“Vaccinating the Unvaccinated” is central to the Biden Administration’s “Path Out of the Pandemic.”  Federal agency workers and military personnel are required to be vaccinated; health care facilities that participate in Medicare or Medicaid must require vaccination for health care workers; certain federal government contractors must ensure that covered employees are vaccinated (see our prior blog post on the Safer Federal Workforce Task Force Guidance under EO 14042); and OSHA has been directed to issue an Emergency Temporary Standard (“ETS”)  that will require all employers with more than 100 employees to require vaccination or weekly COVID-19 testing for all employees.  The ETS is expected to be issued soon without formal notice and comment rulemaking and will be effective for only six months.

Many large private employers and healthcare systems are already moving forward with mandatory vaccination programs ahead of the ETS and have set deadlines for employees to be fully vaccinated.  Although there have been some legal challenges to private employer vaccine mandates, they have held up to judicial review, provided that the employer establishes a process for considering requests for accommodation due to a disability or sincerely-held religious belief.

The ETS is expected to be issued in the coming days or weeks. Yet, many of the important details remain unknown. Employers are left with many unanswered questions for the time-being, such as:  How will the 100-employee coverage threshold be calculated?  How long will employers have to comply?  What proof of vaccination will be required?  Who is required to pay for weekly testing of unvaccinated workers?  How do employers confirm weekly negative test results for unvaccinated workers?

These and other questions will remain unanswered until the ETS is issued.  In the meantime, we can look to the Safer Federal Workforce Task Force Guidance issued under EO 14042 (Guidance for Federal Contractors and Subcontractors (saferfederalworkforce.gov) for insight.  Although EO 14042 only applies to certain federal government contractors, the Task Force guidance may preview OSHA’s approach to some of the key issues in the ETS.

  1. The ETS will likely go into effect immediately but may give employers a window of time to comply after the new standard is published. For example, under EO 14042 covered federal contractors have until December 8, 2021, to ensure that covered employees are fully vaccinated.
  2. The ETS is certain to include exceptions “as required by law,” which appears to mean that an exception could be provided only if required by the ADA or Title VII, such as for a medical or religious reasons. Since the ETS will allow for a weekly testing option for unvaccinated workers, the circumstances in which an exception from testing will be required as an accommodation appear to be limited.
  3. As to what type of proof of vaccination will be acceptable, the Task Force Guidance requires that covered federal contractors require that their employees “show or provide” proof of vaccination, such as a vaccine card or immunization record. If OHSA takes the same approach, employers who previously reviewed vaccine cards and made records of which employees were vaccinated should be permitted to rely upon those records, even if copies of the vaccine cards were not retained. However, an attestation of vaccination by the covered employee will not be an acceptable substitute if the Federal Task Force Guidance is any indication of the approach to be taken by OSHA.
  4. Based upon the Task Force Guidance, the ETS is unlikely to include an exception from the vaccination or weekly testing requirement for employees who recently had a confirmed case of COVID-19.
  5. With respect to other mitigation measures, the ETS could also require that employers follow the CDC guidelines for masking for unvaccinated workers and vaccinated workers in areas of substantial or high community transmission. The CDC thresholds for high or substantial community transmission are conservative – currently 90% of US counties are classified as “high” community spread by the CDC and another 6% are classified as “substantial.”  It remains to be seen whether OSHA will go beyond the vaccine or testing requirements and issue mask requirements, as the Task Force did for covered federal contractors under EO 14042.

There will certainly be legal challenges to OSHA’s authority to issue the ETS. The legal challenges will likely focus upon whether the specific approach taken in the ETS is necessary and effective to reduce the dangers of COVID-19.  Unless a federal appeals court promptly issues an injunction, the outcome of the legal challenges may not be resolved until after the six-month effective period of the ETS has elapsed.

Employers with more than 100 employees can begin to prepare for the ETS by continuing to encourage vaccination of on-site workers and by having employees “show or provide” proof of vaccination. Many employers are communicating with employees about the forthcoming ETS and urging unvaccinated employees to get vaccinated to protect themselves and their co-workers.  Some employers have gone a step further and have issued a mandatory vaccination policy.   Either way, employers should develop processes and guidelines for handling accommodation requests and obtaining the information necessary to determine whether an accommodation is necessary.

The McNees Labor & Employment Group will present a webinar on the OSHA ETS promptly after it is issued. In the meantime, please reach out to the McNees Labor and Employment Group with questions about Executive Order 14042, the Federal Task Force Guidance, or the OSHA ETS.

A recently published FAQ prepared by the Departments of Labor, Health and Human Services and Treasury answers frequently asked questions regarding vaccine premium differentials and HIPAA nondiscrimination rules, as well as the cost shares for vaccine boosters.

Vaccine Premium Differentials

ERISA and other regulations prohibit plans “from discriminating against participants, beneficiaries, and enrollees in eligibility, premiums, or contributions based on a health factor.”  Health plans are allowed an exception to this prohibition and may provide discounts, subject to limitations, to participants who adhere to the requirements of wellness programs.  The maximum reward (or penalty) under a wellness program that is part of a group health plan is 30 percent of the cost of coverage (or 50 percent for wellness programs designed to prevent or reduce tobacco use).

The FAQ outlines that health plans may offer participants a premium discount for receiving, or surcharge for not receiving, a COVID-19 vaccination, if the discount complies with the five criteria of wellness program regulations.  Those five criteria are:

  1. The wellness program must give the opportunity to qualify for the reward at least once per year.
  2. The reward, together with the reward for other health-contingent wellness programs, must not exceed 30 percent, or 50 percent for wellness programs designed to prevent or reduce tobacco use, of the total cost of employee-only coverage under the plan.
  3. The program must be reasonably designed to promote health or prevent disease.
  4. The full reward must be available to all similarly situated individuals, which includes allowing a reasonable alternative standard, or waiver of the otherwise applicable standard, for obtaining the reward for any individual for whom it is unreasonably difficult due to a medical condition or medically inadvisable to satisfy the otherwise applicable standard, for the relevant period.
  5. The plan must disclose in all plan materials describing the terms of the program, the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of a waiver), including contact information for obtaining a reasonable alternative standard and a statement that recommendations of an individual’s personal physician will be accommodated.

The FAQ also clarifies that health plans may not condition eligibility under a health plan on whether an individual obtains a COVID-19 vaccination.  In addition, the FAQ clarifies that wellness incentive reductions are disregarded in determining affordability under the ACA, but wellness incentive increases are not, which means that employers should ensure that the premium differential does not make their coverage unaffordable under the ACA.

No Cost Sharing for Vaccines and Additional Doses

The CARES Act requires health plans to cover, without cost-sharing requirements, any qualifying coronavirus preventative service.  “Qualifying coronavirus preventative service” means an “item, service, or immunization that is intended to prevent or mitigate coronavirus disease 2019” and includes items with an “A” or “B” rating in the current recommendation of the United States Preventive Services Task Force or an immunization recommended by the Advisory Committee on Immunization Practices of the CDC.

The FAQ clarifies that health plans must immediately cover vaccines and any additional doses, without cost sharing, once a vaccine becomes authorized, dating back to December 12, 2020.

The entire FAQ can be found here.

As always, please reach out to any member of the McNees Labor & Employment Group with any questions.

The General Counsel of the National Labor Relations Board (NLRB) issued a Guidance Memorandum last week establishing her position that certain players at academic institutions are employees as defined by National Labor Relations Act (NLRA).  If collegiate athletes are protected as “employees” under the NLRA, then these athletes would have rights to organize and join labor unions, the schools would be required to bargain with athletes’ unions, and the athletes would be protected from retaliation when they engage in concerted activities to improve the terms and conditions of employment.

The Memorandum has no binding legal effect, but it lays out the General Counsel’s view that certain players at academic institutions are employees as defined by the statutory language of the NLRA and by policies the NLRB has adopted over time.  The NLRA defines employee broadly, subject only to a few, specific exceptions, none of which include university employees, football players, or students.  In addition, the Memorandum concludes that principles of agency law also support the proposition that certain players are employees if they 1) perform services for the school or the NCAA, 2) they are subject to the school’s or NCAA’s control (in the form of minimum GPA requirements, scholarship eligibility, etc.), and 3) they are compensated for their services by their receipt of scholarships for tuition, room, board, books, and stipends for additional expenses like travel and childcare.

In short, according to the General Counsel, scholarship athletes clearly come within the NLRA’s broad statutory definition of employee and meet the common-law test.  Therefore, the Memo states, these players should be protected when they act in concert regarding the terms and conditions of their employment.

In addition to these protections, the Memo notes that misclassifying these players as mere “student-athletes” and leading them to believe that they are not entitled to NLRA protections, has a chilling effect on the exercise of rights under the NLRA.

It is unclear what impact the General Counsel’s view will ultimately have on the legal relationship between scholarship athletes and the institutions for whom they play, but this is an area that is sure to get more attention.  Institutions should be cautious when addressing potential concerted activities by scholarship athletes or other players who meet the General Counsel’s definition of employee.  Stay tuned as we continue to monitor these developments.  As always, please reach out to any member of the McNees Labor & Employment Group with any questions.

On Friday, September 24, 2021, the Safer Federal Workforce Task Force issued new guidance on COVID-19 vaccination requirements and other workplace safety protocols for covered federal government contractors, as required under Executive Order 14042. Beginning on October 15, 2021, all agencies will be required to add a clause to all covered Federal procurement solicitations and contracts specifying that the contractor or subcontractor will comply with the vaccine requirement and COVID-19 workplace safety protocols. This requirement will not apply retroactively to existing contracts, but businesses should be aware that any future modifications to “covered contracts” after October 15, 2021, must contain the provision requiring compliance.

What is a “covered contract?”

The executive order defined covered contracts to include any new contract; new contract-like instrument; new solicitation for a contract or contract-like instrument; extension or renewal of an existing contract or contract-like instrument; and exercise of an option to an existing contract or contract-like instrument, if:

  • it is for services, construction, or a leasehold interest in real property;
  • it is for services covered by the Service Contract Act, 41 U.S.C. 6701, et seq.;
  • it is for concessions, including any concessions contract excluded by the Department of Labor regulations at 29 CFR 4.133(b); or
  • it is entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

The Vaccination Requirement

Pursuant to the new guidance, covered contractors must ensure that all covered employees are fully vaccinated no later than December 8, 2021, unless the employee is legally entitled to an accommodation.  For newly awarded covered contracts or contracts with exercised options, renewals or extensions after December 8, 2021, all covered contractor employees must be fully vaccinated by the first day of the period of performance when the clause has been incorporated into the covered contract. It is the prime contractor’s responsibility to ensure that the required clause is incorporated into any covered first-tier subcontracts entered into or modified after October 15, 2021. Subcontractors are then responsible for ensuring that the required clause is incorporated and flows down to the next lower-tier subcontractor.

Covered employees are those “working on or in connection with a covered contract or working at a covered contractor workplace.”  Accordingly, all employees who work at a location where any employee working on or in connection with a covered contract is likely to be present during the performance of the contract are subject to the vaccine mandate.  According to the Guidance: “Employees who perform duties necessary to the performance of the covered contract, but who are not directly engaged in performing the specific work called for by the covered contract, such as human resources, billing, and legal review, perform work in connection with a Federal Government contract.” This includes covered employees who are working remotely from their residence.  The guidance also clarifies that even covered employees with recent confirmed cases of COVID-19 must be vaccinated.

In order to ensure that its employees are fully vaccinated, covered contractors must require their covered employees to show or provide documentation to prove vaccination status. A copy of the record of immunization from a health care provider or pharmacy, a copy of the COVID-19 Vaccination Record Card, or a copy of medical records documenting the vaccination with the name, date of administration, and the name of the provider are all acceptable documentation of proof of vaccination status. Also, it is acceptable for an employer to view or receive the documentation in digital form, including, for example, a digital photograph, scanned image, or PDF. Employers that previously reviewed their employees’ vaccination cards and made a record of the provision of documentation – even where copies were not retained – are likely in compliance with this requirement. However, an attestation of vaccination by the covered employee is not an acceptable substitute.

Other Required COVID-19 Safety Protocols for Covered Contractor Workplaces

In addition to ensuring covered employees are fully vaccinated, covered contractors must continue to follow CDC guidance for masking and social distancing for both covered employees and site visitors in covered contractor workplaces. All individuals, regardless of vaccination status, must wear a mask in indoor settings in areas of high or substantial community transmission. Fully vaccinated people need not wear a mask in areas of low or moderate community transmission.  Community transmission levels are determined based upon the CDC information available at https://covid.cdc.gov/covid-data-tracker/#county-view.  To the extent practicable, individuals who are not fully vaccinated should maintain a distance of at least six feet from others at all times. However, fully vaccinated individuals do not need to physically distance regardless of the level of transmission in the area.

Covered contractors must require covered employees and site visitors who are required to wear a mask to:

  • Wear appropriate masks consistently and correctly (over mouth and nose).
  • Wear appropriate masks in common areas and shared workspaces (including open floorplan office space, cubicle embankments, and conference rooms).
  • For individuals who are not fully vaccinated, wear a mask in crowded outdoor settings or during outdoor activities that involve sustained close contact with other people who are not fully vaccinated, consistent with CDC guidance.

For covered contractors with multiple buildings, sites, or facilities, the requirements will apply to all employees and sites unless the covered contractor can affirmatively determine that there will be no interactions between covered contractor employees and non-covered contractor employees during the period of performance of a covered contract. This includes interactions through use of common areas such as lobbies, security clearance areas, elevators, stairwells, meeting rooms, kitchens, dining areas, and parking garages.

Exceptions to mask wearing and/or physical distancing requirements may be provided by the covered contractors consistent with CDC guidelines. For example, exceptions may be provided when an employee is alone in an office with floor to ceiling walls and a closed door, for a limited time when eating or drinking and maintaining appropriate physical distancing, when participating in an activity where a mask may get wet, or where wearing a mask would create a risk to workplace health or safety. The exception must be approved in writing by a duly authorized representative of the covered contractor.

Covered contractors must also designate one or more individuals to oversee the implementation and compliance with the Task Force Guidance. The designated individual(s) must ensure that information on required COVID-19 workplace safety protocols is communicated to covered contractor employees and all other individuals who may be present on a covered contractor workplace site. Additionally, they are charged with ensuring that the covered contractor employees and visitors comply with the requirements related to showing or provision of vaccination documentation.

Further clarification and guidance on coverage and contract provisions is expected from the Federal Acquisition Regulatory Council by October 8, 2021. While Executive Order 14042 only applies to employers with a covered federal government contract, OSHA is currently working on an Emergency Temporary Standard that will apply to all private employers with 100 or more employees and will require employees of such employers to be vaccinated or tested for COVID-19 each week.  If you have any questions about the Executive Order, the new guidance, or the forthcoming OSHA ETS please contact any member of our Labor and Employment Practice Group.

The Biden Administration announced earlier this summer that Long COVID may qualify as a disability under the Americans with Disabilities Act (“ADA”), the Rehabilitation Act and several other federal statutes offering protection for disabled individuals. The Centers for Disease Control and Prevention has defined “Long COVID” as new or ongoing symptoms of COVID-19 that can last for several weeks or months after an individual was infected with the virus.  Long COVID symptoms can include fatigue, “brain fog,” heart palpitations, joint or muscle pain, dizziness, and depression or anxiety.

The Department of Health and Human Services (“HHS”) and the Department of Justice (“DOJ”) subsequently issued guidance explaining how Long COVID may qualify as a disability under the ADA.  A physical or mental impairment is a “disability” if it substantially limits one or more major life activities, such as eating, breathing, working, etc. The guidance reminds us that the phrase “substantially limits” must be construed broadly and the limitation does not need to be permanent or severe in nature.  The guidance also provides several examples of how Long COVID can substantially limit a major life activity, including the following:

  • A person who has lung damage that causes shortness of breath, fatigue and related effects is substantially limited in respiratory function, among other major life activities.
  • A person who has symptoms of intestinal pain, vomiting and nausea that have lingered for months is substantially limited in gastrointestinal function.
  • A person who experiences memory lapses and brain fog is substantially limited in brain function, concentrating, and thinking.

The guidance goes on to state that Long COVID may not always be a disability and an individual medical assessment will be required to determine whether it creates a substantial limitation of a major life activity.  The EEOC recently issued a statement indicating that it agreed with HHS and DOJ’s guidance relating to Long COVID and that it would be updating its technical assistance on this issue in the next few weeks.

In the meantime, employers should be aware that if a COVID “long hauler” is found to have a disability, they may be entitled to a reasonable accommodation. Examples of a reasonable accommodation could include a leave of absence, remote work, job restructuring or part-time work. Employers do not have to alter or eliminate the essential functions of a job or provide an accommodation that causes an undue hardship to the business.

In addition to the ADA, Long COVID also may be covered by the Family and Medical Leave Act (“FMLA”) since it would be considered a serious health condition.  Employers need to understand the protections provided to employees by both the ADA and the FMLA and train managers and supervisors on the applicability of these laws. Employers also should review their existing leave and accommodation policies and procedures to ensure they can manage Long COVID in the workplace.

Should you have questions regarding this guidance, the ADA, or any other federal disability laws, please reach out to a member of the McNees Labor and Employment Group.

The 100-percent premium subsidy for eligible COBRA health care enrollees, enacted earlier this year as part of the American Rescue Plan Act (ARPA), period is ending September 30, 2021.

Group health plans need to send an expiration notice to eligible individuals 15 to 45 days before their premium assistance expires. The last day the notices must be mailed is September 15, 2021.

Plan sponsors should check with their COBRA administrators to ensure this final notice is delivered in a timely manner.

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

An employee may sue an employer under the Pennsylvania Medical Marijuana Act (“MMA”) for discrimination because of the employee’s status as an individual who is certified to use medical marijuana. This was the recent holding of the Superior Court in the case of Moses Taylor Hospital v. Palmiter.  As you may recall, we discussed Palmiter in 2019, when the case was filed, and again in 2020 when the Lackawanna County Court of Common Pleas recognized the right of an employee to sue an employer for discrimination under the MMA – the first court in Pennsylvania to do so.  The Superior Court decision affirms the county court’s holding and creates binding legal precedent for courts across the Commonwealth of Pennsylvania.

As we previously discussed, the private cause of action allows employees to file suit against employers for discrimination because of their status as a certified medical marijuana user.  The employee can file their claims directly with the courts, without having to exhaust administrative remedies. This creates a disconnect between other discrimination claims (i.e. disability, race), which first require the exhaustion of administrative remedies. Accordingly, employers may face multiple actions arising from the same incident at different times.  Further, it remains unclear what statute of limitations period is applicable for alleged violations of the PA Medical Marijuana Act. It is also unclear what remedies an employee might recover from a successful PA Medical Marijuana Act cause of action.  Finally, and most notably, neither the Superior Court nor the Court of Common Pleas opined on whether the conduct alleged by Ms. Palmiter actually constitutes discrimination under the MMA.  The Courts have only determined that a cause of action under the MMA exists.  Whether Ms. Palmiter can ultimately prove her case remains to be seen.

The Superior Court also considered Ms. Palmiter’s wrongful discharge claim, which argues that terminating an employee who is lawfully using medical marijuana outside of work, violates public policy.  The Superior Court allowed the wrongful discharge claim to proceed alongside discrimination claim, noting that Section 2103(b)(1) of the MMA clearly demonstrates public policy against termination of employment and other types of discrimination based on certified marijuana use off the employment premises. The Court noted that when a qualifying patient uses medical marijuana in accordance with MMA, it is a lawful medical treatment and akin to a prescription drug.

What does all of this mean for employers?  Employers would be wise to review any policies, or lack thereof, regarding the treatment of employees and applicants who use medical marijuana outside of work. As the Superior Court pointed out, Section 2103(b)(2) of the MMA allows employers “to discipline an employee for being under the influence of medical marijuana in the workplace or for working while under the influence of medical marijuana when the employee’s conduct falls below the standard of care normally accepted for that position.” Accordingly, an employer’s hands are not completely tied with regard to preventing the use of marijuana in the workplace and preventing employees from creating an unsafe environment due to their marijuana use.  However, the days of zero tolerance for marijuana use, especially when the individual is certified to use medical marijuana under the MMA, appear to be gone.

Employers should also be mindful of their policies and determinations relating to certified medical marijuana use to ensure compliance with all of the various laws and regulations and the potential overlap with other state and federal discrimination laws.  For any questions or concerns regarding medical marijuana policies or any employment-related matters, contact Denise Elliott.

The full cite for Palmiter is as follows:  Scranton Quincy Clinic Company, LLC d/b/a Physicians Health Alliance and Scranton Quincy Hospital Company, LLC d/b/a Moses Taylor Hospital v. Pamela Palmiter, 2021 Pa. Super. 155 (August 5, 2021).

Last week, the Pennsylvania Supreme Court issued a decision that has broad implications for Pennsylvania employers.  The Court’s decision in In Re: Amazon.com, Inc., which can be read here, established two important differences between Pennsylvania’s overtime law and the federal Fair Labor Standards Act (FLSA).  These differences are likely to create significant potential compliance and liability risks for Pennsylvania employers.

The case arose after Amazon employees claimed they were required to undergo anti-theft security screenings after clocking out for the day but before leaving the work facility.  These screenings included metal detectors, bag searches, and secondary screenings if the employee set off an alarm.

In its decision, the Court considered the following two questions as to Amazon’s pay practices under Pennsylvania law:

1)         whether time spent on an employer’s premises waiting to undergo, and undergoing, mandatory security screening is compensable as “hours worked” within the meaning of the Pennsylvania Minimum Wage Act (PMWA); and

2)         whether the de minimis exception recognized under the federal FLSA exists under the PMWA.

On both questions, the Court’s majority (in a 5-2 decision that fell on political party lines) provided answers that were unfavorable for employers and inconsistent with the established requirements of the FLSA.

I.        Time Spent in Mandatory Security Screenings

On the first question, the Court began by noting that the U.S. Supreme Court held in a 2014 decision that time spent by Amazon workers going through the same security screenings was not compensable as “hours worked” under the FLSA, due to amendments made to the FLSA by the federal Portal to Portal Act of 1947.  See Integrity Staffing Solutions v. Busk, 574 U.S. 27 (2014).

However, the Pennsylvania Supreme Court found that the definition of “hours worked” in the PMWA regulations was both different and broader than the definition found in the Portal to Portal Act.  The Court also noted that Pennsylvania has never adopted the Portal to Portal Act’s amendments to the FLSA.

As a result, consistent with the PMWA regulations, the Court held that compensable hours worked under the PMWA for minimum wage and overtime pay purposes include any of four categories of time:

  • time during which the employer requires an employee to be on the employer’s premises;
  • time during which the employer requires an employee to be on duty or to be at the prescribed workplace;
  • time spent in traveling as part of the duties of the employee during normal working hours; and
  • time during which an employee is employed or permitted to work.

In so finding, the Court reaffirmed the principle that the PMWA manifests Pennsylvania’s “strong public policy protecting an employee’s right to be adequately compensated for all hours for which they work.”  The Court also cited two of its prior decisions finding that the FLSA “establishes only a national floor under which wage protections cannot drop, but more generous protections provided by a state are not precluded.”

With this analysis, the Court held that time spent by the Amazon employees waiting to undergo and undergoing mandatory security screenings on Amazon’s premises constitutes compensable hours worked for minimum wage and overtime pay purposes under the PMWA, because Amazon required the employees to remain on their premises for the screenings.

II.        De Minimis Exception

On the second question, a 1946 U.S. Supreme Court decision and U.S. Department of Labor regulations established a de minimis exception under the FLSA, providing that insubstantial and insignificant periods of time performing work outside scheduled work hours need not be treated as hours worked for overtime pay and minimum wage purposes.  See Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946); 29 C.F.R. § 785.47.

However, the PA Court again declined to apply this settled FLSA precedent to the PMWA, holding that there is no de minimis exception under the PMWA.  The Court found that recognizing a de minimis exception would be inconsistent with the underlying legislative purpose of the PMWA.

III.        Takeaways

The Amazon.com decision has enormous potential ramifications for Pennsylvania employers, reaching well beyond the realm of mandatory on-site security screenings.  The decision is the latest in a series of decisions issued by the Pennsylvania Supreme Court holding that the PMWA’s requirements are broader and more pro-employee than the established requirements of the FLSA.  Simply put, compliance with the FLSA’s overtime pay and minimum wage requirements, which are not simple or easy in their own right, will not ensure compliance with the PMWA.

Some areas where these laws’ requirements now differ include:

  • the white-collar overtime exemption tests;
  • the PMWA lacks an overtime exemption for the computer professional and highly compensated employee;
  • the fluctuating workweek method of computing overtime pay for salaried non-exempt employees is unavailable under the PMWA; and
  • thanks to the com decision, the Portal to Portal Act exclusion for certain preliminary and postliminary activities from “hours worked” and a de minimis exception are not recognized under the PMWA.

Pennsylvania employers should review their pay practices and determine whether non-exempt employees spend any time that the employer is not capturing as compensable hours worked, as this time may qualify under the hours worked test set forth in Amazon.com.  As explained above, this would include a number of situations that do not constitute hours worked under the FLSA.

Risk areas include, in particular, any time that a non-exempt employee is required by the employer to be on the employer’s premises.  Examples include time spent on mandatory security screenings, COVID-related screenings, and donning and doffing equipment or uniforms.  If non-exempt employees are spending any time engaged in such activities on the employer’s premises, this time may need to be included in hours worked for overtime pay purposes under the PMWA.  And these examples may be the tip of the iceberg.

The hours worked definition adopted by the Pennsylvania Supreme Court is broad and seemingly straight-forward.  But, as we’ve seen, it is also inconsistent with the long-standing definition applied under the FLSA.  And, without a potential de minimis exception, even a few minutes here or there could result in a class action lawsuit for the unwary employer.

Wage and hour compliance has long been a significant concern for Pennsylvania employers, even before the Amazon.com decision.  This decision only complicates an employer’s compliance challenges.  Failing to consider and address these issues could result in a heightened risk of expensive and time-consuming class action litigation.

On July 9, 2021, President Joe Biden signed a sweeping Executive Order on “Promoting Competition in the American Economy”.  The Executive Order includes 72 initiatives by more than a dozen federal agencies to address perceived competition problems across the U.S. economy, and signals increased enforcement of the antitrust laws in multiple industries (including agriculture, finance, healthcare, and technology).  For employers, the Executive Order targets competition in labor markets in at least two ways by (1) directing the Federal Trade Commission (“FTC”) to consider curtailing the use of non-compete agreements; and (2) directing the FTC and the Department of Justice (“DOJ”) to consider revising their previous guidance to human resources professionals to prevent employers from sharing information about wages and benefits.

Non-Compete Agreements

Non-compete agreements are used by employers to protect their legitimate interests in trade secrets and other confidential business information, customer relationships and goodwill, and investments in employee training.  The Executive Order, however, argues that non-compete agreements stifle competition and restrict workers’ ability to change jobs.  Accordingly, the Executive Order provides:

To address agreements that may unduly limit workers’ ability to change jobs, the Chair of the FTC is encouraged to consider working with the rest of the Commission to exercise the FTC’s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.

Importantly, the Executive Order does not implement any immediate restrictions on non-compete agreements, but instead directs the FTC to consider the issue.  If the FTC decides to act, it could ban most or all non-compete agreements or focus on restricting non-competes for low wage workers and/or non-exempt employees.  We think the latter approach is more likely, and several states (including Nevada and Virginia) have recently passed such laws.  In that regard, non-compete agreements have been traditionally regulated by the states, by either their courts or their legislatures.  As such, any regulatory action by the FTC – especially a wholesale ban on the use of non-competes – would likely raise federalism concerns and face legal challenges.

The FTC has not issued a statement or other formal response to the Executive Order’s directive on non-compete agreements or indicated when it might take up the issue.  If and when it does, such regulatory action would need to go through the full rulemaking process and could take several years.  Therefore, absent legislative action by Congress, we do not expect any restrictions on the use of non-compete agreements enacted at the federal level in the near future.

Information Sharing

In addition to encouraging the FTC to consider regulating non-compete agreements, the Executive Order encourages the DOJ and the FTC to consider revising the Antitrust Guidance for Human Resources Professionals (“Guidance”) in order to “better protect workers from wage collusion.”  In October 2016, the DOJ and FTC jointly issued the Guidance, which stated the intent of the DOJ to bring criminal prosecutions against participants in no-poaching and wage-fixing agreements.  The Guidance also cautioned employers that sharing information about wages and benefits with each other could subject them to civil antitrust liability, but noted that information exchanges may be lawful in certain circumstances if managed by a neutral third party.  The White House, however, argues that such third-party information exchanges may be used to collaborate to suppress wages and benefits.  Therefore, the Executive Order calls on the DOJ and FTC to strengthen the Guidance to prevent employers from collaborating by sharing wage and benefit information.

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We will be monitoring the FTC and DOJ and will keep you advised of their actions to implement the Executive Order.  If you have any questions about the Executive Order or other issues involving non-compete agreements, please contact any member of our Labor and Employment Practice Group.

The U.S. Supreme Court declared unconstitutional a California regulation that required agriculture employers to give union organizers access to their premises.  The Court held that by requiring employers to provide such access, the regulation amounted to an unconstitutional taking of private property in violation of the Fifth and Fourteenth Amendments to the U.S. Constitution.

Below, we examine the facts and holding of the Cedar Point Nursery case.  Although the case examined a California regulation for an agricultural employer, who is exempt from the National Labor Relations Act (NLRA), we will also look at how this holding may impact the rights and obligations of private employers everywhere with respect to prohibiting on-premises union organizing by non-employees.

The Cedar Point Nursery Case

Union organizers from the United Farm Workers union entered the premises of Cedar Point Nursery, a strawberry grower in Northern California, early one October morning.  Cedar Point Nursery employs about 500 seasonal and full-time workers, none of whom live on the premises.  According to Cedar Point Nursery’s complaint, in October 2015, at five o’clock in the morning, members of the union entered Cedar Point’s property without prior notice and used bullhorns to rally hundreds of workers, causing some to join the organizers in protest and others to leave the worksite altogether.

The union claimed it had the right to enter the property unannounced to rally workers under California’s Agricultural Labor Relations Act, which protects agricultural workers right to form and join unions.  Under the regulations adopted under the Act, this right of organization includes the right of union organizers to “access” agricultural employers’ property in order to solicit support for the union.  In other words, the employees’ statutory right to organize compelled employers in California to open their premises to union organizers (for up to 3 hours per day, 120 days per year by the terms of the regulation).  Note that these union organizers were not employees, so their only business on an employer’s premises was to solicit support for union activities.

Cedar Point filed suit in federal court to ask for an injunction to prevent the union organizers from attempting to enter their property again.  Cedar Point argued that the regulation requiring it to provide the union organizers’ access to its property was an unconstitutional physical taking of their land.

The Court agreed.  A 6-3 majority held that the access regulation was a per se physical taking because it gave the unions a right to “physically invade” the employer’s property.  The Court found that this right to “invade” the property given by the regulation was different from those regulations that merely restrict how a property owner uses land.  That is, the access regulation here did not simply restrain the employer’s use of its own property; it took away entirely the company’s right to exclude others from its land and gave the right of access to a third party – union organizers.  Thus, the access regulation was unconstitutional.

What does this case mean for private employers?

Much like California’s Agricultural Labor Relations Act, the National Labor Relations Act also gives employees a right to self-organization.  So too does the NLRA make it an unfair labor practice for an employer to interfere with this right.

Most private employers in the United States are governed by the NLRA.  Access rights are often an issue under the NLRA.  But, the NLRA has been construed to permit employers to exclude non-employee union organizers from their premises except under two circumstances – 1) when the union organizers have no other reasonable means for accessing the employees (for instance, if the employees live on the premises), and 2) when the exclusion would be discriminatory.

The National Labor Relations Board (NLRB) recently narrowed the circumstances that would constitute discrimination under the second exception.  In a 2019 case, the NLRB determined that an employer would commit an unfair labor practice by excluding union organizers only if it permitted other groups access for activities similar to what the union sought to engage.  In other words, an employer could deny access to non-employees seeking to engage in organizing activities on its property while allowing non-employee access for other charitable, civic, or commercial activities that are not similar in nature to organizing activities.

Interestingly, Justice Kavanaugh noted in his concurring opinion that the circumstances compelling an employer to permit access to union organizers under those NLRA exceptions constitute a “necessity” that will not amount to a taking because, as the Majority put it, it is consistent with longstanding background restrictions on property rights.  This seems like a massive stretch.  The right of non-employee union organizers to enter employer premises to solicit union support is hardly a traditional common law privilege to enter private property, like entering to avoid an imminent public disaster or the right of law enforcement to enter to conduct a search or arrest.  To the contrary, it is a statutory right created within the last century.

Whether the access rules under the NLRA will withstand a constitutional challenge in light of the holding in Cedar Point Nursery remains to be seen.  For now, employers should gain a full understanding of the access rules applicable to their property in the states where they operate and be sure to have appropriate polices in place to protect their property rights to the extent permissible under the law.