or 457(b) plan has decreased from age 62 to 59 ½.
  • Participants may withdraw up to $5,000, penalty free, within a 1-year period from their retirement plan for any qualified birth or adoption.
  • Certain retirement plans may make trustee-to-trustee transfers to another employer-sponsored retirement plan or IRA of a lifetime income investment or distribution.
  • If an employer offered a “safe harbor plan”, the employer was required to provide a safe harbor notice to its participants prior to the beginning of the plan year informing the participant of his or her rights and obligations under the plan and meeting other content requirements. The safe harbor notice requirement is now eliminated.
  • The default contribution rate under an automatic enrollment safe harbor plan is increased from 10% to 15% for years after the participant’s first deemed election year. The cap on the default rate for the first deemed election year is 10%.
  • Under a safe harbor plan, the plan either provided for a matching contribution or provided for a nonelective contribution of at least 3% of an employee’s compensation. Now, the plan may decide which method to use up until the 30th day before the close of the plan year.  Any amendments after that time but before the close of the following plan year are allowed if a nonelective contribution of at least 4% of compensation is made.
  • Changes in nondiscrimination rules applicable to closed pension plans will allow existing participants to continue to accrue benefits.
  • Retirement plans adopted after the close of a tax year but before the due date of the employer’s return may be considered adopted as of the previous year.
  • Plans must be in operational compliance with the following hardship withdrawal regulations:
    • Plans are no longer allowed to suspend deferrals when a participant requests a hardship withdrawal.
    • Hardship withdrawals may be made for losses incurred on account of a FEMA-declared disaster, provided the participant lives or works in the designated area.
    • Participants may take a hardship withdrawal for the qualifying medical, educational, and funeral expenses of primary beneficiary.
    • With respect to a hardship withdrawal request, the plan administrator may rely upon the participant’s written representation that he/she has insufficient cash or liquid assets to satisfy the financial need.

The cap on start-up tax credits for establishing a retirement plan will increase to up to $5,000 (depending on certain factors) from $500. Small employers who add automatic enrollment to their plans also may be eligible for an additional $500 tax credit per year for up to three years.

And if you are planning for the future, starting January 1, 2021, employers must allow part-time employees who work at least 500 hours per year for 3 consecutive years to participate in 401(k) plans. These employees will be excluded from nondiscrimination and coverage testing and top-heavy rules.

For more information on these changes and other employee benefit law changes, contact a member of our Employee Benefits Group.

The flurry of activity from National Labor Relations Board in late 2019 was a fairly consistent drum beat of good news for employers.  In many cases, the Board restored decades of precedent that had been upended by the Board during the Obama administration.  Some would say the Board restored order and sanity in the world of labor relations.  That is certainly the case with the recent Board decision holding that employers can, in fact, require that employees maintain confidentiality during an internal investigation.

As you may recall, the Obama Board issued a highly controversial decision that essentially prohibited employers from requiring employees to maintain the secrecy of information related to an ongoing investigation.  Instead, in Banner Estrella Medical Center, the Obama Board held that whether an employer could enforce such a confidentiality obligation would be determined on a case by case basis, and an employer was required to justify any confidentiality requirement.   This approach was a problem for a whole host of reasons, including that it contradicted guidance from the Equal Employment Opportunity Commission, jeopardized the integrity of workplace investigations (including harassment investigations) and increased the risk of retaliation.  Employers struggled with the confounding contradictions presented by the decision.

Enter the Trump Board.  On December 16, 2019, the Board overturned Banner Estrella Medical Center, and its case-by-case analysis requirement.  In Apogee Retail, the Board held that confidentiality policies, like all workplace policies, should be evaluated in accordance with the Board’s policy rubric announced in Boeing Co.  The Board went on to provide bright line, clear guidance to employers by holding that “investigative confidentiality rules are lawful and fall within Boeing Category 1—types of rules that are lawful to maintain—where, by their terms, the rules apply for the duration of any investigation.”  In other words, a confidentiality obligation that lasts only during the term of the investigation is lawful.

The Board also held that where confidentiality rules extend beyond the duration of the investigation, the rules would be considered Category 2 rules under Boeing.  As such, a determination of their legality requires determination as to whether the employer “has one or more legitimate justifications for requiring confidentiality even after an investigation is over, and if so, whether those justifications outweigh the effect of requiring post-investigation confidentiality on employees’ exercise of their rights under Section 7 of the National Labor Relations Act.”  The Board remanded the Apogee Retail case for further proceedings on this issue.

We are hopeful that following remand, the employer is able to successfully assert that retaliation and other concerns are sufficient justifications to require post-investigation confidentiality.  We are also hopeful for more clear guidance from the Board on this issue.

In the meantime, employers now have some clarity regarding confidentiality requirements tied to workplace investigations.  To the extent that such requirements last only through the duration of the investigation, such policies/rules are lawful.  If there is a justification to require confidentiality to remain in place beyond the duration of the investigation, then the rule may also be lawful.  While there does remain some uncertainty with respect to rules that last beyond the term of an investigation, there is also now some much needed clarity for employers.

If you have any questions as you modify your policies in light of Apogee Retail, please contact any member of our Labor & Employment Group.

Employers of drivers who hold commercial driver’s licenses (CDL) have been subject to U.S. Department of Transportation drug and alcohol testing requirements for over twenty-five years. These regulations, enforced by the Federal Motor Carrier Safety Administration (FMCSA), require that any driver who fails (or refuses to take) a mandated drug or alcohol test must be taken off the road until he or she completes a return-to-work process that includes consulting with a substance abuse professional (SAP), following through with required education and/or treatment programs and passing a return-to-work test.

Under the regulations, employers are required to take certain precautions when hiring a CDL driver to ensure that the candidate is fit to drive, including investigation of the driver’s testing compliance history with each of his or her DOT-regulated employers during the preceding three years. One problem with this requirement is that drivers seeking new employment can easily omit from their job application any prior employment that involved a testing violation. In addition, some prior employers may fail to keep good records of prior violations or may be reluctant to share driver violations in the reference process – and thereby fail to give subsequent employers a clear picture of a driver’s compliance history.

Effective January 1, 2020, these gaps in the FMCSA’s enforcement scheme will be addressed via the “Commercial Driver’s License Drug and Alcohol Clearinghouse.” FAQs regarding the Clearinghouse are available on the FMCSA website. Some key requirements are summarized below.

Reporting Requirements. The new Clearinghouse regulations supplement existing DOT/FMCSA testing requirements; they do not alter them. Effective January 6, 2020, covered employers must track and promptly report certain driver information directly to the Clearinghouse, including positive confirmation tests, refusals to test, actual knowledge of driver drug or alcohol use before duty, while on duty or soon after an accident in violation of existing regulations, negative return-to-duty tests and confirmation that the driver completed all follow-up tests directed by the SAP. These reports are accepted by the Clearinghouse even if the driver has not yet registered; the reported data is linked to the driver’s license information and not Clearinghouse registration. Information relating to violations that occurred prior to January 6, 2020 need not be reported; however, a test specimen that is taken before the effective date would need to be reported if a Medical Review Officer verifies the positive test result after the regulations take effect. Medical review officers (MROs), SAPs and third-party administrators have similar reporting requirements to ensure that a driver’s compliance profile is complete.

Query Requirements. Upon hiring a new CDL driver, a covered employer must conduct a “full query” of the Clearinghouse with respect to the driver’s compliance history. A full query allows access to detailed information regarding a driver’s prior positive test results and return-to-work process compliance. A hiring employer must confirm that all reported incidents were appropriately resolved before the driver may be permitted to perform safety-sensitive functions. In addition, employers are required to conduct “limited queries” for each covered driver they employ on an annual basis, with the first occurring within twelve months of January 6, 2020. The Clearinghouse will respond to limited queries with a general response as to whether it possesses any information regarding a driver’s prior testing violations – the employer will then need to follow through with a full query for those drivers with records of concern.

Drivers must consent to an employer conducting the required queries and may not be permitted to perform safety-sensitive functions if they refuse to do so. Consent for a full query must be given by the driver electronically via the Clearinghouse. On the other hand, driver consent for limited queries may be given in writing and a single consent form may be used to cover every annual limited query that occurs for the duration of the driver’s employment. FMCSA has published a sample written consent form which can be found here. Employers are not required to use the template form and may wish to modify it.

Notably, during the hiring process, employers must continue to investigate a CDL driver’s testing compliance history by contacting each of his or her DOT-regulated employers during the preceding three years – however, this requirement will cease once the Clearinghouse is three years old (on January 6, 2023).

Registration Requirements. Drivers are not required to immediately register for the Clearinghouse but must do so in order to provide consent for “full queries” from employers and in order to review the information contained in the Clearinghouse relating to them. For this reason, drivers are well-advised to register now. Employers must register in order to report information and conduct the required queries. Employers may purchase “query plans” on the FMCSA website. Employers and drivers can register via the FMCSA website.

The FMCSA Commercial Driver’s License Drug and Alcohol Clearinghouse should eventually (i.e. by 2023) simplify the process for clearing newly hired CDL drivers to drive. The regulations that take effect on January 6, 2020 contain additional requirements that are beyond the scope of this brief summary. If you have any questions regarding your responsibilities under the new FMCSA Clearinghouse regulations, please do not hesitate to contact any member of our Labor and Employment Law Practice Group.

If you follow our blog, you know that the National Labor Relations Board’s election rules have been a hot topic over the past several years.  The Board’s election rules are critical, because time can often make a difference in whether a union election is won or lost.

In 2011, the Board started the process to change the rules applicable to union elections, known as representation cases.  In essence, the proposed rule changes would speed up the election process.  These changes were almost universally viewed as being detrimental to employers and favorable to unions.  The time between the date an election petition is filed (in the vast majority of cases it is the union filing the petition) and the date of the election is critical for employers, because it is often the only time the employer will have to express its views regarding unionization.  The new rules, known as the ambush election or quickie election rules, were finalized in 2014 and became effective in April of 2015.

We have dealt with several representation cases under the quickie election rules, and we can say without a doubt that things move too fast, leaving employers at an unfair disadvantage.

Enter the Trump Board.  In December of 2017, the Board issued a Request for Information, seeking public input on the quickie election rules, and the Board’s rules in representation cases generally.  Although we did not hear much about the rules through 2018 and most of 2019, most employers were hopeful that the Board would repeal or roll back the Quickie Election Rules.  On December 18, 2019, the Board published a Notice of Final Rulemaking in the federal registry, which does exactly that.  The notice announced significant changes to the representation case procedures, which will take effect in 120 days.

For example, the pre-election conference, previously required to be scheduled within eight days of the service of the petition, will now be scheduled 14 days from service.  In addition, the deadline for posting the Notice of the Petition was extended from two business days to five business days.  Employers will also have eight business days to file a position statement in response to a union petition.  In addition, the new rules extend the time to provide the required voter eligibility list, or Excelsior list, from two days after the direction of election to five business days.

The new rules will also change the process for certain challenges, including challenges to eligible voters.  Under the quickie rules, these challenges were deferred until after the election.  Now, the parties can litigate these issues before the election or agree to defer the matter until after the election.  In addition, if there is a pre-election hearing, the parties will be permitted to file post-hearing briefs with the regional director within five business days of the hearing.  Under the quickie rules, the parties could only file briefs with special permission of the regional director.

In our opinion, all of these changes will benefit employers in the vast majority of cases.  The changes should also make the process more efficient, because employers will have more time to evaluate and attempt to resolve issues before the election.  Time will tell if there is an increase in union election petitions in the short term, seeking to take advantage of the quickie election rules.

If you have questions, concerns, or would like further discuss these upcoming changes to the Representation Election Rules, please contact a member of the McNees Labor and Employment Group.

If your business operates in California, you need to be aware of AB 51, a law that will take effect January 1, 2020.  AB 51 precludes employers from requiring any applicant or employee, as a condition of employment, continued employment, or the receipt of any employment-related benefit, “to waive any right, forum, or procedure” for a violation of the Fair Employment and Housing Act (FEHA) or the Labor Code.

Section 432.6 of the law goes further to provide that requiring employees to opt out of an arbitration agreement to avoid being bound, or to take any affirmative action to preserve their rights, is “deemed a condition of employment.”  Accordingly, even arbitration agreements with opt-out provisions are unlawful.  Employers who violate AB 51 could be subject to criminal liability.

However, a California Federal Court is now considering whether the Federal Arbitration Act (hereinafter “FAA”) preempts state laws disfavoring the formation or enforcement of arbitration agreements.  On December 6, 2019, the U.S. Chamber of Commerce challenged AB 51 in the Eastern District Court of California.  Chamber of Commerce of the United States v. Becerra, Case No. 2:19-cv-2456 KJM DB.

The Chamber of Commerce is seeking declaratory and injunctive relief to preliminarily and permanently enjoin the state of California from enforcing AB 51 as applied to arbitration agreements that are covered by the FAA.  The Chamber asserts that AB 51 violates the Supremacy Clause of the United States Constitution because it conflicts with the FAA, a federal law that treats arbitration agreements as “valid, irrevocable, and enforceable.”  9 USCS § 2.  The suit seeks not only a declaration that the FAA preempts AB 51, but it also seeks a declaration that the FAA protects both enforcement and formation of arbitration agreements.  This argument is consistent with prior case law.   Kindred Nursing Ctrs. Ltd. P’ship v. Clark, 137 S. Ct. 1421, 1428 (2017).

Until the federal court renders a decision, employers operating in California should keep an eye out for any developments regarding AB 51.  Employers may wish to suspend the implementation of new arbitration agreements until the FAA’s statutory interpretation and preemption issues are authoritatively resolved.

Stay tuned for developments on this law.  If you have any questions regarding AB 51, please do not hesitate to contact McNees Wallace & Nurick’s Labor and Employment Group.

In 2014, the NLRB held in Purple Communications that employers must allow their employees  to use company email systems to engage in union activities and other protected conduct under the National Labor Relations Act. Last year, we reported that the NLRB was set to re-examine the controversial Purple Communications decision.  The Board did just that in issuing its December 16 decision in Caesars Entertainment d/b/a/ Rio All-Suites Hotel and Casino.

In Caesars, a Las Vegas hotel implemented a policy barring its employees from using the hotel’s email system to send any non-business information to one another.  Employees filed an unfair labor practice charge alleging that the rule unlawfully restricted their rights under Section 7 of the NLRA pursuant to the Board’s Purple Communications rule.   An administrative law judge analyzed the policy in accordance with Purple Communications and agreed with the hotel’s employees.  The judge held that the hotel’s rule unlawfully interfered with employees’ rights to engage in union and other activity protected by Section 7 of the Act.

The employer appealed to the NLRB.  In turn, the Board invited the parties and other interested stakeholders to submit briefs.  Over one year later, the Board overturned Purple Communications and ruled that the hotel’s policy is lawful.  The Board determined that in most workplaces, sufficient means of communication exist such that employees have no statutory right to engage in Section 7 activity through their employers’ email systems.  In other words, employers may prohibit employees from using company-owned email systems to send non-business communications, even during non-working time.

Employers should note that the general rule in Caesars is not absolute.  The Board recognized that in rare instances where the employer’s email system is the only reasonable means of employee communication with one another during non-working time, employees must be permitted to engage in Section 7 activity through the email system.  Moreover, consistent with prior Board case law, employers must still refrain from implementing policies that specifically prohibit Section 7 activity, or which single out protected activity for restriction.

If you changed your policy following Purple Communications, you may consider changing it back.  All things considered, the Board’s Caesars decision is another big win for employers under the Trump-era NLRB.  If you have any questions about how the ruling impacts your company’s right to control its electronic resources, feel free to contact any member of our Labor and Employment Group.

Major developments in the area of wage and hour law are happening right now in Harrisburg and happening quickly.  These developments may have a significant impact on Pennsylvania employers in 2020 and beyond.

On November 20, the Pennsylvania Senate passed Senate Bill 79 by a vote of 42-7.  This bill would make substantial amendments to the Pennsylvania Minimum Wage Act (PMWA).

Currently, the minimum wage rate under both the federal Fair Labor Standards Act (FLSA) and the PMWA is $7.25 per hour.  Under the Senate bill, the hourly minimum wage rate under the PMWA would increase as follows:

  • $8.00 effective July 1, 2020
  • $8.50 effective January 1, 2021
  • $9.00 effective July 1, 2021
  • $9.50 effective January 1, 2022

In exchange for these increases to the minimum wage rate, Pennsylvania employers and their allies in the Senate were able to secure some welcome compliance simplification and relief.  Specifically, the Senate bill would:

  • Amend the PMWA to state that its minimum wage and overtime requirements must be applied in the same manner as the FLSA, except when a higher standard is specified under the PMWA or its regulations. This change would be significant for employers, as it would eliminate much ambiguity and the differences between the PMWA and FLSA on issues like overtime exemption requirements.  In other words, Pennsylvania employers would have one set of requirements to follow in this area, rather than two often vague and conflicting sets of rules.  This amendment would make all overtime exemptions currently available under the FLSA now also apply to the PMWA.  Additionally, it would provide clear guidance that, in areas where the PMWA and its regulations are silent, federal law would apply and provide the necessary guidance for compliance.  This change would be particularly timely, as the Pennsylvania Supreme Court issued a decision (coincidentally) on November 20 holding that the fluctuating work week method of paying salaried non-exempt employees, which is expressly permitted by the FLSA’s regulations, violates the PMWA, because the PMWA’s regulation do not mention or address the fluctuating work week method.  Conflicts and uncertainty like this due to silence in the PMWA and its regulations would go away if the Senate bill becomes law.
  • Preclude the Pennsylvania Department of Labor and Industry (DLI) from making any changes to the minimum salary requirements for the PMWA’s white-collar overtime exemptions until January 1, 2023. As noted previously in this blog, DLI submitted final regulations on October 17, 2019, that would have dramatically increased the minimum salary requirements for the PMWA’s white-collar exemptions well in excess of the minimum salary requirements for the same exemptions under the FLSA.

As for those new PMWA regulations, Pennsylvania’s Independent Regulatory Review Commission (IRRC) was set to consider and rule upon them at a public meeting on November 21.  On the morning of November 21, the Wolf Administration formally withdrew the new regulations as part of the negotiations that led to bipartisan support for and passage of the Senate bill.  With its withdrawal, the Wolf Administration made clear that, if the Senate bill is not passed by the Pennsylvania House of Representatives, it intended to resubmit the regulations for final approval.

That is a lot of legislative and regulatory action in a mere 24 hours!

The Senate bill is a compromise measure, with Governor Wolf able to secure a long-sought minimum wage increase and the Republican-controlled Senate able to block the PMWA minimum salary regulations from taking effect and obtain a long-desired alignment of the requirements of the FLSA and PMWA.

The bill now moves to the Pennsylvania House for consideration.  Like the Senate, the House is Republican-controlled.  Whether the bill will be passed by the House in the same or similar form remains to be seen.  However, remarkable progress has been made in a very short time.

Stay tuned.