Hutcheson Bowers LLLP

NLRB Limits Severance Agreements

2023-03-10T17:34:48Z

On Tuesday, February 21, the National Labor Relations Board (NLRB) issued a long-awaited decision affecting severance agreements. Severance agreements may be considered unlawful if they either 1) prohibit a worker from disclosing the terms of the severance or 2) restrict the worker’s ability to speak negatively about their former employer. These standard clauses – a non-disparagement clause and a confidentiality clause – may now be, in effect, illegal. Also, while the NLRB ruling was made in the case of severance agreements used in a lay-off, there is no reason right now to think that these same rules would not also apply to one-off separation agreements. This ruling affects both unionized and non-unionized workplaces. However, most supervisors, managers, public sector employees, contractors, and some agricultural workers are not covered by this ruling. Thus, an employer may still be able to include a non-disparagement and confidentiality clause for its supervisors and executive team in any severance or separation agreement. Several Trump-era NLRB rulings permitted employers to include restrictions on a worker’s rights to speak about their severance agreement or otherwise talk negatively about their former employer. However, February's ruling in McLaren Macomb reversed these decisions—jeopardizing many employers’ severance agreement practices. This specific case challenged standardized confidentiality and non-disparagement provisions in severance agreements for terminated employees at McLaren Macomb—a unionized teaching hospital in Michigan. Under the Trump-era standard, these types of provisions only violated the National Labor Relations Act (NLRA) if the employer also committed a separate unfair labor practice discriminating against workers. For example, when these provisions were implemented to snuff out protected activity such as union organizing. However—in the McLaren Macomb decision, the NLRB held that the hospital’s broadly drafted confidentiality and non-disparagement provisions were unlawful. Essentially, this standard says it is a violation of the NLRA if a provision’s terms tend at all to interfere with workers’ organizing rights. In this case, the provisions were deemed to be too broad and to “chill” the employees’ ability to band together in an effort to improve the workplace—also known as NLRA Section 7 rights. Additionally, the NLRB held that the mere “proffering” of these provisions amounted to unlawful labor practice. Employers can therefore no longer rely on a defense arguing that they haven’t actually sought to enforce the provisions. This is a big departure from the Trump-era rule that required additional unlawful conduct for an NLRA violation. It is still an open question as to whether these provisions would be upheld if they included a well-crafted disclaimer or other safeguard. In the McLaren case, the NLRB suggests that a disclaimer could be effective if it affirmatively protects employees right to:

participate in Section 7 activity;
file Unfair Labor Practice charges;
assist others in participating in Section 7 activity or filing Unfair Labor Practice charges;
otherwise cooperate with the Board’s investigation.

It is unclear how broad these disclaimers would have to be to pass NLRB review; and it is possible that they would have to be made so broad so as to render the provisions practically useless. In terms of implementation, most employers should likely shift back to the way they were operating during the Obama era—before the Boeing decision decreased NLRB scrutiny of severance agreements. It is also likely that this decision will be followed by General Counsel advisory memos. These will likely present more concrete examples of severance covenants that will be upheld under the McLaren standard. Employers must now decide whether to cease including confidentiality and non-disparagement provisions in their severance agreements, to draft disclaimers or other safeguards to include in the provisions, or to proceed with business-as-usual. Each employer should review their risk tolerance level, their potential vulnerability, the Board’s remedial authority over their organization and industry, and any deterrent effect that a disclaimer or safeguard language could have. NLRB’s press release with a link to the Board Decision can be found here.

New Protections for Pregnant and Nursing Mothers

2023-01-13T19:02:18Z

On New Year’s Day, President Biden signed into law a $1.7 trillion Omnibus spending bill that includes several new protections for pregnant women. These include the Providing Urgent Maternal Protections for Nursing Mothers Act (“PUMP Act”) and the Pregnant Workers Fairness Act (“PWFA”). Providing Urgent Maternal Protections for Nursing Mothers Act The PUMP Act expands the 2010 federal workplace protections for women who need to express breast milk. The new law requires that employers provide these accommodations for other types of workers not covered under existing law. The PUMP Act also requires that time spent expressing breast milk while not relieved from duty must be considered hours worked. It also expands the available time period for such accommodations from one year to two years. Pregnant Workers Fairness Act The PWFA applies to employers with 15 or more employees, requiring them to provide qualified employees with reasonable accommodations for known limitations of pregnancy, childbirth, or related medical conditions. A “qualified employee” is an employee or applicant who, with or without reasonable accommodation, can perform the essential functions of the position. An individual is considered qualified even if the inability to perform the essential functions is for a temporary period, can be performed in the near future, and the inability to perform the essential function can be reasonably accommodated. “Known limitations” are those physical or mental conditions related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions that the employee, or her representative, has communicated to the employer and the condition need not meet the definition of a disability under the ADA. The PWFA also creates five new unlawful employment practices. New Unlawful Employment Practices

Failing to make reasonable accommodations for the known limitations of pregnancy, childbirth, and related medical conditions of a qualified employee.
Requiring a qualified employee affected by pregnancy, childbirth, or related medical condition to accept accommodation that is not reasonable or was not decided on through an interactive process.
Basing the denial of employment opportunities to a qualified employee on the need to make reasonable accommodations required under the PWFA.
Requiring a qualified employee to take any kind of leave if another reasonable accommodation could be provided to the employee.
Taking adverse action in conditions, privileges, or terms of employment in response to a qualified employee requesting or using reasonable accommodations under the PWFA.

Defenses Like the ADA, the PWFA allows a defense for employers who can demonstrate that they—in good faith—consulted with the employee on their limitations and attempted to identify and make reasonable accommodations that provide the employee with an effective opportunity and do not cause undue hardship. How to Respond The PWFA requires employers to treat known limitations caused by pregnancy, childbirth, or related conditions like disabilities under the ADA. They must engage with qualified employees in an interactive process designed to provide reasonable accommodations for those limitations—treating leave (even paid leave) as a last resort. In order to avoid litigation and establish a defense to any potential claims, affected employers should document their good faith efforts to identify and provide such accommodation.

Microsoft Report Recommendations on Anti-Harassment & Non-Discrimination Policies and Practices

2023-02-24T16:39:22Z

Employers should periodically evaluate their harassment and discrimination policies to ensure compliance and find opportunities to improve. In January 2022, in the wake of multiple high-profile allegations of inappropriate conduct—including claims against Bill Gates—Microsoft commissioned an independent law firm to conduct a review of the effectiveness of its existing sexual harassment policies and gender discrimination policies. Microsoft took the unprecedented step of releasing this comprehensive report in November 2022 to the general public. All employers now have access to this 50-page report based on a nine-month review and investigation. The report contains valuable recommendations from which many employers would benefit. The complete final report can be found here. Key Improvements Recommended in the Report

Have the CEO sign the company's anti-discrimination and harassment policies
Revise anti-harassment and anti-discrimination policies to provide examples and clarify what is expected from each party
Require disclosure of certain consensual relationships within the workplace
Adopt a formal procedure for a party to request reconsideration of an investigation’s findings
Advise employees of the right to seek external relief if they desire
Develop an effective tool to ensure that senior leaders that take required training on gender discrimination and sexual harassment
Ask complainants to complete surveys about their investigation experience
Establish Credible Transparency around Remedial Efforts
Take steps to minimize a perception that senior leaders are not held accountable
Coordinate data among the various HR teams and groups that investigate allegations of misconduct
Make improvements in the investigation process
Continue efforts to increase the percentage of women in senior leadership positions.

EEOC Releases Updated “Know Your Rights” Poster

2022-12-28T19:25:54Z

The Equal Employment Opportunity Commission (EEOC) recently drafted and published an updated “Know Your Rights” poster. This poster effectively replaces the previous “EEO is the Law” poster. Federal law requires employers with 15 or more employees to post workplace notices that explain civil rights workplace protections. The notices must either be prepared or approved by the EEOC, and must be posted conspicuously in places where notices to applicants and employees are routinely posted. Although for most it is not a requirement, employers are also encouraged to make electronic versions of the poster available in a prominent location on company sites. For employers with an entirely remote workforce, electronic posting may be the only form of posting required. The EEOC periodically updates a model poster that contains all necessary information. This new “Know Your Rights” poster is one of these updates. It provides information on various protected categories, and now clarifies that harassment is a form of unlawful discrimination. It also makes clear that discrimination based on pregnancy, sexual orientation, or gender identity are forms of prohibited sex discrimination. Currently, the updated poster is only available in English. Versions in additional languages may be available later on EEOC's website. Employers can satisfy Title VII’s posting requirement by printing and posting the new “Know Your Rights” poster.

Congress Limits use of NDAs in Sexual Harassment Cases

2022-12-28T19:17:31Z

President Biden recently signed the Speak Out Act. The bill passed the house 315-109 after having passed the Senate unanimously in September. The bill is the second bill passed this year prompted by the #MeToo movement, following the passage of a similar law from earlier this year that prevents companies from forcing sexual harassment cases into arbitration. This new law is limits the applicability of nondisclosure agreements for allegations of workplace sexual assault or harassment. However, the bill only applies to those agreements signed before a dispute arises. Troublingly, the bill does not clarify what counts as a "dispute"—and arguments could be made that it means a lawsuit or just a complaint to HR. Courts will have to determine where to draw this line, but it is clear that this law will not affect agreements signed as a condition of settlement. The bill does not apply to any other kinds of complaints such as wage theft, or other types of discrimination. Although there are still questions about how this law is going to be enforced, it is clear that the kinds of NDAs many employees sign on their first day of work will not be enforced against them if they speak out about workplace sexual harassment or assault.

Local Texas Mask Laws

2022-11-11T12:32:12Z

Local Texas Mask Laws

June 2020 Late last week, Texas Governor Abbott signaled his approval that cities and counties could require and enforce via fines businesses to require masks. Many Texas cities and counties responded by immediately passing such orders. In short, businesses within major metropolitan areas in Texas, which provide goods or services directly to the public, must immediately draft and post a policy that requires all employees and customers to wear masks or be subject to fines. Travis, Dallas, and Harris Counties have all issued such orders. Please check your local government authority for orders that apply to the county or city in which you do business. Also, stay tuned to see if these orders are expanded. Most of these orders are very similar but they vary in the amount of fine and the effective dates. The El Paso order is a bit different in substance and is the broadest. Here is a summary: Travis County The Travis County order requires all commercial entities that provide goods or services directly to the public to develop and implement a health and safety policy. The policy must require all employees and visitors to wear face coverings when in an area which will involve close contact or where six feet of separation is not feasible. Businesses must post the policy. The order lasts through August 15. Failure to develop and implement this policy before June 23 may result in $1000 fine. A sample policy is provided by the order. Note that the City of Austin has also issued an order, which does not have a fine associated with it. But all businesses with the City of Austin are subject to the Travis County order. Bexar County The Bexar County order is effective June 17 through June 30. Under this order, all commercial entities in Bexar County providing goods or services directly to the public must develop and implement a health and safety policy. The policy must require, at a minimum, that all employees or visitors to the commercial entity’s business premises or other facilities wear face coverings when in an area or performing an activity which will necessarily involve close contact or proximity to co-workers or the public where six feet of separation is not feasible. Commercial entities must post the Health and Safety Policy in a conspicuous location Failure to develop and implement the Health and Safety Policy within five calendar days following the Effective Date may result in a fine not to exceed $1,000 for each violation. Hays County The Hays County order is effective as of 12:01 a.m. on Monday, June 22, 2020 and continuing through 11:59 p.m. on Monday, July 20, 2020. Under this order, all commercial entities in Hays County providing goods or services directly to the public must develop and implement a health and safety policy. The policy must require that all employees or visitors to the commercial entity’s business premises or other facilities wear face coverings when in an area or performing an activity which will necessarily involve close contact or proximity to co-workers or the public where six feet of separation is not feasible. Commercial entities must post the Health and Safety Policy in a conspicuous location sufficient to provide notice to employees and visitors of all health and safety requirements. There is no fine assessed under this order at this time. Dallas County The Dallas County Order is similar to those discussed above. It was passed Friday, June 19, 2020. There is a $500 fine for non-compliance. Businesses must comply within 5 days or face fines. The order expires August 4. Harris County The Harris County Order is similar to those discussed above. It is effective June 22- June 30. Children under 10 are exempt. There is a $1000 fine. Hidalgo and Cameron Counties also have issued similar orders to those discussed above. El Paso County The El Paso County Order is effective as of June 22, 2020. There is a $500 fine for non-compliance. All businesses in the City of El Paso must develop and implement a health and safety policy. All businesses must require employees, including volunteers, to have a face covering when either in an area or performing an activity which will necessarily involve close contact or proximity to co-workers or the public, where six feet of separation from other individuals is not feasible. All businesses must require that all visitors, to include contractors and vendors, wear face coverings while on the business’s premises Covered businesses include any for-profit, non-profit, or educational entities, regardless of the nature of the service, the function they perform, or its corporate or entity structure. Gyms and exercise establishments must require all individuals inside of the business establishment to wear a face covering at all times except for when an individual is actively engaging in exercise.

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The CARES Act

2022-02-07T14:04:06Z

The CARES Act

April 2020 The federal government enacted the CARES Act to help small businesses through the COVID crisis. The guidance for interpreting this Act (and making informed decisions thereunder) is evolving on a daily basis. The purpose of this email is to break them down employers so that they can easily compare the potential advantages and disadvantages of the options and make informed decisions. In general, CARES applies to employers with less than 500 individual employees (irrespective of whether they are full-time or part-time—you count the person and NOT FTEs), including eligible 501(c)(3) nonprofits. If your entity hovers near the 500-employee mark OR if your entity is one of several affiliated entities that together employ 500+ employees, you should seek legal guidance on whether the statutes apply to you and if so, how. The goal of CARES is to help small businesses retain their workforce through: • OPTION A: potentially forgivable “payroll protection program” loans to help cover qualified payroll expenses and/or non-forgivable SBA economic injury disaster loans OR • OPTION B: a tax credit (50%) for qualified wages paid by businesses whose business is disrupted by COVID AND the deferral of the employer portion of 2020 social security taxes (50% is deferred until Dec. 31, 2021 and 50% is deferred to Dec. 31, 2022). I. Option A Loans a. Payroll Protection Loans (PPP) 1. How much can you borrow? Under CARES, qualifying small businesses are eligible to borrow the lesser of: (a) 2.5 times the average monthly “payroll costs” of the borrower incurred during the one-year period before the date of the loan or (b) $10 million. The interest is fixed at .5% with a maturity of two years, with no prepayment penalties or fees. 2. What are qualifying “payroll costs”? In general, “payroll costs” include: • salary, wage, commission, or similar compensation; • payment of cash tip or equivalent; • payment for vacation, parental, family, medical, or sick leave; • allowance for dismissal or separation; • payment required for the provisions of group health care benefits, including insurance premiums; • payment of any retirement benefit; or • payment of State or local tax assessed on the compensation of employees. Importantly, “payroll costs” do not include the compensation of any individual employee with an annual salary in excess of $100,000. 3. What can you use the PPP loan proceeds for? You may use the loan proceeds for: • Payroll costs; • Group healthcare benefit costs and insurance premiums; • Mortgage interest (but not prepayments or principal payments) and rent payments; and • Interest on debt that existed as of February 15, 2020. 4. How does PPP loan forgiveness work? To be eligible for forgiveness, you must: • Use the loan proceeds for to pay these expenses over the 8 weeks after getting the loan. AND • You must maintain your staff and payroll, including: o your full-time employee headcount (NOTE: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.) AND o not cutting salaries and wages by more than 25% for any employee that made less than $100,000 annualized in any pay period in 2019. 5. How and when do I apply for a PPP loan? The PPP application window opens this Friday, April 3. You must apply through an SBA-approved lender. BECAUSE OF THE ANTICIPATED VOLUME OF APPLICATIONS, IF YOU INTEND TO APPLY FOR A PPP LOAN, YOU PROBABLY SHOULD BE READY TO DO SO ASAP. Contact your lender to determine if they are SBA-approved and planning to process PPP loans. If not, you may find an SBA-approved lender here. We recommend you immediately review the SAMPLE SBA PPP loan application. And, these are some of the types of documents you may need to apply: • Organizational documents such as charter, certificate of formation, bylaws, and operating agreements • W-9s • Copies of drivers’ licenses for controlling owners • Bookkeeping general ledger report on all entries that relate to payroll for 2019 and 2020 YTD. This includes Salaries, Wages, Commissions, Vacation Pay, Parental Leave, Family Leave, Sick Leave, Allowance for Dismissal/Separation (Severance Agreement), Group Health Care Payments/Premiums, Retirement Benefits, State & Local Tax assessed on Compensation • 2019 tax returns or 2019 profit and loss report/balance sheet • Recent IRS payroll tax filings (which includes number of employees) • Reports detailing the 2019-2020 YTD compensation for each employee • Payments made to any group health care benefits including premiums paid in 2019 and 2020 YTD 6. Helpful Link Here is a helpful sample calculation of the CARES loan amount and forgiveness under different scenarios. b. SBA Economic Injury Disaster Loans (EIDL) 1. What are EIDL loans? EIDL loans are issued under the SBA’s existing disaster loan program. But the CARES Act expands the eligibility for such loans for small businesses who have been impacted by COVID-19. Qualifying businesses may take out both PPP and EIDL loans; provided, that they may not seek to borrow for the same costs twice. EIDL loans are non-forgivable. But businesses who have taken out an EIDL loan since the COVID-19 Emergency Declaration, may be eligible to refinance their EIDL loan into a PPP loan to take advantage of the forgiveness provisions. 2. What can I borrow? Businesses that have suffered “substantial economic injury” due to COVID-19 (as determined by the SBA) may borrow up to $2 million. EIDL loans may be used for payroll costs, costs incurred due to supply chain interruption, and obligations that cannot be met due to revenue losses. 3. What are the terms? The interest rate on EIDL loans is 3.75% fixed for small businesses and 2.75% for nonprofits. EIDL loans have up to a 30-year term and amortization (determined on a case-by-case basis). And, the first payment is due 12 months after the loan is disbursed. 4. What about the Economic Injury Disaster Grant? When you apply for an EIDL loan, you can also request an advance of up to $10,000 to pay allowable working capital needs. The SBA anticipates paying these advances within 3 days. The advance is like a grant. There is no requirement it be repaid, even if your application for an EIDL loan is denied; however, the advance must be deducted from any loan forgiveness amounts under a PPP loan, described above. 5. How do I apply? You may apply here for an EIDL loan online through the SBA. 6. Are there other qualifying terms? The CARES Act waives several traditional requirements, including that the applicant cannot obtain credit elsewhere; the applicant must personally guarantee loans of $200,000 or less; and that the applicant must have been operating for at least one year. While the CARES Act is silent on collateral, the SBA may require it if available. 7. Can I take out BOTH PPP and EIDL loans? Yes. But, you cannot take them out “for the same purposes.” And, if you take the $10,000 EIDL grant, that amount would be subtracted from the amount forgiven under your PPP loan. II. Option B Tax Credit/Deferment a. “Employee Retention” tax credit Employers whose businesses were disrupted by COVID-19 because of a “total or partial shutdown order” or if gross receipts fell by more than 50% when compared to the same quarter in 2019, may be eligible for a 50 % refundable payroll tax credit on the first $10,000 of qualified wages (including health plan expenses) paid to any employee. (So, the maximum credit for “qualified wages” paid to any single employee is $5,000. 1. What are “Qualified Wages”? The answer depends on how many employees you averaged in 2019. If an employer averaged more than 100 full-time employees in 2019, qualified wages are the wages paid to an employee for time that the employee is not providing services. In other words, you only get a credit for employees who are furloughed or otherwise not working. If an employer had less than 100 full-time employees in 2019, qualified wages are any wages paid to any employee during the period of economic hardship. Qualified wages must have also been paid between March 12, 2020 and December 31, 2020. 2. How do I claim the credit? The credit is allowed against the employer portion of social security taxes. If the amount of the credit exceeds the federal employment taxes, the employer will be entitled to a refund. Employers must report their wages and credits for each calendar quarter on their federal employer income tax returns. b. Deferral of Social Security Taxes Employers may defer their half of Social Security taxes (but not Medicare taxes). The employer’s half of social security taxes for the period March 12, 2020 and December 31, 2020 are not required to be deposited on the regular schedule. Instead, half of those taxes would be due to be deposited on December 31, 2021, and the remaining half would be required to be deposited by December 31, 2022.

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Benchmark Litigation Recognizes Hutcheson Bowers as a Leading Labor and Employment Law Firm

2022-02-07T14:04:11Z

Hutcheson Bowers is pleased to announce that it has been recognized as a top (Tier 2) labor and employment firm in Texas for 2018 by Benchmark Litigation. Only 23 law firms throughout the state of Texas were chosen for this honor. Firm partner Shannon Hutcheson was named a South Star as well. Firm partner Allison Bowers notes, “We are extremely proud of the Firm and Shannon for achieving this recognition. It is humbling to have our hard work and dedication to our clients honored.” Benchmark Litigation identifies the leading U.S. trial attorneys and firms at the local and national levels. The rankings and editorials are the result of the extensive interviews with private practice lawyers and in-house counsel. The guide’s “Stars” are named based on peer and client recognition as top trial attorneys.

Join Us for a Panel Discussion on the Texas Anti-SLAPP Law at UT Law’s Technology Conference

2022-02-07T14:04:17Z

Join Us for a Panel Discussion on the Texas Anti-SLAPP Law at UT Law’s Technology Conference

April 2019 The University of Texas Law School’s 2019 Technology Law Conference will feature a panel discussion about the Texas Citizen’s Participation Act with Shannon Hutcheson, Judge Lee Yeakel of the Western District of Texas, and former Justice Scott Field. The discussion is entitled, “The TCPA: Still “Crazy” After All These (Seven) Years,” and will include the latest 2019 Texas legislative updates on the anti-SLAPP law. The Texas Citizen’s Participation Act (TCPA), which is the Texas anti-SLAPP law, is the latest mechanism that is being used to dismiss all kinds of lawsuits, including cases involving theft of trade secrets and violations of non-competition and non-solicitation agreements. And, these dismissals often come with a hefty attorneys’ fee award for the other side. The panel will discuss the background of the TCPA, review recent caselaw developments in both state and federal courts, and consider the TCPA’s impact on commercial litigation in the future. Hutcheson Bowers has handled multiple TCPA motions, both at trial and on appeal. The Technology Law Conference is on May 23-24, 2019 at the Four Seasons Hotel in Austin, Texas.

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Allison Bowers to Speak at 2018 National Association of Legal Search Consultants Annual Conference

2022-02-07T14:04:32Z

Allison Bowers to Speak at 2018 National Association of Legal Search Consultants Annual Conference

February 2018 Allison Bowers will be part of a panel discussion at the 2018 National Association of Legal Search Consultants (NALSC) Annual Conference. Employment laws are changing at a rapid pace and major developments are happening every year. This panel will explore some of the latest key trends regarding prohibitions on salary discussions now in effect in many states, the equal pay law, potential liability for failure to hire after a positive drug test, & making hiring decisions based on social media profiling. It will be timely, relevant and a must-attend session to help recruiters stay current in a constantly changing and challenging area of the law. NALSC’s Annual Conference will be held April 12-14, 2018 at the J.W. Marriott in beautiful Austin, Texas. The NALSC is the national professional organization for the legal search profession and is committed to upholding the highest ethical standards in the field. To provide an effective forum for dialogue among legal recruiters and develop consistent standards within the industry, NALSC was founded in 1984 by a group of the nation’s leading legal search experts. NALSC’s primary goal continues to be elevation of the professionalism of the field by establishing a standard of ethical business conduct. Today, NALSC members agree to abide by the NALSC Code of Ethics®. NALSC also provides an educational forum for members and for the legal and business community, and allows NALSC members to learn and socialize together. Read more about NALSC: https://www.nalsc.org/

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