6/5/23: NLRB General Counsel Issues Memo Opining That Non-Compete Agreements Violate the NLRA

June 5, 2023

By Nicole Elgin

The National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued Memorandum GC 23-08 explaining her position that offering and binding employees to non-competition agreements violates the protections of the National Labor Relations Act (NLRA) and constitutes an unfair labor practice. The Memorandum does not change the law, but it shows the General Counsel’s intent to push for the NLRB to adopt this position as law.

The Memorandum details Ms. Abruzzo’s rationale for why “overbroad” non-competition agreements chill employees from exercising their rights under the NLRA. The Memorandum argues that a non-competition agreement is overbroad when it could reasonably be construed by employees as denying them the ability to quit or change jobs by cutting off their access to employment opportunities for which they are qualified.  The General Counsel argues that employees bound by overbroad non-competition agreements are restricted or discouraged from taking concerted actions such as collectively resigning to obtain concessions from their employers. Therefore, offering, entering into, or enforcing an overbroad non-competition agreement arguably constitutes a violation of Section 8(a)(1) and (5) of the NLRA. As a reminder, these arguments apply only to “employees” as that term is defined under the NLRA.

The Memorandum also argues that non-competition agreements may be permissible in limited circumstances when the agreement “is narrowly tailored to special circumstances justifying the infringement on employee rights.” The General Counsel then provides examples of employer interests which, in her opinion, would or would not justify such an infringement. To the General Counsel, protecting proprietary and/or trade secret information constitutes a legitimate interest. The General Counsel’s viewpoint does not consider retaining employees, protecting investments in training, or avoiding competition with former employees to be legitimate interests.

This Memorandum signifies an additional attempt by various executive agencies to restrict employers’ abilities to bind employees through non-competition agreements. Employers can reference our prior E-Alert on the FTC’s rulemaking to try to restrict non-competition agreements. Again, it is important to note that this Memorandum does not change the law. However, it indicates that the NLRB General Counsel is likely to push the NLRB to adopt the Memorandum’s reasoning by advancing unfair labor practice charges against employers who the GC’s office believes use non-competition agreements to chill the exercise of Section 7 rights.

Click to access a PDF of this E-Alert.

For questions related to non-competition agreements or compliance with the NLRA, contact Nicole Elgin at 503-276-2109 or nelgin@barran.com.

6/1/23: DOL Publishes Guidance Regarding FMLA Leave & Counting Holidays

June 1, 2023

By Missy Oakley

On May 30, 2023, the Department of Labor’s Wage and Hour Division (“WHD”) published an Opinion Letter regarding how to calculate the amount of leave an employee uses under the federal Family and Medical Leave Act (“FMLA”) where an employee takes FMLA leave for less than a full week during a week that includes a holiday.

When an employee takes a full workweek of FMLA leave during a week that includes a holiday, the employee uses a full week of FMLA leave. However, the Opinion Letter specifically examines the situation where an employee takes FMLA leave on an intermittent or reduced schedule during a week that includes a holiday. The Opinion Letter explains that the holiday does not reduce the amount of the employee’s FMLA leave entitlement unless the employee was scheduled and expected to work on the holiday. That is because when an employee takes leave for less than one full workweek, the amount of FMLA leave used is determined by looking at the employee’s actual workweek.

For example, consider an employee who normally works Monday through Friday and needs to take FMLA leave in a week with a Friday holiday. If the employee needs to take FMLA leave every day that week, the employee will use a full week of FMLA leave. According to the WHD, if this same employee only needed to take FMLA leave Wednesday through Friday, the employee would use only 2/5 of a week of FMLA leave. The Friday holiday would not count against the employee’s FMLA leave entitlement. Click here to read the WHD’s full opinion letter.

For questions about FMLA compliance, contact Missy Oakley at 503-276-2122 or moakley@barran.com.

5/31/23: Alignment of Paid Leave Oregon with the Oregon Family Leave Act

May 31, 2023

By Amy Angel

When Paid Leave Oregon was enacted in 2019, stakeholders noted conflicts with the Oregon Family Leave Act (“OFLA”), raising many questions regarding compliance and administration. Senate Bill 999, which amends both Paid Leave Oregon and OFLA, attempts to provide some answers. SB 999 has passed both the Senate and the House and, once signed by Governor Kotek, will take immediate effect.

Below is an overview of the key amendments:

Alignment of Leave Years: SB 999 amends OFLA to incorporate Paid Leave Oregon’s forward-looking definition of “benefit year” beginning on the Sunday before an employee’s first day of leave. Employers may update their OFLA leave year now, or beginning September 3, 2023, when Paid Leave Oregon begins, such that leave under both laws will run concurrently according to the same leave year. Beginning July 1, 2024, employers will be required to administer OFLA according to this forward-looking definition.

Expanded Definition of “Family Member”: OFLA’s definition of “family member” now aligns with Paid Leave Oregon and adds siblings, step-siblings, and the spouse or domestic partner of a sibling, step-sibling, grandparent, or grandchild, as well as any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family member. The amendment also (1) directs BOLI to adopt factors by September 3, 2023, to determine whether an individual qualifies as a family member by reason of affinity, and (2) grants BOLI authority to develop and use an attestation form by which an employee may attest to the affinity factors adopted by BOLI.

Expansion of Employee Job Protections: Both OFLA and Paid Leave Oregon now require employers to offer employees returning from leave equivalent positions at job sites within 50 miles of the job site of the employee’s former position, if the position previously held by the employee no longer exists and an equivalent position is not available at the same jobsite.

Affirmation of Concurrency: In an attempt to address concerns relating to the potential “stacking” of leave available under OFLA and Paid Leave Oregon, OFLA is amended to affirm that leave taken under OFLA that qualifies as protected leave under FMLA or Paid Leave Oregon must be taken concurrently with, and not in addition to, any leave under FMLA and Paid Leave Oregon.

Employee Contributions to Health Insurance Premiums: Paid Leave Oregon now aligns with OFLA and requires employees to continue making any regular contributions to the cost of health insurance premiums during periods of leave. Additionally, employers who pay any employee-portion of insurance premiums during a leave may deduct up to 10% of the employee’s gross pay each pay period to recover those amounts upon the employee returning to work.

What You Can Do Now:

1. Align your leave years, to the extent possible. While employers also covered under FMLA will not be able to fully align leave years under all three leave laws, the closer you can get to alignment, the more likely protected leave will run concurrently. To change the leave year, employers must give employees 60 days’ notice. To be effective when Paid Leave Oregon benefits begin on September 3, 2023, employers should determine whether they would like to change their OFLA or FMLA leave year to a rolling-forward benefit year and provide employees notice by July 5, 2023.

2. Revise your OFLA policy to ensure it is in alignment with SB 999, including the change in definition of “family member.”

3. Be on the lookout for future E-Alerts that highlight administrative rule changes.

For questions on compliance with Paid Leave Oregon-related policy updates, decision-making, or advice, contact Amy Angel at (503) 276-2195 or aangel@barran.com.

5/31/23: Oregon Increases Civil Penalties & Expands Investigations for Violations of Workplace Health & Safety Laws

May 31, 2023

Oregon Governor Tina Kotek signed Senate Bill 592 into law on May 24, 2023, resulting in significant amendments to ORS 654.067 and ORS 654.086. These amendments introduce stricter civil penalties and expanded workplace investigations for violations of Oregon’s workplace health and safety laws. As SB 592 takes immediate effect upon passage, employers should promptly familiarize themselves with these changes and understand their potential impact on operations.

Increased Penalties for Workplace Safety Violations

A significant amendment under SB 592 involves increasing the Oregon Occupational Safety and Health Division’s (Oregon OSHA) fines for workplace safety violations to align with the standards set by the federal Occupational Safety and Health Administration (OSHA).

As amended, ORS 654.086 establishes a tiered penalty structure based on the nature and severity of the violations:

(1) Non-serious violations may result in civil penalties up to $15,625 per violation.

(2) Serious violations, meaning those with a substantial probability of death or serious physical harm, will result in civil penalties ranging from $1,116 to $15,625 per violation.

(3) Serious violations causing or contributing to an employee’s death will incur civil penalties ranging from $20,000 to $50,000 per violation.

Repeat offenders of Oregon’s workplace health and safety laws will also face stricter penalties:

(1) Willful or repeated violations will result in civil penalties ranging from $11,162 to $156,259 per violation.

(2) Willful or repeated violations causing or contributing to an employee’s death will incur a minimum civil penalty of $50,000 per violation, with a maximum penalty of $250,000.

(3) Failure to correct a violation, as cited by Oregon OSHA, may incur penalties up to $15,625 per day of continued violation.

Expanded Inspection Authority

In addition, SB 592 amends ORS 654.067 to expand the Director of the Department of Consumer and Business Services (DCBS) inspection authority in response to violations of workplace health and safety laws. The Director can now conduct comprehensive inspections of any place of employment based on the establishment’s violation history of a state’s occupational safety and health laws.

As amended, ORS 654.067 provides that comprehensive inspections will be conducted under the following circumstances:

(1) Whenever an accident investigation reveals that a violation has caused or contributed to an employee’s work-related fatality, a comprehensive inspection must be conducted within one year of the associated closing conference.

(2) If three or more willful or repeated violations occur within a one-year period, a comprehensive inspection must be conducted within one year of the most recent willful or repeated violation’s associated closing conference.

Reporting Requirements

Lastly, SB 592 introduces new reporting requirements for the DCBS. The Director is now obligated to submit an annual report to the Legislative Assembly’s interim committees on Business and Labor. This report will summarize the total number and amount of penalties assessed, the total number of appeals filed, and the total number and scope of inspections conducted, including the circumstances that led to the inspections.

Given these changes, it is crucial for employers and business owners to maintain strict compliance with health and safety laws and remain informed about state and federal guidelines.

For questions regarding SB 592, contact the Barran Liebman team at 503-228-0500.

5/3/23: NLRB Changes Standard for Assessing Discipline of Individuals Engaged in Protected Conduct

May 3, 2023

By Nicole Elgin

On May 1, 2023, in Lion Elastomers LLC II, the National Labor Relations Board (NLRB) overruled General Motors, a case that provided the standard for determining when an employer unlawfully disciplines an employee who engages in “abusive conduct” while also engaging in concerted activities protected under the National Labor Relations Act (NLRA). In its previous framework, the NLRB focused its analysis on an employer’s motive when taking an adverse employment action. Under its new decision, the NLRB will instead look to the “setting-specific” context in which the employee’s abusive conduct takes place.

Now, the NLRB will apply one of three different setting-specific standards:

(1) The Atlantic Steel test will apply to employee conduct towards management in the workplace. Under Atlantic Steel, the NLRB weighs the following factors to assess whether an employee’s conduct during Section 7 activity loses its protected status: (a) the place of the discussion; (b) the subject matter of the discussion; (c) the nature of the employee’s outburst; and (d) whether the outburst was provoked by an employer’s unfair labor practice.

(2) The Totality-of-the-Circumstances test will apply to an employee’s abusive conduct in social media posts or conversations among employees. As its name implies, under this test the NLRB considers the totality of the circumstances for determining whether an employee’s conduct justifies discipline.

(3) The Clear Pine Mouldings test will apply at the picket-line. Under Clear Pine Mouldings, the NLRB considers whether, under all of the circumstances, non-strikers reasonably would have been coerced or intimidated by an employee’s abusive picket-line conduct.

In its decision, the NLRB explains that abusive “conduct occurring during the course of protected activity must be evaluated as part of that activity—not as if it occurred separately from it and in the ordinary workplace context.” The NLRB emphasized that “disputes over wages, hours, and working conditions are among the disputes most likely to engender ill feelings and strong responses” and therefore, an employee’s abusive conduct towards management, or their fellow employees, may be justified as an exercise of their Section 7 rights. The NLRB went so far as to state that epithets which “are erroneous and defame one of the parties to [a labor] dispute” are “not so indefensible to remove them from the protection of” the NLRA.

Click to access a PDF of this E-Alert.

Lion Elastomers LLC II is another example of why employers need to stay up to date on the continued developments from the NLRB. For questions related to compliance with the NLRA, contact Nicole Elgin at 503-276-2109 or nelgin@barran.com.

5/2/23: May 31: Deadline to Apply for An Equivalent Plan & Avoid DOI Cancellation

May 2, 2023

By Iris Tilley

Beginning on September 3, eligible individuals may take paid time off for qualifying reasons under Paid Leave Oregon. For purposes of administering Paid Leave Oregon, employers may choose to (1) participate in the state’s program, or (2) submit an application to the Oregon Employment Department (“OED”) for either an employer-administered or a fully insured equivalent plan.

Employers may apply for an equivalent plan at any time. However, to be effective when Paid Leave Oregon benefits begin in September, employers must submit their equivalent plan application to the OED by May 31, 2023. To be approved, an employer’s proposed equivalent plan must meet specific minimum requirements, including but not limited to offering benefits to eligible employees that are equal to or greater than the weekly benefits and duration of leave that eligible employees would qualify for under the state’s program.

This upcoming deadline also applies to employers that have filed a Declaration of Intent (DOI). If an employer that filed a DOI fails to ensure that their equivalent plan application is received by the OED by May 31, the relevant DOI will be deemed canceled, and the employer will be required to pay and remit immediately to the OED all unpaid contributions, and will be subject to penalties and interest. 

For assistance drafting and submitting your employer-administered equivalent plan or assistance submitting your insured equivalent plan, contact Iris Tilley at (503) 276-2155 or itilley@barran.com.

4/19/23: New Oregon Minimum Wage Rates Announced

April 19, 2023

By Nicole Elgin & Becky Zuschlag

On April 14, 2023, BOLI announced Oregon’s new minimum wage rates based on a 5% CPI increase from March 2022 through March 2023. The annual automatic increases to Oregon’s minimum wage are effective each July 1, and employers should take the time now to ensure their wage rates are consistent with the new minimum wage rates.

New Minimum Wage Rates

These are the new minimum wage rates for each region effective July 1, 2023:

• Portland metro area within the urban growth boundary: $15.45 per hour

• Standard minimum wage: $14.20 per hour

• Non-urban Oregon: $13.20 per hour

The “standard minimum wage” applies to Benton, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook, Wasco, and Yamhill counties as well as parts of Clackamas, Multnomah, and Washington counties outside the urban growth boundary.

Oregon’s non-urban minimum wage rate applies in Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler counties.

To determine if an employee is working within the urban growth boundary, refer to this map maintained by Metro.

Compliance Reminders

As a reminder, the applicable minimum wage rate generally depends upon where the employees perform their work. Employers are required to display an updated minimum wage poster in a conspicuous place. BOLI will make free, updated posters available for download on their website by June 1.

Click to access a PDF of this E-Alert.

 For questions on wage and hour law, contact Nicole Elgin at 503-276-2109 or nelgin@barran.com.

4/5/23: Updated “Summary of Rights” Notice Required for Employers Conducting Background Checks

April 5, 2023

By Amy Angel & Wilson Jarrell

Employers who conduct background checks on employees or applicants take note: the Consumer Financial Protection Bureau (the “CFPB”) has released an updated version of the required “Summary of Your Rights” notice that must be provided to subjects of employment background checks. The updated versions of “Summary of Your Rights Under the Fair Credit Reporting Act” can be found here.

As organizations that routinely conduct background checks know, the federal Fair Credit Reporting Act (the “FCRA”) contains a number of strict requirements for employers obtaining and using background checks on applicants and employees. Importantly, the FCRA requires that prior to obtaining a “consumer report” (broadly defined and interpreted to include all of the criminal background, employment, and personal reference checks that an outside investigation agency provides to an employer), the subject of the report must be provided a “clear and conspicuous” disclosure that a report may be obtained for employment purposes, and this disclosure must be in a document that consists solely of this disclosure. (Importantly, the document cannot contain any form of waiver of liability or rights.) Additionally, the subject of the report must authorize in writing the procurement of the report.

Additionally, the FCRA requires that both a copy of the report and a specific notice published by the CFPB be provided to applicants and employees prior to taking an adverse action against an employee based in whole or in part on the results of the report.

The CFPB has updated its required notice, titled “Summary of Your Rights Under the Fair Credit Reporting Act.” Although no substantive changes were made (the CFPB largely updated contact information and made corrections to formatting), the updated document must be used for all required disclosures moving forward. There is a lengthy grace period for compliance, with the agency stating that enforcement for the use of the updated disclosure will not begin until March 20, 2024, but employers should transition to the updated form as soon as possible to avoid an accidental violation.

It is important to remember that in many states, including Oregon, there are other limitations on an employer’s ability to obtain or use some of the information that falls under the purview of the FCRA. For example, in Oregon, employers may not use or obtain credit history information of an applicant or employee, unless the employer is a bank or credit union, hiring certain public safety officers, are required by law to consider credit history, or otherwise is hiring for a position where credit history is “substantially job-related.” Similarly, employers in Oregon may not conduct a criminal background check or require an applicant to disclose a criminal conviction prior to an initial interview, or  prior to making a conditional job offer, if no interview is conducted or the employer is located in Portland and has six or more employees.

Click to access a PDF of this E-Alert.

For questions on background checks or for any other employment-related inquiries, contact Amy Angel at 503-276-2195 or aangel@barran.com, or Wilson Jarrell at 503-276-2181 or wjarrell@barran.com.

4/3/23: Oregon OSHA Rescinds COVID-19 Rules Addressing Exceptional Risk Workplaces & Employer-Provided Housing

April 3, 2023

By Nicole Elgin

Last week, Oregon OSHA issued a Workplace Advisory Memo, stating that it plans to rescind its rules governing COVID-19 Workplace Requirements for All Workplaces and Requirements for Employer-Provided Housing. To accomplish this rescission, Oregon OSHA has implemented a temporary rule that takes effect April 3, 2023, suspending the requirements of both rules, until they can be permanently rescinded.

While Oregon OSHA has incrementally removed many requirements related to COVID-19 for general workplaces and employer-provided housing, until April 3, certain requirements were still in effect for exceptional risk workplaces such as healthcare settings. This rule change means, among other things, that employees in healthcare settings are no longer required under Oregon OSHA’s COVID-19 rules to wear a facial covering. Employers that choose to still require employees to wear facial coverings in the workplace must provide those facial coverings at no cost to employees. In addition, Oregon OSHA intends to adopt a rule that will expressly allow employees to wear a facial covering if they so choose, unless doing so would create, or otherwise expose the employee to, a hazard.

Notwithstanding these rule changes, employers must continue to provide a safe and healthful workplace that is free from serious recognized hazards. Additionally, as we have seen over the past three years, COVID-19 rules and policies may continue to evolve. For these reasons, employers are encouraged to continue to closely monitor public health guidance and consult with counsel to ensure they are compliant with the latest guidance and developments in the law.

For questions on compliance with COVID-19-related policy updates, decision-making, or advice, contact Nicole Elgin at (503) 276-2109 or nelgin@barran.com.

3/29/23: NLRB General Counsel Issues Guidance Memorandum on Severance Agreements

March 29, 2023

The National Labor Relations Board (NLRB) Office of the General Counsel (GC) recently issued a memorandum providing guidance on how it is interpreting the Board’s recent opinion in McLaren Macomb. Check out our previous E-Alert on the McLaren Macomb decision here. The GC’s Memorandum does not carry the force of law, but it is important for employers to be aware of how the GC’s office intends to prosecute cases in light of the recent NLRB decision. In McLaren Macomb, the NLRB ruled that non-disclosure and non-disparagement provisions in agreements with employees will be unlawful if they restrain an employee’s exercise of their National Labor Relations Act (NLRA) Section 7 rights. The NLRB emphasized that employers offering such unlawful terms to an employee would be an unfair labor practice, and entering into an agreement with unlawful provisions would be a separate unfair labor practice.

Most importantly, the GC believes that McLaren Macomb has retroactive effect, meaning that it renders agreements entered into prior to the decision unlawful. Furthermore, the GC’s position is that an employee being bound by an agreement containing such unlawful provisions is a continuing violation and will not be barred by the usual six-month statute of limitations for unfair labor practice charges. The memorandum even suggests that employers may be required to notify former employees who signed severance agreements containing unlawful provisions.

The GC indicates that provisions imposing a duty of confidentiality for trade secrets or proprietary information should be lawful; however other restrictions of an employee’s right to disclose the terms and conditions of their employment remain unlawful. The memorandum reiterates the McLaren Macomb decision’s warning that non-disparagement provisions should not limit employee speech unless it is maliciously or recklessly defamatory.

The GC notes its opinion that a disclaimer in an agreement will not necessarily render overbroad provisions lawful. Overbroad provisions, even with a disclaimer that clearly spells out that Section 7 rights are not being restricted, could still have a chilling effect that compels an employee not to exercise such rights. Therefore, the GC views them as unlawful.

The memorandum clarifies that agreements containing unlawful provisions are not entirely void; rather, only the unlawful provisions will be void. The GC’s memorandum provides the caveat that other circumstances may justify completely voiding an entire agreement.

While supervisors cannot be bound by terms that would prevent them from cooperating in NLRB investigations or proceedings, they may be bound by broader confidentiality and non-disparagement restrictions than employees.

Many Oregon and Washington employers are wary of testing the limits of non-disparagement and confidentiality, given that they are already limited in their ability to utilize such provisions in severance and settlement agreements.  As such, employers should ensure their agreements with employees are drafted in consideration of the most up-to-date guidance available.

For questions regarding severance agreements or compliance with the NLRA, contact the Barran Liebman team at 503-228-0500. 

3/22/23: Washington’s L&I Issues New Guidance on Tips, Gratuities & Service Charges

March 22, 2023

The Washington State Department of Labor & Industries (L&I) recently released a draft administrative policy providing guidance to employers on how to comply with the Minimum Wage Act’s requirements for tips, gratuities, and service charges. The policy is subject to public comment and Washington employers are encouraged to submit comments to the agency through April 15, 2023.

Tips & Gratuities

The draft policy explains that tips and gratuities are “amounts freely given by a customer to an employee.” Tips and gratuities must be paid in full to employees, and employers may not count tips towards an employee’s hourly minimum wage. L&I provided examples of various practices that violate the Minimum Wage Act.

One example in the draft policy involves a group of temporary employees from a staffing agency who are hired to work alongside permanent employees at a concert venue. Under this example, the venue employer and staffing agency are considered “joint employers.” All employees were required to contribute all of their tips to a tip pool, but only the permanent employees were paid out from the tip pool. L&I found that this type of arrangement violates RCW 49.46.020(3) and that similarly-situated employees serving customers in the same way are expected to be subject to the same tip pooling. L&I further advises that all employers in a joint employer circumstance will be held responsible individually and jointly for compliance with the Minimum Wage Act.

Another example of a hazardous tipping practice under the Minimum Wage Act is managers collecting a share of a tip pool. L&I’s example involves employees of a café that employs servers, kitchen staff, and a manager. The manager waits tables and serves customers, but meets the definition of an “executive” employee. In this example, the employer is in violation of RCW 49.46.020 because the manager is ineligible to collect from the tip pool.

L&I provides another example of an employee bartender who receives tips. When the register is short because a customer did not pay their bill, the employer deducts the unpaid bill from the employee’s tips. This payment scheme violates the Minimum Wage Act, which prohibits employers from deducting cash register shortages or other business expenses from tips, gratuities, or service charges earned by employees.

Service Charges

Service charges are automatic charges added to a customer’s bill for services related to food, beverages, entertainment, or porterage. Mandatory gratuity automatically added to a bill at a restaurant for service of a party exceeding a set number of customers is an example of a service charge. Employers must pay employees all service charges, unless they provide a disclosure meeting the standards set out under RCW 49.46.160, which would allow the employer to keep clearly-disclosed portions of the service charge. As with tips, service charges cannot be counted towards an employee’s minimum wage.

One example provided by L&I emphasizes the importance of assessing wage practices under municipal laws in addition to the Minimum Wage Act. A porter is employed by a hotel in Seattle. Seattle has imposed a minimum wage exceeding the State’s minimum. The hotel imposes a service charge for each guest, disclosing that the charge is paid entirely to employees. The hotel counts the services charges paid to the porter towards his minimum wage. This is lawful, because the Seattle ordinance specifically allows businesses to credit service charges towards its minimum wage. Because the employer was paying a base wage in excess of the State’s minimum wage, while crediting its service charge payments towards the Seattle minimum wage as allowed by the ordinance, the payment policy was in compliance.

L&I’s guidance is a good reminder for employers to make sure they are in compliance with all applicable wage laws. For questions on compliance with wage laws and policies on tips, gratuities, and service charges, contact the Barran Liebman team at 503-228-0500.

3/20/23: HB 3205 Seeks to Exempt Hiring & Retention Bonuses from Oregon Pay Equity Requirements

March 20, 2023

By Natalie Pattison & Becky Zuschlag

On March 13, 2023, the Oregon Legislature’s Business and Labor Committee held a public hearing to consider HB 3205, which would modify the definition of “compensation” for purposes of pay equity requirements, to exclude hiring bonuses and retention bonuses.

Currently, the definition of “compensation” under Oregon’s Equal Pay Act includes wages, salary, bonuses, benefits, fringe benefits, and equity-based compensation.  This means an employer may only offer hiring or retention bonuses in two situations: if all employees performing work of comparable character receive the same bonus, or if the reason for the pay difference is based on one of the bona fide factors provided in the law.

HB 3205 aims to exempt hiring bonuses offered to prospective employees and retention bonuses offered to existing employee from pay equity considerations. This bill mirrors the Oregon legislature’s move during the pandemic to temporarily exempt hiring and retention bonuses from Oregon’s Equal Pay Act—allowing businesses the ability to pay these bonuses to address pandemic-related workforce challenges. That temporary exemption was in place until September 28, 2022. HB 3205 seeks to make that temporary exemption permanent.

If passed, HB 3205 will provide Oregon employers with greater flexibility in employment decisions and important tools to support ongoing efforts by employers to recruit, hire, and retain workers.

Oregon employers should stay on the lookout for important updates on this bill and reach out to counsel with any questions about the bill or compliance with Oregon’s Equal Pay Act.

Click to access a PDF of this E-Alert.

For any questions, contact Natalie Pattison at 503-276-2104 or npattison@barran.com.

3/17/23: Paid Leave Oregon: Are You Ready for Q2?

March 17, 2023

By Amy Angel

Certain Paid Leave Oregon requirements became effective on January 1, 2023, such as contribution and model notice requirements. With the end of Q1 fast approaching, we want to make sure employers of all sizes are on the right track. Below are upcoming deadlines to keep in mind as you continue to prepare for Paid Leave Oregon benefits to begin on September 3:

March 31, 2023: Deadline to Remedy Failure to Deduct Employee Contributions in Q1

Paid Leave Oregon is funded through employee and employer contributions. Unless an employer has applied for an Equivalent Plan, submitted a Declaration of Intent, or elected to pay the employee portion of the contribution requirement, employers of all sizes must be withholding contributions from their Oregon employees’ pay. Employers who fail to properly withhold the employee portion of the contribution are liable to pay those amounts unless they correct that failure within the same quarter.

May 31, 2023: Deadline to Apply for an Equivalent Plan that is Effective September 3, 2023

Employers that intend to apply for an Equivalent Plan that is effective when benefits under Paid Leave Oregon begin on September 3 must do so by May 31, 2023. This deadline also applies to employers that have alternatively opted to file a Declaration of Intent (DOI). Employers that have filed a DOI, but that fail to ensure the OED receives their Equivalent Plan application by May 31, will be liable for the sum of all unpaid employer and employee contributions due, as well as penalties and interest.

July 5, 2023: Deadline to Modify OFLA & FMLA Leave Years

Under Paid Leave Oregon, the benefit year is forward-looking. To the extent an employer’s current OFLA or FMLA leave policy uses a backward-looking benefit year, protected leave may not run concurrently when it otherwise could. To change the leave year under OFLA or FMLA, the employer must give employees 60 days’ notice. In anticipation of Paid Leave Oregon benefits beginning on September 3, 2023, employers should review whether they want to make a change to their OFLA or FMLA leave year and provide that notice to all employees by July 5, 2023.

For questions on compliance with Paid Leave Oregon-related policy updates, decision-making, or advice, contact Amy Angel at (503) 276-2195 or aangel@barran.com.

3/2/23: Supreme Court Weighs in on Salary Basis Requirement for Exempt Employees

March 2, 2023

By Missy Oakley

On February 22, 2023, the United States Supreme Court found that an employee who earned more than $200,000 a year was entitled to recover overtime pay under the Fair Labor Standards Act (FLSA). In Helix Energy Solutions Group, Inc. v. Hewitt, the Supreme Court examined whether the employer had properly classified the employee as exempt.

Facts of the Case

The employee in this case worked on an offshore oil rig for Helix Energy Solutions Group for 28 days on, followed by 28 days off. When he was on the rig, he typically worked 12 hours a day, 7 days a week, roughly 84 hours a week.

The employee was paid on a daily-rate basis every two weeks. His daily rate changed over time during his employment, but ranged between $963 to $1,341 per day. His pay was calculated by multiplying his daily rate by the number of days he worked in the pay period. Under this compensation scheme, the employee earned more than $200,000 a year. The employer classified him as “exempt” under the executive exemption test, so the employer did not pay him any overtime.

“Salary Basis” Test

To qualify for the executive exemption, which is one of the three commonly referred to “white collar” exemptions under the FLSA, an employee must satisfy three separate tests: (1) “salary basis” test, (2) “salary level” test, and (3) “duties” test. If even one test is not met, the employee does not qualify for the exemption. The employee argued he was entitled to overtime because his compensation structure did not meet the salary basis test.

An employee is considered to be paid on a “salary basis” under § 602(a) of the FLSA “if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.” Section 602(a) also states that “an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.”

Takeaways for Employers

The Supreme Court ultimately agreed with the employee, finding that the employer failed to pay him as required by the salary basis test under § 602(a). Accordingly, he did not qualify as an exempt employee and was entitled to overtime pay. The Court reasoned that even though the employee was paid on a bi-weekly basis, his pay was calculated using the number of days actually worked—meaning his pay was calculated with regard to the number of days he worked—in direct conflict with the rule.

Employers can have daily-rate workers satisfy the salary basis test and qualify for an exemption from overtime. Under § 604(b) of the FLSA, “if the employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a reasonable relationship exists between the guaranteed amount and the amount actually earned,” the employee meets the salary basis test. In this case, the employer admitted it did not meet the requirements in § 604(b), so it was not applicable.

The Court also discussed whether the employee could have been exempt under the FLSA’s “highly compensated employee” exemption, however, the Court found that exemption is still subject to the salary basis test.

This case is a great reminder that employers should make sure they are familiar with the salary basis requirements for their exempt employees.

Click to access a PDF of this E-Alert.

For questions about FLSA compliance, contact Missy Oakley at 503-276-2122 or moakley@barran.com.

2/23/23: NLRB Further Restricts Non-Disclosure & Non-Disparagement Provisions in Severance Agreements

February 23, 2023

By Nicole Elgin

Private sector employers will want to ensure that their severance agreements are in compliance with the National Labor Relations Board’s latest precedential decision. On February 21, 2023, the Board issued an opinion in McLaren Macomb, affecting releases of employees’ Section 7 rights under the National Labor Relations Act (NLRA). In this decision, the Board held that because the non-disparagement and confidentiality provisions in the employer’s release were unlawful, the employer offering the severance agreement to permanently furloughed employees was also unlawful.

The severance agreement language that the employer presented to 11 permanently furloughed employees in McLaren Macomb expressly restricted the employees from disclosing the terms of the agreement and other confidential information to third-parties. The agreements further required employees “not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer[.]” The agreement provided that the employer would be able to enforce those provisions with injunctive relief and seek substantial monetary damages against an employee in breach.

Importantly, the employer did not notify the employees’ union that it was furloughing the 11 employees nor that it was offering them a severance agreement, meaning the union had no opportunity to bargain and that the employer was in violation of clear direct dealing principles. The Board indicated that “agreements … that restrict employees from engaging in activity protected by the Act, or from filing unfair labor practices charges with the Board, assisting other employees in doing so, or assisting the Board's investigative process, have been consistently deemed unlawful.”

In its opinion, the Board made it clear that the risk of unfair labor practice charges is twofold with employee severance packages. Entering into a severance agreement with an employee that unlawfully restricts an employee’s NLRA Section 7 rights is one type of unfair labor practice. Additionally, the act of offering employees to enter into an agreement containing such unlawful provisions is itself another unfair labor practice.

The McLaren Macomb opinion comes amidst a nationwide trend to limit employers’ ability to enter into confidentiality and non-disparagement agreements with current and former employees. Importantly, the NLRA’s protections for employee conduct are not limited to unionized employees and apply to all “employees” as defined under the NLRA. Employers interested in entering into severance agreements containing limitations on employee disclosures or disparagement should ensure that the terms they are offering comply with the restrictions imposed by the recent wave of laws limiting non-disparagement and confidentiality agreements.

Click to access a PDF of this E-Alert.

For questions on compliance with the rules governing severance agreements and other limitations on employee disclosures, contact Nicole Elgin at 503-276-2109 or nelgin@barran.com.

2/16/23: The End of the Round-Up? Oregon Federal Court Takes Issue with Employer Rounding Practices

February 16, 2023

By Sean Ray

Fear not—despite the clickbait title, the rodeo is safe. However, the practice of employers rounding employees’ work time to calculate pay may not be. Rounding has been used as a timekeeping method for years and was designed to make calculating employees’ time more practical in the days before everyone had a super-computer in their pocket. Rounding typically works in the following way, sometimes referred to as the “7-Minute Rule”: minutes 0-7 are rounded to 0 minutes, minutes 8-22 to 15 minutes, minutes 23-37 to 30 minutes, minutes 38-52 to 45 minutes, and minutes 53-60 to 60 minutes. The conventional wisdom is that neither the employee nor employer are disadvantaged because the pay balances in the end. For example, an employee may be underpaid when time is rounded down, but will be overpaid when time is rounded up, which, in theory, should even out at the end of the pay period.

This method of rounding employees’ work time is explicitly allowed under federal law, and some states allow it as well, such as our neighbors to the north up in Washington, so long as the rounding does not disadvantage employees overtime (that is, the rounding up and down must effectively even out). However, Oregon law is silent with respect to rounding employees’ time. Recall that employers must follow the law most favorable to the employee, so if federal law allows rounding but state law does not, then employers cannot round employees’ time for payroll purposes and must pay employees for every minute worked.

A recent federal case, Eisele v. Home Depot U.S.A., Inc., held that rounding is prohibited in Oregon and helped shed light on when an employer’s failure to pay an employee’s earned wages is considered “willful.” In the case, Home Depot used a time-keeping software system to log and keep track of employees’ time worked, and then rounded the time to the nearest 15-minute increment when paying out wages. In August of 2020, the plaintiff filed a class action complaint against Home Depot alleging that this rounding practice resulted in a violation of ORS 652.120 and 652.140, which both require that employers pay employees all wages earned and due.

The federal judge ruled that, although Oregon statutes are silent with respect to rounding (they neither allow nor prohibit it explicitly), the Oregon statutes require payment of wages for “all hours worked,” which is in direct conflict with rounding principles (since sometimes employees would not be paid for all hours worked when time was rounded down), particularly where, as was the case in this matter, the employer tracked every single minute worked prior to the rounding.

Nonetheless, Home Depot was able to escape liability for penalties associated with willfully failing to pay wages due to the law being sufficiently uncertain in this area, as well as the employer’s reasonable belief that its action was permissible. There were several factors that helped the judge conclude that the law was sufficiently uncertain, including previous litigation in California, the explicit allowance of the practice under federal law, and previous guidance by the Bureau of Oregon Labor & Industries (“BOLI”) that condoned rounding. However, now that there is a federal court case here in Oregon holding that rounding is not permitted, it may be harder for employers to avoid willfulness penalties in future actions.

In light of this decision, Oregon employers who currently use rounding should rethink their timekeeping and pay practices to ensure compliance with this result and other Oregon employment laws.

Click to access a PDF of this E-Alert.

For questions on compliance with these rules or if you would like assistance in reviewing your timekeeping and pay practices, contact Sean Ray at 503-276-2135 or sray@barran.com

2/14/23: The U.S. Department of Labor Issues Guidance on Telework, FMLA & FLSA Compliance

February 14, 2023

On February 9, 2023, the United States Department of Labor, Wage and Hour Division (“DOL”) published an opinion letter and a field assistance bulletin concerning the Fair Labor Standards Act (“FLSA”) and the Family and Medical Leave Act (“FMLA”).

The DOL opinion letter clarifies that an eligible employee with a serious health condition requiring limited work hours may use FMLA leave to work a reduced number of hours per day. Under the FMLA, employees may take up to 12 workweeks of leave in a 12-month period. Employees taking intermittent or reduced-schedule leave may use their FMLA leave in the smallest increment of time the employer allows for other forms of leave, provided that the increment is no longer than one hour. If the employee never exhausts their FMLA leave, they may work a reduced schedule indefinitely.

The DOL field assistance bulletin advises employers in (1) ensuring workers who telework are paid properly under the FLSA,  (2) applying protections for reasonable break time for nursing employees to express milk while teleworking, and (3) applying FMLA eligibility rules to employees who telework.

The bulletin emphasizes that “short breaks” of twenty minutes or fewer must be counted as compensable hours worked, even when employees are teleworking. By contrast, meal breaks (typically 30 minutes or more) are not counted as compensable hours worked when the employee is completely relieved from duty, meaning the employee is told in advance that they may leave the job and will not have to commence work until a specified time. An employee may also be relieved from duty if the employer permits the employee to choose the time at which they resume working and the break is long enough for the employee to effectively use it for their own purposes.

Additionally, employees working from home or another location must still be provided a place to pump breast milk that is not a bathroom, that is shielded from view, and is free from intrusion by coworkers and the public. The employee must be free from observation from a computer camera, security camera, or web conferencing platform while expressing breast milk, regardless of the location they are working from.

Last, to be eligible for FMLA leave, an employee must be employed at a worksite where 50 or more employees are employed by the employer within 75 miles of that worksite. For FMLA eligibility purposes, their worksite is the office to which they report or from which their assignments are made.   

The DOL opinion letter and field assistance bulletin are important reminders to employers and provide several examples of how these rules apply to various employee scenarios. Given the recent rollout of paid family leave in Oregon, in addition to these pointers from the DOL, now is a great time to review your policies for legal compliance.

Click to access a PDF of this E-Alert.

For questions about FMLA and FLSA compliance, contact the Barran Liebman team at 503-228-0500.

1/26/23: EEOC Releases Updated Guidance on ADA Compliance for Individuals with Hearing Impairments

January 26, 2023

The Equal Employment Opportunity Commission provided an updated resource to explain its position on how employers should comply with the Americans with Disabilities Act’s (“ADA”) requirements as they apply to hearing-impaired employees and job applicants. This E-Alert will summarize the key information from the EEOC’s guidance.

The ADA protects individuals who: (1) have a physical or mental impairment that substantially limits one or more major life activity; (2) have a history of a substantially limiting impairment; or (3) are regarded as having a substantially limiting impairment. Importantly, whether an individual is disabled must be determined without considering the effects of any mitigating measures the individual uses, such as a hearing aid. If an individual can show that they are substantially limited in hearing (or another major life activity), or that they have a history of such limitations or are regarded as having such limitations, then the individual is entitled to the protections under the ADA. For example, individuals who have had corrective surgery that largely repaired a hearing impairment may still qualify as disabled because of their history of such limitations.

The guidance addresses the limitations the ADA imposes on employers related to questioning job applicants and employees regarding hearing conditions. The ADA has different rules for questions and exams in the pre-offer, post-offer, and post-acceptance stages. Employers may not question whether a job applicant has or had a hearing condition or treatment related to a hearing condition prior to making a job offer. Applicants are not required to disclose disabilities before accepting a job offer unless they will need reasonable accommodation for the application process itself.

What if an applicant has an obvious hearing impairment or discloses a non-obvious condition? Employers generally cannot ask applicants about obvious impairments, but if the employer has a reasonable belief that the applicant requires accommodation to complete the application process or perform the job, it may ask whether the applicant will need accommodations and what type.

After an offer is made, employers may ask questions regarding an applicant’s health; however, it is important to make inquiries uniformly rather than targeting specific applicants with such questions. Individuals may be asked for specific information if the request is related to previously obtained medical information. If an applicant discloses a hearing condition after receiving a job offer, an employer may ask the applicant questions aimed at assessing the severity of the hearing impairment and how it may affect the applicant’s ability to carry out the job duties. An offer cannot be withdrawn unless the individual is unable to perform the essential functions of a job without reasonable accommodations and without posing a direct threat to the health and safety of the applicant or others.

The EEOC guidance delves into numerous other issues that employers need to be aware of, such as how to respond when an employer suspects an employee’s performance may be suffering because of a hearing impairment, what types of reasonable accommodations hearing-impaired employees may need, and how employers should handle safety concerns due to hearing disabilities.

If you have questions regarding ADA compliance, contact the Barran Liebman team at 503-228-0500.

1/6/23: FTC Proposes Ban on Non-Competes

January 6, 2023

By Natalie Pattison & Andrew Schpak

Non-compete agreements between employers and employees may soon be a thing of the past. The Federal Trade Commission (FTC) issued a sweeping proposal that would ban almost all non-compete agreements with limited exceptions. If the rule goes into effect, it will have major implications for employers and workers.

The FTC’s proposed rule would prohibit employers from entering into or attempting to enter into a non-compete clause with a worker; maintaining a non-compete clause; or representing that a worker is subject to a non-compete clause absent a good faith basis to believe the worker is subject to an enforceable non-compete clause. The rule will require employers to rescind all existing non-compete provisions with current and former workers and provide notice to the worker that the non-compete provision has been rescinded.

Notably, the proposed rule would also ban any contractual term that is a de facto non-compete clause, such as a broad non-disclosure agreement that effectively precludes a worker from working in the same field after the end of their employment. Non-solicitation clauses seem to be in the clear, so long as they are not written so broadly as to be deemed a de facto non-compete clause.

Oregon already imposes significant restrictions on non-competes, including their use among lower-paid employees, but the FTC’s proposed rule would preempt state law and extend to all workers, whether paid or unpaid, regardless of the income level.

The rule does not take effect immediately and legal challenges are likely. There will be a 60-day comment period on the proposed rule and the new rule would go into effect 180 days after the final rule is published. In the meantime, employers with existing non-competes should be aware of the potential impact of the proposed rule and consult with employment counsel regarding how to incorporate potential alternatives, such as non-solicitation and confidentiality agreements, in order to ensure that trade secrets and client relationships are protected should this proposal become the law of the land. 

Click to access a PDF of this E-Alert.

For any questions related to non-compete agreements, contact Natalie Pattison at 503-276-2104 or npattison@barran.com, or Andrew Schpak at 503-276-2156 or aschpak@barran.com.

1/5/23: New Laws Provide More Federal Protections for Pregnant & Nursing Employees

January 5, 2023

On December 29, 2022, President Biden signed two pieces of legislation that expand protections for pregnant and nursing workers: the Pregnant Workers Fairness Act and the PUMP for Nursing Mothers Act.

Pregnant Workers Fairness Act (“PWFA”)

Employers with 15 or more employees must make reasonable accommodations for employees affected by pregnancy, childbirth, or related medical conditions absent an undue hardship.

Employer Prohibitions Under the Act:

• Denying employment opportunities to employees based on their need for reasonable accommodation described above.

• Forcing an employee to accept an accommodation other than the reasonable one arrived at and agreed to through the interactive process.

• Requiring that a qualifying employee take paid or unpaid leave if another reasonable accommodation can be provided.

• Taking adverse actions against a qualified employee requesting or using reasonable accommodations related to the terms, conditions, or privileges of employment.

The PWFA becomes effective on June 27, 2023.

PUMP for Nursing Mothers Act

Since 2010, the Affordable Care Act (ACA) has required that employers with 50 or more employees provide a nursing mother reasonable break time and location to express breast milk after the birth of a child for up to one year after childbirth. The location must not be a bathroom and must be shielded from view and free from employee and public intrusion. The PUMP for Nursing Mothers Act expands on the ACA requirements with additional protections for employees who need to express breast milk. These protections went into effect on December 29, 2022.

Additional Requirements:

• Salaried and other workers not covered by the ACA are now covered.

• Time spent to express breast milk must be considered hours worked if the employee is also working.

• Employees must first notify the employer that they are not in compliance and provide them with 10 days to come into compliance before making a claim of liability.

The U.S. Department of Labor Wage and Hour Division and the Equal Employment Opportunity Commission (EEOC) are expected to release additional guidance to assist employers in complying with these new laws in the coming months. Employers should review handbooks and pregnancy accommodation policies, and train supervisors, managers, and HR staff about how to implement these policies.

Remember that many states have their own robust protections. For details about Oregon’s Pregnancy Accommodation laws, check out our past E-Alert.

Click to access a PDF of this E-Alert.

For questions on compliance with these rules or other employee accommodation matters, contact the Barran Liebman team at 503-228-0500.