In a prior blog post, we used the Star Wars Universe as the backdrop for a discussion about obtaining a preliminary injunction in the context of a noncompete agreement.  But we left a discussion of the inevitable disclosure doctrine for another day.  Today is that day. By way of background, the inevitable disclosure doctrine typically plays out as follows.  A key employee of a company who possesses all manner of company secrets leaves for a competitor without a trail, digital or otherwise, of actually taking records with him or her to the competitor.  Nonetheless, even in the absence of physical copying, the company’s secrets are still in the employee’s head.  In the words of the Seventh Circuit Court of Appeals in the case of PepsiCo, Inc. v. Redmond, this leaves the company in the predicament of a "coach, one of whose players has left, playbook in hand, to join the opposing team before the big game." Common experience tells us that, even assuming good faith, the former employee simply cannot help using confidential information to lure away his/her former employer’s customers or otherwise help the new employer gain a competitive advantage.  For example, if the employee knows the confidential pricing for a specific customer, how would he/she not use that information in a sales pitch for the new employer?  Indeed, that would likely be a primary reason for the competitor’s recruitment of the employee in the first instance. As is often the case, however, gut feel of misuse or misappropriation of a trade secret is not necessarily accompanied by direct proof of it.  Even when there is proof, using it may not be so easy.  For example, when a loyal customer reports an improper solicitation by the former employee, do we really want to drag that customer in to testify in a hearing on a preliminary injunction? This all begs the question:  How can the company convince a judge to issue a temporary restraining order and preliminary injunction barring the employee’s use of confidential information without proof of the employee’s misconduct?  Enter the inevitable disclosure doctrine. The inevitable disclosure doctrine, at its core, is a rule of pragmatics.  It recognizes the practical reality that once employees have knowledge of a company’s confidential business information, it is impossible to compartmentalize that knowledge and avoid using it when they go to work for their new employer in the same industry. The doctrine in New York has roots going back to 1919, in the case of Eastman Kodak Co. v. Powers Film Products, Inc.  In the 1990s, the doctrine hit its peak in two contexts.  First, in Lumex, Inc. v. Highsmith, the U.S. District Court for the Eastern District of New York held that when the departing employee had signed a noncompete agreement, the doctrine supplied the missing element of actual proof of use of trade secrets on a motion for a preliminary injunction even when the departing employee acted with the utmost good faith.  Second, in DoubleClick Inc. v. Henderson, the New York State Supreme Court in New York County held that, even in the absence of a noncompete agreement, when the departing employee left with physical or electronic files, the inevitability of use of the trade secrets in such a circumstance springs from the already proven misconduct of the employee. The decisions in Lumex and DoubleClick seemed to usher in a more welcoming attitude towards the doctrine.  But that was somewhat short-lived.  The doctrine receded from its high water mark when employers attempted to broadly use it as a substitute for a noncompete agreement.  In Earthweb v. Schlack, decided by the U.S. District Court for the Southern District of New York, the employer sought to enjoin its former employee from working for a competitor even though the parties’ agreement contained no such prohibition.  The Court held that in absence of evidence of actual misappropriation of confidential information, it would not essentially draft a noncompete for the parties under the guise of inevitable disclosure.  The Appellate Division, Third Department, reached a similar result in Marietta Corp. v. Fairhurst, where the Court refused to use the inevitable disclosure doctrine in a manner that would convert a nondisclosure agreement into a noncompete agreement. Most recently, on December 30, 2016, the U.S. District Court for the Southern District of New York, in Free Country Ltd. v. Drennen, declined to use the inevitable disclosure doctrine to enjoin the solicitation of customers in the absence of a noncompete agreement. The issue now is whether the inevitable disclosure doctrine has lost its teeth and, if it hasn’t, how can an employer actually use it to stop its trade secrets from being used when it can’t prove misappropriation.  The short answer is that the inevitable disclosure is not dead.  It still has its power when used in its proper context. If a company truly wants to protect itself from competition from former employees who possess its confidential information, there is simply no substitute for a narrowly crafted noncompete agreement.  The inevitable disclosure doctrine can be used quite effectively to enforce such a noncompete agreement on an application for a preliminary injunction. The narrower the scope of the restriction, the more receptive a court will be to enforcing it.  Before drafting a noncompete, there ought to be a careful discussion of what the employer is really worried about in terms of an employee leaving.  More often than not, the concern is about the employee working for a limited group of competitors and/or soliciting a limited group of major customers.  In such circumstances, to increase the likelihood of success of enjoining a former employee, a noncompete agreement should actually list the specific group of competitors where the employee would be prohibited from working in the same or similar capacity and/or a specific list of customers whose solicitation would be prohibited.  The noncompete itself may also have a clause stating that if the employee were to work for one of the listed competitors or attempt to solicit a listed customer it would be inevitable that the employee would use confidential information.  A high level executive, particularly one with access to legal counsel to review and negotiate the agreement, would be hard pressed to later dispute that which he/she expressly acknowledged. Finally, for those high level executives for whom it is absolutely critical that a noncompete be enforceable, the agreement should provide for the payment of compensation during the period of noncompetition.  This was done effectively in Lumex. Employers are well served to use narrowly crafted noncompete agreements for a limited class of employees whose departure could damage the company’s legitimate business interests.  The inevitable disclosure doctrine, for all of its long and winding permutations, can still be a powerful tool -- not a substitute -- for enforcing a noncompete agreement.

On April 21, 2017, the Acting Regional Director of Region Five of the National Labor Relations Board ("NLRB") issued a Decision and Direction of Election holding that Resident Advisors ("RAs") at George Washington University are employees under the National Labor Relations Act ("NLRA") who are entitled to vote in a union representation election.  This decision comes on the heels of the NLRB's recent decision in Columbia University, holding that graduate and undergraduate student assistants are employees who are also entitled to unionize.  This ruling by NLRB Region Five could potentially open the door for unions to organize RAs at other private institutions of higher education. The representation petition at George Washington was filed by Local 500 of the Service Employees International Union ("SEIU").  SEIU sought to represent a bargaining unit of all full-time and regular part-time RAs at George Washington, which consisted of approximately 110 individuals.  As a condition of becoming an RA, an individual must be a full-time undergraduate student enrolled in a degree-granting program, and must have completed his or her first year of studies.  RAs at George Washington are expected to be in good academic and judicial standing.  George Washington argued that RAs should not be considered "employees" under the NLRA for two principal reasons:  (1) its requirement for RAs to be undergraduate students is necessary for the RAs to develop a "peer-to-peer mentoring relationship" with their assigned residents; and (2) RAs are an important part of George Washington's residence life program, which is an extension of its academic program. The Acting Regional Director of NLRB Region Five rejected George Washington's arguments after a hearing on these issues, finding that the RAs have an employment relationship with the University.  The Acting Regional Director determined that RAs perform services for the University, are subject to the University's control, and perform their services in exchange for payment.  The RAs at George Washington receive a stipend of $2,500 for the academic year, less applicable tax withholdings, as well as free on-campus housing valued at $12,665 per year.  The RA position description at George Washington sets forth four main categories of job duties, along with a list of particular expectations for each category of job duties.  The Acting Regional Director also found that RAs are subject to discipline, up to termination, if they fail to comply with George Washington's policies or if they fail to remain in good academic or judicial standing.  One particular piece of evidence that the Acting Regional Director found to be significant was that RAs at George Washington are required to sign a four-page document entitled "Resident Advisor Employment Agreement," which describes the University's "expectations and employment terms" for RAs. According to the Acting Regional Director, the mere fact that being an RA might be part of the educational experience of an undergraduate student at George Washington does not preclude a determination that the relationship is principally an economic relationship.  The Acting Regional Director wrote:  "Employment experiences can simultaneously be educational or part of one's personal development, yet they nonetheless retain an indispensable economic core." A representation election will be scheduled in the coming weeks for the RAs at George Washington to determine if they wish to be represented by SEIU for purposes of collective bargaining.  George Washington has the right to seek review by the NLRB and potentially by a federal appellate court if SEIU wins the election.  At this point, two of the three occupied seats on the NLRB are filled by Democratic appointees who are pro-union.  There are also two vacancies on the NLRB.  When those vacancies are filled by President Trump, it is expected that the NLRB will have its first Republican majority in approximately nine years.  Therefore, this ruling by NLRB Region Five may not be the last word on this important issue for institutions of higher education.

One of underlying themes of the now defunct “O’Reilly Factor” was that the liberal elites have brought about the “wussification” of America.  In Mr. O’Reilly’s world, personal responsibility has given way to excuses and coddling, begging the question:  where is good old fashioned comeuppance when it is needed?  We can answer that question. While Mr. O’Reilly was a lynchpin to Fox News’ highly rated nightly line-up, he was still an employee subject to all of the common law duties and liabilities as everyone else.  As an employee, he owed his employer a duty of loyalty.  Employed in New York, Mr. O’Reilly is subject to “the mother of all” employer remedies, the so-called “faithless servant doctrine.”  Under this doctrine, if Fox News decided to play the very type of hard-ball championed by Mr. O’Reilly, it could -- if it proves the misconduct -- recoup from him every stitch of compensation paid to him during the period of time that he was allegedly sexually harassing Fox employees, every penny owed to him as part of any “parachute,” and punitive damages.  Fox may also be able to recoup from Mr. O’Reilly the investigative costs it recently paid to its outside law firm. In New York, the faithless servant doctrine is more than one hundred years old.  This doctrine, a subspecies of the duty of loyalty and fiduciary duty, requires an employee to forfeit all of the compensation he/she was paid from his/her first disloyal act going forward.  The doctrine has a deliberate harsh deterrent purpose and public policy goals.  Important here, the fact that Mr. O’Reilly brought in millions of dollars of revenue to Fox is irrelevant to a salary forfeiture against him, if the disloyal acts can be proven. The doctrine has been applied in the specific context of sexual harassment.  In Astra USA Inc. v. Bildman, the Massachusetts Supreme Court interpreted and applied New York law, holding that New York’s Faithless Servant Doctrine permitted an employer to recover compensation it had paid to a high level executive who had been the subject of numerous sexual harassment complaints by other employees.  Under Astra, the doctrine can reach misconduct that does not involve theft or financial damages to the employer.  In upholding a $7 million complete forfeiture, the court aptly stated:  “For New York . . . the harshness of the remedy is precisely the point.” The Astra court relied on the New York Appellate Division, Second Department’s decision in William Floyd Union Free School District v. Wright (argued by the author of this article without any “spin” or “pinhead” elocution).  In that case a multi-million dollar forfeiture was obtained by a public school district against two high level employees who had stolen from it.  In language now cited in other cases, the Court held:  “Where, as here, defendants engaged in repeated acts of disloyalty, complete and permanent forfeiture of compensation, deferred or otherwise, is warranted under the Faithless Servant Doctrine.” Despite Astra and William Floyd, disloyal employees have tried to limit the scope of the forfeiture.  On June 2, 2016, the Appellate Division, Third Department added strength and vigor to the faithless servant doctrine in a case where an employee committed repeated acts of theft.  In City of Binghamton v. Whalen (also argued without spin by the author of this article), the Court reaffirmed the strict application of the faithless servant doctrine:  “We decline to relax the faithless servant doctrine so as to limit plaintiff’s forfeiture of all compensation earned by the defendant during the period of time in which he was disloyal.”  The Court specifically noted that the faithless servant doctrine is designed not merely to compensate the employer, but to create a harsh deterrent against disloyalty by employees. Published reports indicate that Mr. O’Reilly is parachuting out of Fox with tens of millions of dollars.  Under the earnest moral convictions and biblical brimstone that were the hallmark of Mr. O’Reilly’s long tenure with Fox, he should forfeit it all back if the allegations of sexual harassment can be proven by Fox.  Mr. O’Reilly famously closed his show with a “word of the day.”  We offer two such words:  “Faithless Servant.”

On April 7, 2017, the New York City Council approved legislation that will ban almost all employers in New York City from (1) asking job applicants about their compensation history and (2) relying on a job applicant’s compensation history when making a job offer or negotiating an employment contract, unless that applicant freely volunteers such information.  Mayor de Blasio has not yet signed the bill, but he is expected to do so; once he does, the new legislation will become effective 180 days from that date.  Job applicants who allege a violation of this provision may file a complaint with the New York City Commission on Human Rights or directly in court. This law will even prohibit employers from conducting searches of publicly available records for the purpose of obtaining an applicant’s salary history.  Employers will be permitted, however, to ask about an applicant’s salary and benefits expectations.  Further, if a job applicant volunteers his or her compensation history, the law will not prohibit employers from verifying and considering such information. The ban will also not apply to:  (1) actions taken pursuant to any law that authorizes the disclosure or verification of salary history; (2) internal transfers or promotions; and (3) public employee positions for which compensation is determined pursuant to procedures established by collective bargaining. New York City is not the first to pass such a law.  In the last 8 months, Massachusetts, Puerto Rico, and Philadelphia have all implemented similar bans on questions about compensation history.  Proponents of these laws argue that the bans will help erase pay inequity and will especially help those who have been historically underpaid.  Opponents argue that such government action constitutes unconstitutional infringement on free speech rights. In any case, New York City employers should put their Human Resources personnel, and any others involved in the hiring process, on notice about the imminent change in law.  All employers, not just those with employees in New York City, should be mindful of the trend of lawmakers seeking to keep compensation history out of the hiring process and should expect this trend to continue.

Late Wednesday, just hours before President Trump’s new travel ban was scheduled to take effect, the U.S. District Court for the District of Hawaii granted a temporary restraining order that prevents the implementation of Executive Order 13780.  Recall, President Trump issued Executive Order 13780, entitled, “Protecting the Nation from Foreign Terrorist Entry into the United States” (“EO 13780”), on March 6, 2017.  The temporary restraining order issued by the U.S. District Court in Hawaii prohibits the federal government from enforcing EO 13780 on a nationwide basis. As you know from our March 7, 2017 blog post, EO 13780 sought to suspend the entry of non-immigrants from Iran, Libya, Somalia, Sudan, Syria and Yemen for an initial 90-day period if they were not physically present in the U.S. on March 16, 2017, did not have a valid visa at 5:00 pm EST on January 27, 2017, and did not have a valid visa on March 16, 2017.  EO 13780 also sought to suspend the entire refugee admission program for 120 days and to cap the admission of refugees to no more than 50,000 for fiscal year 2017.  As a result of the decision of the U.S. District Court in Hawaii on March 15, foreign nationals hailing from any of the restricted countries may continue to travel to the U.S. until further notice. At a rally in Nashville, Tennessee on Wednesday evening, President Trump criticized the ruling issued by the U.S. District Court in Hawaii and further declared that his administration will fight to uphold EO 13780, including the travel ban, all the way to the Supreme Court, if necessary.  Given the fluidity of this situation, we continue to advise that individuals from the restricted countries who are presently in the U.S. forego any unnecessary international travel at this time.

There are few things more confusing to employers than the nitty-gritty rules of what is and is not compensable time for non-exempt employees under the Fair Labor Standards Act (FLSA).  There are also few things more costly to employers than when a mistake is made and a non-exempt employee is not paid for time he/she should have been paid for.  With the continuous onslaught of FLSA lawsuits being filed every day, it is important for employers to be familiar with the rules that affect their obligation to pay non-exempt employees. Here are some answers to common questions that are often asked with regard to the compensability of time non-exempt employees spend traveling in connection with work. 1.  Do employees have to be paid for the time they spend commuting to work? Ordinarily, travel from home to an employee’s regular place of work, or from work to home, does not count as “time worked.”  Once an employee’s work day ends, the time the employee spends traveling from his/her last job site to home is considered ordinary commuting time for which the employee will generally not be owed wages.  If an employee has a regular work site, but he/she is required to report to a different work site on occasion, the time spent traveling from home to the different job site (or from the job site back home at the end of the work day) is also not compensable, as long as the different job site is within the same general locality as where the employee regularly works.  For employees who do not have regular work sites and instead travel to different work sites each day, all home-to-work and work-to-home travel time is generally considered non-compensable commuting time, even if the distances traveled are long and the time spent commuting is substantial. 2.  What if the employee uses a company car -- do you have to pay for the employee’s commuting time then? Generally, no.  An employee’s home-to-work and work-to-home travel in a company-owned vehicle is not generally considered to be hours worked, as long as:  (1) it is a vehicle of a type normally used for commuting; (2) the employee is able to use his/her normal route for the commute; (3) the employee does not incur any additional costs using the company vehicle; (4) the home-to-work and work-to-home travel is within the company’s normal commuting area; and (5) the use of the vehicle is subject to an agreement between the company and the employee. 3.  Do you have to pay an employee for travel during the work day? Once an employee arrives at his/her regular work site and begins work for the day, the employee’s travel during the course of the work day is compensable.  For example, the time the employee spends traveling between two work sites will count as “time worked,” just as will the time an employee spends traveling between other places for work-related reasons during his/her work day.  Such travel time therefore is compensable as work time for both minimum wage and overtime purposes. 4.  Do you have to pay an employee for time spent traveling on an overnight trip? Whether or not travel in connection with overnight trips is compensable work time generally depends on when the travel occurs.  If an employee goes on an overnight trip for work and the travel occurs outside of the employee’s regularly scheduled work hours, generally the travel time will not be deemed work time.  If, however, the time the employee spends traveling is during his/her regular work hours, that travel time will generally count as "time worked" -- even if the travel occurs on a day that the employee would not ordinarily have worked!  For example, if an employee regularly works 9:00 a.m. to 5:00 p.m. Monday to Friday, but travels for work from 4:00 p.m. to 10:00 p.m. on Sunday, the employee would have to be paid for the hour from 4:00 p.m. to 5:00 p.m. because that time overlaps with the hours during the days that the employee regularly works, even though Sunday is not a regular work day for that employee.  The hours from 5:00 to 10:00 p.m. need not be paid because they are outside the hours that the employee regularly works.  This rule may seem counterintuitive, but it what is currently required under the law. 5.  Does it matter whether the employee uses public transportation or drives himself/herself for the overnight work trip? Yes.  If an employee uses public transportation to get to the distant location, whether or not the travel time is compensable will be determined as set forth in Question 4 above.  If the employee is not offered the option of using public transportation and is required to drive himself or herself, the entire time spent driving is compensable.  However, if an employee is offered the option of using public transportation and instead chooses to drive himself or herself to the distant location, the employer can count as compensable “work time” either the actual time spent driving or the hours that overlap with the employee’s regular work hours as set forth in Question 4 above. Take the following scenario, for example.  Employee A regularly works Monday to Friday from 9:00 a.m. to 5:00 p.m. and has to travel from New York City to Syracuse for an overnight trip.  The employer offers the employee the option of air travel, which would require the employee to take a flight departing New York City at 4:00 p.m. on Sunday and arriving in Syracuse at 5:05 p.m. that same day.  The employee instead opts to drive the 5 hours from New York City very early on Monday morning instead of flying to Syracuse on Sunday.  In this scenario, the employer has the option of paying the employee for either the one hour from 4:00 p.m. to 5:00 p.m. on Sunday since it overlaps with the employee’s regular work hours of 9:00 a.m. to 5:00 p.m., or the five hours the employee spends driving on Monday morning before his/her regular workday would otherwise begin. 6.  Do you have to pay an employee for the entire time he/she is away on an overnight work trip? If, while on an overnight trip for work, a non-exempt employee performs work outside of his/her regularly scheduled work hours, the time the employee spends doing that work will count as “time worked” and has to be compensated just as it would had the employee worked that time under ordinary circumstances.  But time that the employee spends idly or on personal activities will not count as “time worked” and will not have to be compensated. 7.  What about one-day work trips to a different city that do not require an overnight stay -- do you have to pay an employee for the entire day? Different rules apply when an employee usually works in a single location, but goes on a special one-day work trip to a different city than where he/she regularly works.  In that circumstance, if the employee uses public transportation to get to the destination city, the employee does not have to be paid for time he/she spends commuting from home to the train station or airport (whichever applies), because that is considered to be the employee’s ordinary commuting time.  But the employee does have to be paid for all of the time he/she spends at the airport or train station (yes, flight delays and the like will be deemed compensable), and actually traveling between the train station or airport to the other city, regardless of whether or not the travel occurs during the employee’s regular work hours.  If the employee instead drives himself/herself to the destination city instead of taking public transportation, the time spent driving would be compensable as work time.  If, however, the driving employee first drives to his/her regular work location before or after driving to the destination city, that home-to-work travel to the regular work location would be considered the employee’s ordinary commute and therefore non-compensable.  Regardless of whether public transportation is used or the employee drives to the destination city for a one-day work trip, the time the employee spends for meal breaks (assuming he/she is not working during those breaks) and any idle time (i.e., time spent neither working nor traveling) outside of his/her regular work hours is not compensable and does not count as “time worked.” 8.  Are these rules the same under the FLSA and any state-specific wage and hour laws? The wage and hour rules are not necessarily the same from state to state, so it is always important to be mindful of any state-specific laws that could affect an employer’s obligation to pay its non-exempt employees.  For employers with operations in New York State, the New York State Department of Labor has indicated that it interprets the relevant New York Labor Law provisions and accompanying state regulations “in line” with the FLSA’s “travel time” rules, but that is not a guarantee that the state and federal laws will always be in congruity.  It is always possible that the New York State Department of Labor could take an inconsistent position on a particular “travel time” issue, so it is important to always double check and not just assume that the federal rules apply.

On February 22, 2017, the New York State Workers’ Compensation Board unveiled proposed regulations concerning the state's new Paid Family Leave (PFL) law.  The PFL law was passed as part of the 2016 state budget and will eventually require virtually every New York employer to provide employees with up to 12 weeks of paid leave:  (1) for the birth, adoption, or placement of a new child; (2) to care for a family member with a serious health condition; or (3) for a qualifying exigency arising from a family member's military service (as defined in the federal Family and Medical Leave Act).  This program will be funded through employee payroll deductions.  PFL is not intended to cover an employee's own serious health condition; rather, PFL is intended to complement the already existing state disability insurance program.  The basics of the PFL law can be found in our earlier blog article on this subject. The Workers' Compensation Board will be accepting comments on the proposed regulations for 45 days from the date of their release -- until April 7.  Click here to review the proposed regulations and to access an online link to submit comments.  The state also recently launched a website providing information about PFL for employers and employees and set up a new helpline.  Notably, however, the details on this new PFL website reflect the program as it would exist under the proposed regulations, meaning the information there is not yet final (despite how it appears). The proposed regulations contain a great deal of detail to digest, but several significant points will immediately catch the attention of employers:

• First, the state proposes a system where employees apply directly to the employer's insurance carrier for PFL benefits.  The employer merely completes one section of a claim form before it is submitted to the carrier by the employee.  The insurance carrier makes the final determination -- not the employer.  The proposed regulations provide specific details on the format, contents, and timing of claims and decisions on claims.  This is significant because the insurance carrier's determination will have an impact beyond just the payment of benefits to the employee:  it will also require the employer to protect the employee's job, and to maintain his/her health insurance benefits for the duration of the leave.  Additionally, for employers and employees covered by the Family and Medical Leave Act (FMLA), FMLA and PFL benefits will typically run concurrently (more on this below).  Therefore, employers will be faced with a situation where they are making a leave decision simultaneously with an insurance carrier for the same exact leave.  There could be a situation where the employer denies leave, and the carrier approves it.  (Consider, for example, a situation where the employer believes the medical certification is not sufficient, but the carrier disagrees.)  Additionally, the proposed regulations do not include any key employee exceptions like FMLA.  Thus, no matter the size of the employer or the role played by the employee, once the carrier approves the leave, the employer must grant it and guarantee reinstatement at the conclusion of the leave.
• Second, the proposed regulations set up an arbitration system for the purpose of appealing claims denials.  The arbitrator is appointed by the State Workers’ Compensation Board.  The proposed regulations do not appear to contemplate a situation where the employer could appeal because it believes the benefits were wrongly awarded.  Moreover, it is easy to anticipate the complications that could arise if an arbitrator reverses a claims denial.  If the employer denied the time off because the claim was denied and the purpose for the leave has long passed, what is the employee’s remedy?  On the other hand, if the employee already took the time off but used paid time off, do they receive PFL benefits on top of the wages already received?  Must the employer restore the employee’s paid time off that was used?  All of this is unclear.
• Third, employers cannot require employees to use accrued paid time off (such as PTO, sick, or personal time) for the requested PFL time.  It can offer the option and then, if the employee elects this option, seek reimbursement from the insurance carrier.  If the employee elects to use accrued paid time, the employee is still entitled to be reinstated.  If an employee declines this option, he or she can effectively save PTO to be used after his or her return from PFL (which is likely inconsistent with the reason the employer offered various forms of PTO in the first instance).
• Fourth, state disability and PFL will not run concurrently.  This means that in the case of maternity leave, it appears that an employee could conceivably collect disability payments for the first 6-8 weeks of leave (which would not be a PFL-covered absence), and then transition to PFL for an additional 12 weeks job-protected paid leave, for a total of 18-20 weeks off with partial pay.
• Fifth, the regulations do allow PFL and FMLA leave to run concurrently (as mentioned above).  However, this will hinge on the employer designating the leave as FMLA leave by providing the notice required under the federal FMLA regulations.  Employers need to remember to provide the FMLA designation notice.  The insurance carrier's acceptance of a claim for PFL benefits does not automatically cause FMLA leave to run concurrently.  Also related to the interplay with FMLA, the differing eligibility standards between PFL and FMLA sets up a situation where a new employee becomes eligible after only working 26 weeks for the employer, and can immediately take up to 12 weeks of job-protected leave.  Then, once the employee returns to work and reaches the FMLA threshold of 1,250 hours in 12 months, the employee will be eligible for another 12 weeks of job-protected leave.

A few other aspects of the proposed regulations will also interest employers.  Under the proposed regulations, disability insurance carriers will be required to offer PFL coverage in conjunction with their existing disability insurance policies.  Employees who are covered by a disability insurance policy will automatically be covered for purposes of PFL effective January 1, 2018.  Carriers who choose to get out of the disability insurance business in New York, so as to avoid administering the PFL insurance program, must notify New York State by the earlier of July 1, 2017 or within thirty days of the date the community rates for premiums are published by the state (or within 180 days of discontinuing coverage, if discontinued after 2018).  Employers who are self-insured for disability purposes have the option of either self-insuring for PFL benefits or obtaining alternative coverage.  The employer must make the election to self-insure by November 30, 2017. Unionized employers with leave provisions in their collective bargaining agreement that are at least as favorable to employees as the PFL program are exempt from the law.  However, it is not clear who will make the determination of whether the CBA’s benefits are sufficiently favorable.  Additionally, public employers are only covered if they elect to opt-in. These are just a few highlights.  There is much more detail covered in the 48 pages of proposed PFL regulations.  Employers should take the time to review these regulations and submit comments to the Workers' Compensation Board on how the proposed provisions will impact their workplace. It is possible that many aspects of the regulations will change between now and when they are finalized.  Due to the unknown, we do not recommend that employers begin drafting and revising leave policies on the basis of these proposed regulations.  However, we do recommend that employers take an inventory of current leave practices and policies and begin to anticipate how they might need to change.  Once the final regulations are published, it will be critical for employers to quickly respond.  Among other things, employers will be required to provide written details of how PFL benefits are administered to employees.  Those written details will need to reflect the processes set forth in the final PFL regulations. We will continue to analyze these proposed regulations and provide additional updates on how they might impact your workplace.  Stay tuned to our blog for further updates.

The revised Regulations of Section 503 of the Rehabilitation Act (which became effective in March 2014) required Federal contractors and subcontractors to invite applicants and employees to self-identify their disability status using an Office of Federal Contract Compliance (OFCCP) prescribed form:  (1) at the pre-offer stage of the application process, (2) post-offer after an applicant is offered a position but prior to starting work, and (3) by survey of the workforce every 5 years.  The required OFCCP Form is Form CC-305; this form cannot be altered or changed.  The original Form CC-305 approved by the Office of Management and Budget (OMB ) expired on 1/31/2017. The OFCCP recently published a notice that the OMB has approved a new Form for another three years.  No change was made to the Form except the expiration date.  Effective immediately, Federal contractors and subcontractors must either download the renewed form(s) or update their electronic version(s) of the Form to reflect the new expiration date of 1/31/2020.  The Form is available in multiple formats and languages and can be obtained from the OFCCP’s website here.

As Yogi Berra once said: “It’s like déjà vu all over again.” Since mid-February, the Trump Administration promised the imminent release of a revised and improved executive order addressing travel ban and refugee admissions. The wait is over.  On Monday, March 6, 2017, President Trump signed a new executive order titled “Protecting the Nation from Foreign Terrorist Entry into the United States” (the new EO).  The new EO revokes and replaces Executive Order 13769 (EO 13769), which President Trump signed on January 27, 2017.  From the get-go, there was significant confusion surrounding the scope and implementation of EO 13769, immediately followed by numerous legal challenges.  On February 9, 2017, the United States Court of Appeals for the Ninth Circuit upheld a temporary restraining order issued by a lower court, which prohibited the federal government from enforcing any restrictions contained in EO 13769. Unlike EO 13769, which was effective immediately, the new EO allows for a ten-day grace period and will not become effective until 12:01 a.m. on Thursday, March 16, 2017. Similar to its predecessor, the new EO imposes a 90-day “temporary pause” on the entry into the United States of nationals from the following six countries: Iran, Libya, Somalia, Sudan, Syria and Yemen. Most notably, Iraq is no longer on the list. Nevertheless, the new EO states that Iraqi nationals will be subject to additional scrutiny where they may “have connections with ISIS or other terrorist organizations, or otherwise pose a risk to either national security or public safety.” In an effort to avoid the chaos that ensued following EO 13769, the new EO provides greater clarity on the scope of the travel ban. Specifically, the 90-day travel ban will apply only to those foreign nationals from the six enumerated countries of concern if:

• the foreign national is not physically present in the United States on the effective date of the order (March 16, 2017);
• the foreign national did not have a valid visa at 5:00 pm EST on January 27, 2017; and
• the foreign national does not have a valid visa on March 16, 2017.

The new EO order is very clear that it does not apply to green card holders, those with validly issued visas, and dual citizens.   In addition, the new EO allows for exceptions and individualized assessments to be made by consular and border immigration officers in certain cases. In addition to implementing a revised travel ban, the new EO also addresses the current refugee program. Specifically, the new EO:

• caps the admission of refugees to no more than 50,000 for fiscal year 2017;
• directs the Secretary of State to suspend refugee travel into the United States for 120 days (beginning on March 16, 2017); and
• directs the Secretary of Homeland Security to suspend decisions on applications for individuals seeking refugee status for 120 days (beginning on March 16, 2017).

Noticeably absent from the new EO is the indefinite ban on the admission of Syrian refugees that appeared in EO 13769. While the headlining topics of the new EO remain focused on travel restrictions and refugee admissions, it is worth noting that the new EO also mandates the following:

• the immediate suspension of the Visa Interview Waiver Program (but for individuals seeking a visa based upon diplomatic or diplomatic-type visa status);
• a review of non-immigrant visa reciprocity agreements currently in place with other countries to ensure that such agreements are “truly reciprocal”;
• the collection and disclosure of certain data to the American people pertaining to foreign nationals and their involvement in or connection to certain nefarious activities (i.e., terrorist-related offenses, acts of gender-based violence against women, etc.).

Despite the Trump Administration’s efforts to narrowly tailor this newest EO, we anticipate that there will be legal challenges filed by various stakeholders in the coming days and weeks.

Following a national trend to "ban the box" on job applications, on February 13, 2017, the Albany County Legislature passed legislation prohibiting Albany County from inquiring about an applicant’s criminal conviction history until after the applicant receives a conditional offer of employment.  The new law, entitled the "Albany County Fair Chance Act," also requires the County to post a disclaimer on job announcements and position descriptions for positions that necessitate an inquiry into the applicant’s criminal history or a background check.  If the position for which an applicant is being considered requires inquiry into the applicant’s criminal history, and the result of this inquiry leads to a revocation of the conditional offer, the County must provide the individual with an adverse action notice containing the County’s basis for the decision, a copy of the conviction history report, a notation of the conviction(s) that form the basis of the action, and information on how to appeal the decision.  The Act will be enforced by the Albany County Department of Human Resources, and will be effective immediately upon filing in the Office of the Secretary of State. The applicability of this legislation is extremely narrow:  only Albany County itself is subject to its requirements and restrictions.  Municipalities and private entities doing business in Albany County are not covered by the law. Other New York State municipalities have also passed "ban the box" legislation.  For additional information regarding "ban the box" legislation applicable to New York City, Syracuse, Rochester, and Buffalo, please click on the link for each municipality.

As we previously reported on this blog, OSHA recently made sweeping changes to its injury and illness reporting rule.  The agency delayed enforcement of the rule until December 1, 2016.  Many industry advocates were hoping for a reprieve, and several industry groups, including the Associated Builders and Contractors and the National Association of Manufacturers, had filed suit, seeking a preliminary injunction to prevent the rule from going into effect.  Unfortunately, the injunction was denied and the rule did go into effect on December 1.  However, the rule is still being challenged.  Interestingly, the incoming administration recently jointly filed a letter with the court along with the plaintiffs, stating that each side planned to move for summary judgment, strongly suggesting that the incoming administration has no plans to revise or revoke the rule. One of the more troubling aspects of the rule was not in the rule itself, but in the preamble to the rule -- OSHA's stated position that it would consider blanket rules that require drug testing of employees after any accident to be unreasonable, i.e., to discourage the reporting of injuries and illnesses.  Without announcement, OSHA issued guidance on its position late last year that should ameliorate employers’ concerns.  Simply put, employers do not have to have reasonable suspicion of drug use, but reasonable suspicion that drug use could have led to the accident causing illness or injury.  OSHA provides the following examples: "Consider the example of a crane accident that injures several employees working nearby but not the operator.  The employer does not know the causes of the accident, but there is a reasonable possibility that it could have been caused by operator error or by mistakes made by other employees responsible for ensuring that the crane was in safe working condition.  In this scenario, it would be reasonable to require all employees whose conduct could have contributed to the accident to take a drug test, whether or not they reported an injury or illness.  Testing would be appropriate in these circumstances because there is a reasonable possibility that the results of drug testing could provide the employer insight on the root causes of the incident.  However, if the employer only tested the injured employees but did not test the operator and other employees whose conduct could have contributed to the incident, such disproportionate testing of reporting employees would likely violate section 1904.35(b)(1)(iv). Furthermore, drug testing an employee whose injury could not possibly have been caused by drug use would likely violate section 1904.35(b)(1)(iv).  For example, drug testing an employee for reporting a repetitive strain injury would likely not be objectively reasonable because drug use could not have contributed to the injury.  And, section 1904.35(b)(1)(iv) prohibits employers from administering a drug test in an unnecessarily punitive manner regardless of whether the employer had a reasonable basis for requiring the test." So, if an employee on a scaffold dropped a piece of lumber, striking an employee below in an area the employee was allowed to walk, it would not be proper to test the employee below, but it would be proper to test the employee on the scaffold, because operator error -- and possible drug impairment -- could have contributed to the accident. It still remains to be seen whether this rule will be rescinded through the Congressional Review Act or vacated through the lawsuit filed in the Northern District of Texas, but in the meantime, employers should make sure their policies regarding injury and illness reporting comport with the new requirements.

In a decision issued yesterday, the New York State Industrial Board of Appeals (IBA) revoked the regulations regarding payment of wages by debit card and direct deposit.  While the full decision is available here, the upshot is that the IBA concluded that the Commissioner exceeded his “rulemaking authority and encroached upon the jurisdiction of the banking and financial services regulators.” Accordingly, the regulations governing the payment of wages by debit card and direct deposit, which were set to go into effect on March 7th, are revoked.  Employers need not act to come into compliance with those regulations. An appeal is possible.  Stay tuned.