McNees’ Benefits Group will be issuing a “Did you know?” series throughout the year providing short compliance reminders.

Did you know that qualified retirement plans may now allow a participant with a terminal illness to receive distributions from their retirement accounts without incurring the usual 10% penalty? The employer will need to amend the retirement plan to allow for such distributions.

For more information regarding compliance for your benefit plans, contact any member of the McNees Labor and Employment Group.

Now more than ever, it seems that employees are willing to express themselves.  While open communication with and among employees is usually a good thing, sometimes an employer’s rules are broken in the process.  A worker might call her supervisor a nasty name while complaining about her production team’s overtime assignments.  An employee could use profanity to describe working conditions in a social media post in which he also asks his co-workers to join a labor union. A striking employee may threaten a company executive while picketing.

In such cases, an employer is likely to consider disciplining employees for breaking its rules while otherwise engaged in activity protected by the National Labor Relations Act. Nearly three years ago, the NLRB announced that it would apply the same test when determining whether disciplinary action is lawful, regardless of the context in which the employee’s misconduct occurred.  In General Motors, LLC, the Board held that in order to prove that disciplinary action violates the Act, an employee was required to show that:

  1. the employee engaged in Section 7 protected activity;
  2. the employer knew of that activity; AND
  3. there is a causal connection between the discipline and the Section 7 activity.

If an employee met this initial burden, an employer could still avoid liability by proving that it would have taken the same action in the absence of protected activity.  Our discussion of General Motors, LLC can be found here.  Many employers welcomed this universal test, as it standardized the law regardless of the context in which the employee’s misconduct happened.  But, alas, the General Motors standard is no more.

On May 1, the Board issued its ruling in Lion Elastomers LLC II. There it overruled General Motors in favor of applying setting-specific tests to evaluate the propriety of employee discipline.  Now, the setting of an employee’s misconduct once again determines the standard by which disciplinary action will be judged.  The setting-specific tests are as follows:

First, when discipline arises out of an employee’s conduct toward management in the workplace, the Board will apply the test originally established in Atlantic Steel.  That test considers the following four factors:

  1. the place of the interaction between employee and management;
  2. the subject matter of the discussion;
  3. the nature of the employee’s outburst; AND
  4. whether the outburst was, in any way, provoked by an employer’s unfair labor practice.

Next, when discipline arises out of an employee’s misconduct on social media or while interacting with a co-worker in the workplace, the Board will apply its “totality of the circumstances” test without regard to any particular factor.  This test was originally enunciated in Pier Sixty, LLC.

Finally, when discipline arises out of an employee’s misconduct on the picket line, the Board will again consider the Clear Pine Mouldings standard.  Under that test, the Board examines the totality of the circumstances to assess whether non-striking employees reasonably would have been coerced or intimidated by the misconduct.  If so, discipline is proper.

As the current NLRB continues to unwind many of the employer-friendly rules established by the previous Board, employers must now remember that context matters when disciplining employees for conduct that occurs during otherwise protected activity.  One size no longer fits all.

McNees’ Benefits Group will be issuing a “Did you know?” series throughout the year providing short compliance reminders.

Did you know that group health plans are required to submit a gag clause prohibition compliance attestation to the Departments of Labor, Health and Human Services, and Treasury prior to December 31, 2023?  The annual attestation provides that the group health plan has not, since December 27, 2020, entered into and will not enter into a contract with a health care provider, third-party administrator, or other service provider offering access to a network of providers that would directly or indirectly restrict the group health plan from disclosing the quality and cost of services and certain other information.

For more information regarding compliance for your benefit plans, contact any member of the McNees Labor and Employment Group.

We have posted about employer use of Artificial Intelligence, AI, and the emerging legal issues associated with such tools, and no doubt, AI is going to continue to be a hot topic.  The growth of AI tools and their usage across industries has been explosive.

Recently, we attended a Webinar on Chat GPT and learned more about the awesome power of this technology.  We walked away very impressed, and even a little scared of its capabilities.  One key takeaway: while Chat GPT may be a good way to start a project, at this point, employers should be sure to use REAL intelligence to review and finalize any work product.  Legal issues are just starting to surface and the field is dynamic.

Still, we wanted to give it a shot.  So we asked Chat GPT to help us with a first draft of a blog post.  We asked it, please help me with a blog post for Human Resources professionals about Chat GPT.  Here is what it came up with (with some careful editing from us):

With the rise of artificial intelligence, HR professionals are now presented with new tools to streamline their work processes and make more informed decisions. One such tool is Chat GPT, a large language model developed by OpenAI based on the GPT-3.5 architecture. In this blog post, we will explore how Chat GPT can be used by HR professionals to improve their work processes.

What is Chat GPT?

Chat GPT is a large language model that uses deep learning techniques to generate human-like responses to text prompts. The model is based on the GPT-3.5 architecture, which allows it to generate responses that are both accurate and contextually relevant. Chat GPT can be used in a variety of applications, including chatbots, customer service, and even HR.

How can HR professionals use Chat GPT?

HR professionals can use Chat GPT in a variety of ways to streamline their work processes and improve their decision-making. Here are just a few examples:

       1.  Recruitment

Chat GPT can be used to automate the recruitment process by answering candidates’ questions about the job requirements, company culture, and application process. This can free up HR professionals to focus on other tasks while ensuring that candidates receive timely and accurate information.

       2.  Onboarding

Chat GPT can also be used to automate the onboarding process by answering new hires’ questions about company policies, benefits, and procedures. This can help new hires feel more comfortable and confident in their new role, while also reducing the workload for HR professionals.

       3.  Performance management

Chat GPT can be used to gather feedback from employees about their performance and provide personalized recommendations for improvement. This can help HR professionals identify areas where employees need additional support and create more effective performance improvement plans.

       4.  Employee engagement

Chat GPT can also be used to engage with employees and provide them with personalized support. For example, Chat GPT can be used to answer questions about company benefits, provide training resources, and even schedule appointments with HR professionals.

       5.  Compliance

Chat GPT can also be used to ensure compliance with company policies and legal regulations. For example, Chat GPT can be used to answer employees’ questions about policies, provide information about mandatory training requirements, and even alert HR professionals to potential compliance violations.

Our Conclusion

There is no doubt that OpenAI, and Chat GPT specifically, is a powerful tool.  OpenAI is going to change the world and the world of work.  There is also no doubt that the lightning-fast changes happening in this space will continue for the foreseeable future.

Certainly, employers need to be aware of the power of these tools, how they may be useful to the organization, and where there are risks.  In a future article, we will discuss what employers should be doing to educate and guide employees as these tools become more widely used.

McNees’ Benefits Group will be issuing a “Did you know?” series throughout the year providing short compliance reminders.

Did you know that an employer must issue an updated summary plan description (“SPD”) at least every five (5) years that contains all recent amendments? If there were no amendments to the SPD, then the SPD must be reissued every 10 years.

For more information regarding compliance for your benefit plans, contact any member of the McNees Labor and Employment Group.

On January 10, 2023, Lancaster County Court of Common Pleas Judge Jeffrey Wright addressed the question that has been plaguing employers since the passage of the PA Medical Marijuana Act (the “Act”) – what constitutes being “under the influence” for purposes of the Act’s safety exception?  As a reminder, when the Act was passed, the legislature included a broad safety exception within Sections 510(3) & (4) of the Act, which provides:

A patient may be prohibited by an employer from performing any task which the employer deems life-threatening, to either the employee or any of the employees of the employer, while under the influence of medical marijuana.

A patient may be prohibited by an employer from performing any duty which could result in a public health or safety risk while under the influence of medical marijuana.

However, ‘under the influence’ was not defined for purposes of these provisions.

What is “under the influence?”

In the Lancaster County case of Clark v. J.R.K. Enterprises, Inc., the plaintiff was a roadside flagger who utilized medical marijuana outside of work to treat anxiety.  After several of his co-workers were sent for random drug tests, he admitted to his employer that he used marijuana nightly and, if tested, would test positive because he always had marijuana in his system.  The employer considered flagging to be a safety sensitive job and determined that plaintiff could not perform the flagging job unless he agreed to stop using medical marijuana.  Challenging this decision, the plaintiff filed suit, alleging discrimination in violation of the Act.

The employer moved for dismissal, arguing that plaintiff’s own admission that he “always had marijuana in his system” meant that he would be consistently under the influence and thus should not be performing safety sensitive duties.  Initially, Judge Wright denied the motion, holding that there was a factual dispute regarding the definition of ‘under the influence,’ which experts could address at trial.  However, following the decisions in Commonwealth v. Dabney (Pa. Super. 2022) and Commonwealth v. Haney (Pa. Super. 2022), Judge Wright reconsidered and dismissed the suit.

Dabney and Haney are both DUI cases in which, after being pulled over, the driver acknowledged medical marijuana use, the police officer had probable cause to require a drug test and the driver subsequently tested positive for marijuana.  In both cases, the drivers argued that they should not be charged with DUI, because their marijuana use was legal.  The courts disagreed.  In Dabney, the court held that the Act does not exempt a driver with a medical marijuana card from the prohibition against driving with any amount of marijuana or marijuana metabolites in the driver’s system.  Further, the court listed all of the actions permitted by the Act: growing, processing, manufacturing, acquiring, transporting, selling, dispensing, distributing, possessing and consuming marijuana.  It then noted what is not specifically permitted in the Act: “driving with a controlled substance in one’s blood.”  Likewise in Haney, the court upheld Pennsylvania’s zero tolerance DUI law for marijuana metabolites and noted that “driving after using medical marijuana, a Schedule I controlled substance, is not included in the lawful use of medical marijuana under the Act.”

Applying the rationale of Dabney and Haney to the Clark case, Judge Wright agreed with the employer’s argument that it would be absurd to criminally prosecute a driver for having marijuana in their blood, while at the same time allowing Clark to direct and control traffic on roadways with marijuana in his blood.  Because “the lawful use of medical marijuana does not include driving after using medical marijuana,” Judge Wright concluded that the “lawful use of medical marijuana cannot, likewise, include dressing in safety gear, entering the roadway, and directing drivers through precarious construction zones after using medical marijuana.”  Further discussing the issue, Judge Wright concluded that the General Assembly purposefully failed to include a definition of “under the influence” in the catch-all safety exception to the Act, whereas elsewhere in the Act, the term “under the influence” was linked to specific levels of THC in blood serum.  Based on this conclusion, the Judge reasoned that “the General Assembly’s clear choice to omit a specific nanogram level that employers may allow or prohibit relieves employers of a practically impossible-to-execute duty,” and that “to construe ‘under the influence’ to mean anything other than having any amount of marijuana in a Patient-Employee’s system would be altogether untenable.”

What does this mean for employers?

So, what is the takeaway from the Clark decision?  First, it is important to keep in mind that the decision of one Court of Common Pleas Judge is not necessarily binding on any other judge in the Commonwealth.  Accordingly, a judge in another county or on a higher court would be free to disagree with Judge Wright and reach a different conclusion.  However, Judge Wright’s rationale is based upon the holding of two recent Superior Court cases, which are binding on all judges in the county courts.  Accordingly, employers who wish to uphold a zero-tolerance policy for employees performing clearly safety-sensitive jobs (jobs that could be life threatening and jobs that could result in public health or safety risks) now have a very strong argument for doing so.  This is especially true when the employee either actually tests positive, despite only off duty use, or admits that they will test positive.

If you have questions regarding which jobs are safety sensitive and whether a zero-tolerance policy makes sense for your business, please reach out to Denise Elliott or another member of the McNees Labor and Employment Group.

After the pandemic began to ease, and labor availability was the lowest in recent history, many employees found themselves working more and more to fill the gaps in the workforce.  That led to the trend popularized a year ago called “quiet quitting.”  Under its tamest definition, quiet quitting was/is a practice where employees only did their own job duties – not the duties of multiple employees. Now, quiet quitting has morphed into a new trend: “bare minimum Mondays.”

Bare minimum Mondays is not just employees limiting their work to the duties of their specific job.  It goes further than that.  It is the idea that within the employee’s specific duties, the employee does the absolute minimum – at least on Mondays.  This trend demonstrates either a misunderstanding of the general direction of our economy, a naivete of how the world works, or a symptom of the employee’s disassociated self – where the employee has failed to connect his/her work of today with his/her employment prospects of tomorrow.

A year ago, when quiet quitting was a thing, employees had leverage (more than they had in a very long time, if not ever).  Every aspect of their work was needed, even if that was limited to their individual duties (and even if it was mediocre).  So, employers treaded lightly, simply to retain the workforce they had.  Now, employers’ financial outlooks are in a much more uncertain place.  Some employers are still in the same position they were a year ago, needing all the labor they can get.  Other employers are at the other end of the spectrum, looking to shed labor.  Still others are teetering between one and the other.

McNees has assisted clients with several reductions in force in the last three months.  We expect that trend to continue, if not accelerate.  When identifying the criteria to use to select employees for layoff, we have noticed a common theme across clients.  The predominant criterion has not been seniority.  It has not been employees with the highest wages.  It has not been a subjective consideration of which employees are liked and which are disliked.  The predominant criterion has been productivity.

Employees who work for employers that are contemplating cost-saving measures might want to read the room.  By following the “bare minimum Monday” trend, an employee just might be self-selecting themselves for a future reduction in force.  Unlike the quiet quitters of last year – who, if terminated, could find new employment almost instantaneously (probably at a higher wage) – those laid off now or in the future will be getting dumped into a very different job market.  This is not to suggest that an employee should be doing the work of multiple employees.  It is only to suggest that an employee doing the bare minimum of his/her own job could ultimately be an act of self-sabotage.

McNees’ Benefits Group will be issuing a “Did you know?” series throughout the year providing short compliance reminders.  This is the first in the series.

Did you know that if you withhold premium payments pre-tax from employee wages, you must have a cafeteria plan (also called 125 plan)?  If you do not have a cafeteria plan, then your employees owe taxes on the premiums withheld.

For more information regarding cafeteria plans, contact any member of the McNees Labor and Employment Group.

As part of the Consolidated Appropriations Act of 2023, Congress passed two new pregnancy-related laws requiring covered employers to provide reasonable accommodations to employees due to pregnancy, childbirth, and related medical conditions. The two new laws are the Pregnant Workers Fairness Act (PWFA), effective June 27, 2023, and the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act), effective April 28, 2023. These laws will generally enhance the protections afforded to pregnant employees and create new compliance obligations for employers.

The PWFA will require employers with 15 or more employees to grant temporary and reasonable accommodations for pregnant employees or pregnant job applicants. Under the current Pregnancy Discrimination Act (PDA), covered employers are generally only prohibited from discriminating against pregnant employees. The PDA does not, however, guarantee accommodations for pregnant employees. The PWFA will not only require covered employers to provide reasonable accommodations to pregnant employees, but will also prohibit employers from discriminating against a job applicant or employee because of their need for a pregnancy-related accommodation.

If this all sounds familiar, it is because the PWFA’s protections are similar to those outlined in the Americans with Disabilities Act (ADA). Like the ADA, the PWFA will require covered employers to engage in an interactive process with pregnant employees and to provide reasonable accommodations where appropriate. But, like the ADA, pregnant employees will not necessarily be entitled to the accommodation of their choice under the PWFA – just a reasonable accommodation that does not create an undue hardship on the employer. Notably, though, the PWFA will also prohibit employers from requiring employees to take paid or unpaid leave when a different reasonable accommodation is available. Lastly, the PWFA will prohibit employers from retaliating against an employee who requests or receives a reasonable accommodation due to pregnancy, childbirth, or a related medical condition.

The other recently enacted law, the PUMP Act, will expand employers’ existing obligations to provide employees with time and space to express breastmilk. In particular, the PUMP Act will require that all breastfeeding employees, whether salaried or hourly, be given time to express breastmilk and a private place to do so, other than a bathroom. Additionally, time spent expressing breastmilk must be considered hours worked if the employee is working while expressing breastmilk. Notably, employers with fewer than 50 employees will be given an opportunity to request an exemption from the law if they demonstrate that compliance would cause an undue hardship.

Although the PWFA and PUMP Act will expand the rights of pregnant employees under federal law, numerous states and cities have already passed their own pregnancy accommodation laws, often exceeding these upcoming federal requirements. For example, cities like Philadelphia and Pittsburgh both have robust local ordinances addressing pregnancy accommodations in the workplace. Thus, for employers who operate in jurisdictions where existing laws require workplace accommodations for pregnant employees, the PWFA and PUMP Act may not have much of an impact. However, for all other employers, now is the time to start considering what changes to current practices might be necessary in order to comply with the PWFA and PUMP Act when they become effective. For any questions related to these laws, or any other labor and employment compliance issues, reach out to any member of the McNees Labor & Employment Group.

On January 5, 2023, the Federal Trade Commission (“FTC”) issued a Notice of Proposed Rule Making and additional information describing a new proposed rule that would prohibit employers across the country from entering into non-compete agreements with their workforce. The FTC’s press release and related information on the proposed rule can be found here.

The FTC’s proposed rule is in response to a prior Executive Order from President Biden, which, among other things, encouraged the FTC to use its rule-making authority to “to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” At the time, few people likely anticipated the broad sweeping prohibition that would follow under the FTC’s current proposed rule.

Below is a summary of a few key aspects from the FTC’s proposed rule:

  • Broad Definition of a Non-Compete Clause – A non-compete clause is defined as “a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.” (Proposed as 16 C.F.R. § 910.1(b)(1).)
  • Functional Test Used to Determine if a Contractual Clause is a Non-Compete Clause – In addition to the broad definition discussed above, a non-compete clause includes “a contractual term that is a de facto non-compete clause because it has the effect of prohibiting the worker from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer.” (Proposed as 16 C.F.R. § 910.1(b)(2) (emphasis added).) The proposed rule provides examples of a few types of contract provisions that may be de facto non-compete clauses. One such example is “a non-disclosure agreement between an employer and a worker that is written so broadly that it effectively precludes the worker from working in the same field after the conclusion of the worker’s employment with the employer.” (Proposed as 16 C.F.R. § 910.1(b)(2)(ii).)
  • The Proposed Rule Applies to More than Just Employees – The proposed rule’s broad ban on non-compete clauses applies not only to employees, but also to independent contractors, externs, interns, volunteers, apprentices, and individual sole proprietors who provide a service to a client or customer. (Proposed as 16 C.F.R. § 910.1(f).)
  • Existing Non-Competes Must be Rescinded with Notice to Current and Former Workers – As all future non-compete clauses would be banned under the proposed rule, employers would also be required to rescind existing non-compete clauses that are entered into prior to the compliance date of the proposed rule (which is currently set for 180 days after publication of the FTC’s final rule). In order to rescind existing non-compete clauses, employers must provide written notice to both current and former workers (see broad definition above) bound by non-compete clauses (see broad definition above). The written notice must be provided in an individualized communication on paper or in a digital format (such as email or text message). The proposed rule also provides model language that would satisfy this written, individualized notice requirement to current and former workers. (Proposed as 16 C.F.R. § 910.2(b)(2)(C).)
  • Narrow Exception for the Sale of a Business – The proposed ban on non-compete clauses does not apply to a non-compete clause entered into between a buyer and seller of a business so long as the individual restricted by the non-compete is a substantial owner, member, or partner of the business (meaning the individual holds at least 25% interest in the business entity) at the time the individual enters into the non-compete clause. (Proposed as 16 C.F.R. § 910.3.)
  • Proposed Rule Supersedes Any State Law – The proposed rule is intended to supersede all state laws, regulations, orders, and interpretations of them that is not consistent with the proposed rule’s requirements. Nonetheless, states will still be permitted to impose requirements and restrictions against non-compete clauses if they provide greater protections than those provided by the proposed rule.

The FTC’s proposed rule is at the first stage of the rule making process, where feedback is being solicited from the public. As part of the public comment period, the FTC is seeking comment on several alternatives to the proposed rule, including whether different standards should apply to senior executives (something short of a ban), and whether low-wage and high-wage workers should be treated differently under the proposed rule. The public comment period is open until March 10, 2023. Comments on the proposed rule can be made and viewed here.

The FTC’s proposed rule is further indication of the growing scrutiny over non-compete restrictions, particularly as they relate to low-wage earners. In fact, a number of states have already introduced new bills in the early legislative sessions of 2023 that would significantly limit the use of non-compete provisions in the employment relationship. Some of those states include New Jersey, New York, and West Virginia.

The FTC’s proposed rule has already faced opposition, including a dissenting statement from FTC Commissioner Christine S. Wilson, and an announcement from the US Chamber of Commerce declaring the proposed rule “blatantly unlawful.” There will undoubtedly be legal challenges to the proposed rule should it become a final rule (much like the legal challenges raised against OSHA’s COVID-19 vaccination rule). As a result, it will likely be some time before we know whether the FTC’s propose rule is the beginning of the end for non-compete agreements in the workplace. We will continue to monitor and provide updates as the FTC’s proposed rule moves through the administrative process.