The DOL’s proposed rule primarily deals with Section 13(a)(1) of the FLSA, which exempts from the minimum wage and overtime pay requirements “any employee employed in a bona fide executive, administrative, or professional capacity” (the “white-collar exemption”).

To qualify for the white-collar exemption each of the following tests must be met:

1. The salary-basis test: The employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed;
2. The salary-level test: The amount of salary paid must meet a minimum specified amount (currently $684 per week, or $36,568 per year); and
3. The duties-test: The employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations.

The proposed rule would revise the FLSA regulations to:

• Increase the FLSA regulations’ standard salary level from $684 per week ($35,568 per year) to $1,059 per week ($55,068 per year); 
• Increase the total annual compensation requirement for highly compensated employees from $107,432 per year to $143,988 per year;
• Restore overtime protections for U.S. territories, ensuring workers in those territories where the FLSA minimum wage applies have the same overtime protections as other U.S. workers; and 
• Automatically update earnings thresholds every three years so they keep pace with changes in worker salaries, ensuring that employers could adapt more easily because they would know when salary updates would happen and how they would be calculated.

The proposed rule would, however, not make changes to the FLSA’s “duties test” for determining overtime eligibility.

In a News Release, the DOL stated that the rule would “restore and extend” overtime protections. While an increase in the salary threshold is perhaps unavoidable and even necessary, the change undoubtedly will burden employers across a wide range of industries.

We do not expect that the proposed rule will go without challenge. Notably, this proposal follows in the path of the Obama administration, which sought to raise the overtime cutoff for most salaried employees to $47,500, but was blocked by a federal judge.

Once published to the federal register, the proposed rule will be open to comment for 60 days. Given the impact to employers, we are closely monitoring this issue for any updates or changes that may arise.

We are monitoring employment law trends on Capitol Hill and across the nation. Subscribe to stay up-to-date with the legal developments that will most impact your company in the months to come. If you have any questions concerning the FLSA or the proposed rule, please contact a member of the Kelley Drye Labor and Employment team.

Tuesday, November 8, 2022 at 12:30pm ET

This webinar will cover:

• Weapons and techniques fraudsters use to infiltrate company systems and current scam trends
• Proactive best practices for fraud and information theft prevention
• E! true HR stories: theft, lawsuits, and the one simple move that would have stopped it all
• What to do when the perpetrators are in-house

While these predictions have not yet come to fruition, the FTC recently expanded its non-compete enforcement into an area that caught many by surprise – non-compete provisions executed in conjunction with a business sale. Most who follow this area of the law can be forgiven for not seeing this issue on the horizon, as the fanfare regarding President Biden’s EO mainly focused on non-competes in the employer-employee context. In fact, employer-employee provisions have been an enforcement strategy of state legislatures and attorneys general for the past several years. Few, if any, discussed these agreements as part of business deals.

This is because non-compete provisions in connection with a business sale have traditionally been viewed as a business necessity and not a mechanism that impedes on worker mobility. This concept is so commonly accepted that even California, the state that literally outlawed non-compete agreements, carved out a limited exemption for the “sale of goodwill of business or ownership interest.” See Cal. Bus. & Prof. Code §16601.

The rational for this exemption is clear – as part of any business transaction, a business owner is selling their goodwill built up through years of operating their business. They have a customer and client base that provide the business with a revenue stream, without which the business would be valueless. The owner sells that goodwill, and then agrees not to compete with the buyer so that they can realize the benefit of purchasing that goodwill. This is all factored into the purchase price of the transaction. This makes business sense for both buyers and sellers.

THE ARKO TRANSACTION

Not so fast, says the FTC. This past June, the FTC published an administrative complaint taking action concerning a $94 million dollar transaction wherein a purchaser acquired 60 retail gasoline stations from the Corrigan Oil Company (“Corrigan”). Specifically, the FTC took issue with the non-compete provision included in the purchase agreement that restricted Corrigan from opening competing locations not only around the 60 locations being purchased, but also another 190 locations already owned by the purchaser. The FTC alleged that, by agreeing to this provision, there was a reduction in market participants in several local markets in Michigan. The FTC also alleged that, but-for the non-compete provision, “Corrigan … could have otherwise competed with retail fuel stations owned, leased, or operated by [purchasers] and other competitors in each of those areas.”

Ultimately, the parties and the FTC entered into a consent decree whereby the purchaser agreed to a number of remedies, most significant of which were:

1. Returning five of the acquired retail locations to Corrigan;
2. Limiting the non-compete provision for Corrigan to be no more than three years from the acquisition date, and no more than a three-mile radius from the actual acquired retail locations (not the 190 locations originally agreed upon);
3. For a period of 10 years, the purchaser must seek prior approval of the FTC before acquiring any retail fuel outlet within three miles of the locations returned to Corrigan; and
4. The purchaser will not enter into, or enforce, any non-compete agreement related to acquisitions that would serve to restrict competition solely around a fuel business already owned or operated by the purchasers.

In a press release issued by FTC Chair Lina Khan, the FTC acknowledged that non-compete provisions are necessary in protecting legitimate business interests, including “goodwill acquired in a transaction.” However, Chair Khan took the position that “a noncompete that limits prospects for reentry may in certain instances reflect that goodwill, if appropriately limited in geographic scope and duration.”

Against this backdrop, Chair Khan explained that the non-compete provisions in the ARKO transaction were “overbroad and facially unrelated to protecting any goodwill” the purchaser would hope to acquire. Rather, Chair Khan took the position that these non-compete provisions were drafted to ensure the purchaser “would not face direct or indirect competition from Corrigan … even in geographic areas far from the acquired stations.”

In doing so, Chair Khan drew a firm line in the sand – non-compete provisions that appear to go beyond the protectable goodwill in a transaction will be deemed overbroad and in violation of relevant FTC law.

TAKEAWAYS

Buyers, sellers, and the counsel and advisors who work with them, must take notice of this new FTC enforcement focus. This is not solely a legal concern that must be negotiated on the back-end of a purchase agreement – this is a decision that can affect the very purchase price of a transaction. If a purchaser is limited in how they protect their goodwill, this will necessarily be reflected in the purchase price.

That being said, practitioners will be well-served to draft non-compete provisions in sales agreements using one of the overarching themes that are seen with employer-employee agreements – ensuring the provision is only so broad as to incorporate a protectable interest, here, the goodwill being purchased.

This means the non-compete provision should be reasonable in scope and duration, and should only apply to assets that are actually being acquired in the transaction. The parties should also document to the greatest extent possible the goodwill being exchanged, so that there is no question about the value. While it’s unclear how the FTC will continue to alter the non-compete landscape, drafting provisions in accordance with this decision will certainly go far in avoiding scrutiny.

Employers and business owners should also be on the look-out for new rules coming from the FTC in this area, with the possibility of new restrictions as early as September.

In a move that comes as no surprise, the EEOC has updated its COVID-19 technical assistance to provide guidance on when COVID-19 may be considered a “disability” under the ADA, making specific reference to the DOJ/HHS guidance discussed in the original blog below. The EEOC’s technical assistance focuses “more broadly on COVID-19” beyond just “long COVID,” and does so “in the context of Title I of the ADA and section 501 of the Rehabilitation Act, which cover employment.” However, the EEOC’s guidance clearly echoes the DOH/HHS guidance and states that long COVID or sustained symptoms of COVID may be a “disability” under the law.

In many states, long COVID could also qualify as a disability under state laws. So, employers should be ready for more claims into the future, even when the pandemic (finally) ends – from employees who suffer symptoms of COVID as a chronic illness.

THE GUIDANCE

What is Long COVID and when is it a disability?

The EEOC has reemphasized that determining whether COVID may be considered a “disability” under the law is a fact-intensive question, requiring an analysis of the extent to which COVID’s symptoms, its long-term effects, or the manner in which it exacerbated the symptoms of another condition “substantially limit a major life activity,” as discussed in the original blog below. This means that an individual suffering, even intermittently, from certain symptoms relating to long COVID can be considered to be “disabled” under the law.

The EEOC provides several examples of these impairments, including: “brain fog” and difficulty remembering or concentrating; substantially limited respiratory function; chest pains; or intestinal pain.

Importantly, the EEOC distinguishes these “substantially limiting” conditions from less-serious symptoms, such as “congestion, sore throat, fever, headaches, and/or gastrointestinal discomfort, which resolve within several weeks,” which would not create a “disability.” But make no mistake: even these relatively insignificant symptoms may constitute a disability if they last or are expected to last for a significant period of time (i.e. more than six months).

According to the guidance, while long COVID “does not automatically qualify as a disability,” as with any disability inquiry, an employer is obligated to engage cooperatively with an ailing employee to conduct an “individualized assessment” and determine whether that employee’s long COVID symptoms constitute physical or mental impairments that substantially limit one or more major life activities.

The guidance emphasizes that the symptoms need not necessarily manifest physically—long COVID may substantially effect an individual’s psychological or emotional wellbeing to the point that an accommodation may be required.

What You Can and Cannot Do

Thankfully, the EEOC has not issued employees with long COVID a ticket not to do their jobs.

Not wanting employers to lose sight of the bigger picture, the EEOC also clarified that taking an adverse action against an employee disabled due to COVID-19 does not automatically mean that the action to discriminatory. Rather, an employer may have legitimate, non-discriminatory reasons for having undertaken the adverse action. The EEOC points to the circumstance in which the affected employee was no longer able to perform their job duties at all due to the disability. Additionally, the EEOC states that “the ADA’S ‘direct threat’ defense could permit an employer to require an employee with COVID-19 or its symptoms to refrain from physically entering the workplace during the CDC-recommended period of isolation, due to the significant risk of substantial harm to the health of others.”

In sum, the EEOC’s guidance is concordant with the DOJ/HHS guidance we discussed back in August. But don’t let the blog’s focus on long COVID distract from the larger point that any COVID-19 infection, including active infections, may constitute a “disability” under Title I of the ADA depending on the severity and duration of the symptoms. As we said, each employee brings their own set of facts that require an individualized analysis. For prompt answers to your fact-intensive COVID-19 questions, contact Kelley Drye.

ORIGINAL BLOG: August 5, 2021

It seems that at every turn, COVID-19 is keeping employers from catching their breath. We’ve discussed on this blog how employers should navigate having employees work from home, reopening and remaining compliant with the law and CDC guidelines, mask and vaccine mandates, and what to do when an employee tests positive for the virus. Now another issue confronts employers: how to best accommodate employees who are suffering from COVID symptoms months after having been infected with the virus—long COVID.

What Employers Should Know

The guidance, just like our understanding of long COVID, is frustratingly vague. The silver lining is that any employer already sensitive to the accommodation needs of its employees is already well-positioned to account for the needs of employees with long COVID symptoms. Employers should not fall prey to tunnel vision and determine whether an employee’s symptoms are due to COVID per se.

Rather, they must stay focused on the fundamental question: are these symptoms substantially limiting my employee’s ability to perform their job?

As with any medical condition, the substance of an ensuing “cooperative dialogue” between employer and employee may vary greatly depending on the employee’s duties, their symptoms, and the advice they receive from their medical care providers. Of course, any employer may make the reasonable request that an employee provide a doctor’s note in order to substantiate a request for an accommodation under the ADA, but simply making that request of an employee does not absolve an employer from making reasonable efforts to engage with that employee to determine what accommodations, if any, are available.

Planning for the Future

Employers should also anticipate ongoing and evolving accommodation discussions, particularly if the employee is in fact a COVID “long-hauler.” The long-term effects of a COVID infection are still not fully understood, and the best-prepared employer is the one ready to adapt to an employee’s needs not only reasonably, but also rapidly.

That can mean a few different things.

• DOCUMENT. It will be crucial for anyone performing a human resources function to (securely) memorialize the substance of every discussion regarding an employee’s requests for accommodation. At the same time, be sure to sequester and secure any medical records, and work to ensure confidentiality.
• ASSESS REGULARLY. As so little is known about long COVID, and because symptoms may suddenly lessen or become more severe in time, employers should require affected employees to agree upon pre-determined “check-in” meetings. At a specific date in the future, employer and employee might reconvene to reassess what further (or fewer) accommodations the employee could require. This is a sensitive issue, however, and is best done in concert with qualified legal counsel.
• BE FLEXIBLE. If an employee requires an accommodation for long COVID, be flexible in addressing their requests. Consider whether you can grant the accommodations, and document why you can or cannot. Finally, before denying an accommodation, be sure that there is now reasonable way that the accommodation may be granted.

DOL Guidance The DOL released its guidance on April 14, 2021 in three pieces. The first piece, “Tips for Hiring a Service Provider,” is aimed at assisting plan sponsors and fiduciaries in choosing service providers with robust cybersecurity practices. The initial guidance makes clear that the DOL considers the management of cybersecurity risk – including the scrutinizing of service providers’ cybersecurity policies and practices – to be part of a fiduciary’s duties. The tips include:

• Making sure that contracts with service providers require their ongoing compliance with cybersecurity and information security standards, and being wary of provisions that limit the service provider’s responsibility for IT security breaches;
• Looking for contract provisions that give plan sponsors and fiduciaries the right to review the service provider’s audit results demonstrating compliance with industry security standards;
• Examining the service provider’s track record in the industry, including public information regarding information security incidents;
• Inquiring as to any past security breaches, how they came about, and how the service provider responded; and
• Finding out whether the service provider has any insurance policies that would cover losses caused by cybersecurity and identity theft breaches, whether internal or external.

The second piece of guidance, “Cybersecurity Program Best Practices,” advises plan fiduciaries and record-keepers on their responsibilities to manage cybersecurity risks. These include:

• Conducting prudent annual risk assessments;
• Conducting periodic cybersecurity awareness training for employees;
• Having an effective business resiliency program addressing business continuity, disaster recovery, and incident response in the event of disruption due to a security incident; and
• Encrypting sensitive data, both stored and in transit.

The third piece of guidance, “Online Security Tips,” is directed at plan participants and beneficiaries who check or manage their retirement accounts online and includes such tips as:

• Using strong and unique passwords;
• Using multi-factor authentication;
• Recognizing phishing attacks; and
• Using antivirus software.

Audit Initiative The type of documentation that the DOL has requested as part of its recent audits is quite comprehensive, including basically all information and documentation that an organization has relating to its information security systems. A few examples of such requests include:

• All policies, procedures, or guidelines relating to:
  • Data governance, classification, and disposal
  • The implementation of access controls and identity management, including any use of multi-factor authentication
  • The processes for business continuity, disaster recovery, and incident response
  • The assessment of security risks
  • Data privacy
  • Management of vendors and third party service providers, including notification protocols for cybersecurity events and the use of data for any purpose other than the direct performance of their duties
  • Cybersecurity awareness training
  • Encryption to protect all sensitive information transmitted, stored, or in transit.
• All documents and communications relating to any past cybersecurity incidents.
• All documents and communications from service providers regarding policies and procedures for collecting, storing, archiving, deleting, anonymizing, warehousing, and sharing data.
• All documents and communications describing the permitted uses of data by the sponsor of the plan or by any service providers of the plan, including, but not limited to, all uses of data for the direct or indirect purpose of cross-selling or marketing products and services.

Furthermore, plan sponsors and fiduciaries should look into the cybersecurity practices of their service providers and, where necessary, implement the recommendations in the DOL guidance pertaining to their contracts with their service providers. For example, they should ensure that the contracts include provisions requiring the service provider to obtain annual third-party audits to determine compliance with information security policies and procedures, to provide notification within a specified timeframe in the event of any cyber incident or data breach, to cooperate to investigate and address the cause of the breach, and to obtain some form of cyber liability insurance coverage.

Employers might also consider reminding their employees of the importance of protecting their retirement plan accounts using the guidance in the DOL’s “Online Security Tips.”

If you have any questions about the DOL’s cybersecurity guidance, would like assistance in implementing best practices, or need help in responding to an audit, please contact a member of our Employee Benefits Group.

Employers implementing mandatory COVID-19 vaccination programs are no doubt starting to feel the pressure resulting from an influx of religious and disability accommodation requests. In all the internal commotion (and resulting strain on human resources departments), employers must remember that failing to implement an adequate process for evaluating and responding to accommodation requests can have real legal consequences.

An action just filed in the U.S. District Court for the District of Massachusetts illustrates just this point. See, Together Employees et al. v. Mass General Brigham Inc., case number 1:21-cv-11686. Mass General, the hospital network employer in that case, implemented a mandatory vaccination program, announcing that employees who failed to receive the vaccination would be placed on unpaid leave and, ultimately, could be terminated. The hospital network, as the EEOC recommends, invited employees to apply for medical and/or religious exemptions.

According to the complaint, the lawsuit arises from the hospital’s decision to deny the exemption requests of 229 employees. The plaintiff Together Employees, an unincorporated association of the impacted employees, seeks injunctive relief, claiming that the hospital did not really analyze their requests, and engaged in a wholesale denial of accommodations without any showing of undue hardship by Mass General. The employees allege that the hospital network’s accommodations process was designed to hinder employees from adequately supporting their requests for an accommodation, resulting in denials for almost all who applied. Among other issues with the process, the employees claim that the forms did not give them space to explain the need for the exemption, or allow them to attach supporting documentation.

This case was just filed and the employer has not responded. So, there is no way to know whether these allegations are true. That said, the complaint highlights the fact that simply paying lip service to the accommodations process will leave employers wide open to legal challenges. Employers should avoid taking a mechanized approach to accommodation requests, and should instead, meaningfully evaluate each request based upon the employee's individual circumstances. Even in the face of a deluge of accommodation requests, it is always the employer’s obligation to determine whether the requested accommodation truly poses a direct threat or undue burden to the business, and whether an alternative accommodation exists.

This does not mean that accommodation requests cannot be denied based upon an individual’s job duties, the amount that they interact with patients and the public, or other factors which demonstrate that their remaining unvaccinated will pose an unreasonable risk. However, the denials must be fact-based and objective. And, if there are employees who can do their jobs without those interactions, and thus can be accommodated, then exemptions may have to be granted.

In other words, the employer needs to evaluate each request individually, and have a record of the reasons the accommodation was denied.

Update

In a preliminary hearing held on Wednesday, October 21, 2021, Chief U.S. District Judge F. Dennis Saylor IV declined to enjoin Mass General’s plan to suspend unvaccinated workers. The denial was without prejudice, and a follow-up hearing was set for November 2, 2021, in order to review the details of the hospital's accommodation process and the workers' various claims. The next hearing comes just three days before the suspended unvaccinated workers will be terminated under the hospital’s policy. During the proceeding the judge commented that the workers would be faced with the cost of “the consequences of living with one's choices.” And so it would appear the Court has no patience for the workers’ challenge, however, whether the Court will reverse course at the November 2nd hearing remains to be seen.

As always, Kelley Drye will continue to monitor the progress this case and provide updates related to any further developments. In the interim, if you have any questions about mandatory vaccination programs or accommodations, please reach out to Kelley Drye & Warren LLP.

Top 10 Takeaways from Federal Contractor and Subcontractor Vaccine Mandate

Following the issuance of the federal contractor vaccine mandate contained in Executive Order 14042 (“the E.O.”), the Safer Federal Workforce Task Force (“Task Force”) led by the White House COVID-19 Response Team issued guidance (“the Guidance”) implementing the E.O. with respect to federal government contractors on September 24th. Importantly, the Task Force’s website also includes “Frequently Asked Questions” providing additional guidance to federal contractors on implementing the E.O, and requiring monitoring by contractor compliance personnel.

On September 30th, the Federal Acquisition Regulatory Council issued a contract clause requiring contractors and subcontractors at any tier to comply with the guidance published by the Task Force and recommended that federal agency acquisition offices exercise their authority to develop Federal Acquisition Regulation (“FAR”) deviation clauses implementing the Task Force’s guidance. The Civilian Agency Acquisition Council, Department of Defense, and General Services Administration have issued class deviation clauses as well incorporating the Task Force’s guidance.

Covered contractors must immediately be prepared to implement the Task Force Guidance. This alert summarizes the top takeaways for government contractors in this rapidly developing area:

1. Bottom Line

2. Timing

• In new federal contracts or contract-like instruments awarded on or after November 14, 2021;
• In existing contracts for which options are exercised or extensions are issued;
• In new solicitations issued on or after October 15, 2021, and contracts awarded pursuant to those solicitations (this includes new solicitations issued on or after October 15, 2021 for orders awarded pursuant to those solicitations under existing indefinite-delivery contracts).

3. Covered Contractors

4. Inapplicable to Certain Contracts and Grantees

• Grants.
• contracts or subcontracts below the simplified acquisition threshold, currently $250,000 (however, the Guidance encourages agencies to incorporate clauses requiring compliance with the Guidance into contracts under the threshold).
• contracts or agreements with Indian Tribes.
• contracts if performance is outside the United States or its outlying areas.

5. Applicable to Certain Supply Contracts

However, significantly the GSA class deviation will require contracting officers to incorporate the FAR clause in all new and existing Federal Supply Schedule (“FSS”) contracts above the micro-purchase threshold, including contracts that are solely for products. The GSA stated that it is not administratively feasible to distinguish FSS contracts that are solely for products from FSS contracts that are primarily for products but also include ancillary-type services (e.g., installation, maintenance, training, ancillary services acquired via the Order-Level Materials SIN, etc.). As a result of GSA’s deviation, the clause will be included in Schedule Contracts, many Blanket Purchase Agreements (BPAs), Government-wide Acquisition Contracts (GWACs), Multi-Agency Contracts (MACs), and Agency-specific indefinite delivery, indefinite quantity (IDIQ) contracts, including those exclusively for products.

As the Task Force suggested, other agencies and contracting officers will likely incorporate the clause and its vaccine requirement in contracts for products as well. As a result, at this time, generally the mandate does not extend to contractors or subcontractors only providing products if they fall outside of the GSA deviation. Moreover, this issue remains subject to change because, although the Guidance excluded contracts and subcontracts “for the manufacturing of products” from the mandate and the E.O. exempted subcontracts “solely” for the provision of products, the Task Force guidance strongly encourages agencies to incorporate the clause into contracts that are solely for products.

6. Scope of Coverage for Employees Working on or in Connection with a Covered Contract

7. Scope of Coverage Applies to Employees Working at a Covered Worksite

8. Determining if a Worker is Fully Vaccinated

9. Masking and Social Distancing Requirements in Addition to Vaccination

10. Continued Monitoring Required

Actions to Take

• Designate a person(s) to coordinate COVID-19 workplace safety and monitor compliance with the mandate and implementing clauses.
• Monitor the Task Force Guidance, FAQs (which are being updated), and solicitation and contract clauses in all contract instruments as these are rapidly developing.
• Evaluate your worksites to determine which sites and employees are covered by the mandate.
• Ensure that adequate policies and procedures are in place to mitigate risks associated with non-compliance with the contract clauses.
• Establish a mechanism to document compliance with mandate.
• Establish a mechanism to securely collect vaccination information and documentation from employees.
• Establish a communications plan to inform employees of the mandatory vaccine requirement.
• Establish policies and determine consequences for employees refusing vaccination.

In a move that comes as no surprise, the EEOC has updated its COVID-19 technical assistance to provide guidance on when COVID-19 may be considered a “disability” under the ADA, making specific reference to the DOJ/HHS guidance discussed in the original blog below. The EEOC’s technical assistance focuses “more broadly on COVID-19” beyond just “long COVID,” and does so “in the context of Title I of the ADA and section 501 of the Rehabilitation Act, which cover employment.” However, the EEOC’s guidance clearly echoes the DOH/HHS guidance and states that long COVID or sustained symptoms of COVID may be a “disability” under the law.

In many states, long COVID could also qualify as a disability under state laws. So, employers should be ready for more claims into the future, even when the pandemic (finally) ends – from employees who suffer symptoms of COVID as a chronic illness.

THE GUIDANCE

What is Long COVID and when is it a disability?

The EEOC has reemphasized that determining whether COVID may be considered a “disability” under the law is a fact-intensive question, requiring an analysis of the extent to which COVID’s symptoms, its long-term effects, or the manner in which it exacerbated the symptoms of another condition “substantially limit a major life activity,” as discussed in the original blog below. This means that an individual suffering, even intermittently, from certain symptoms relating to long COVID can be considered to be “disabled” under the law.

The EEOC provides several examples of these impairments, including: “brain fog” and difficulty remembering or concentrating; substantially limited respiratory function; chest pains; or intestinal pain.

Importantly, the EEOC distinguishes these “substantially limiting” conditions from less-serious symptoms, such as “congestion, sore throat, fever, headaches, and/or gastrointestinal discomfort, which resolve within several weeks,” which would not create a “disability.” But make no mistake: even these relatively insignificant symptoms may constitute a disability if they last or are expected to last for a significant period of time (i.e. more than six months).

According to the guidance, while long COVID “does not automatically qualify as a disability,” as with any disability inquiry, an employer is obligated to engage cooperatively with an ailing employee to conduct an “individualized assessment” and determine whether that employee’s long COVID symptoms constitute physical or mental impairments that substantially limit one or more major life activities.

The guidance emphasizes that the symptoms need not necessarily manifest physically—long COVID may substantially effect an individual’s psychological or emotional wellbeing to the point that an accommodation may be required.

What You Can and Cannot Do

Thankfully, the EEOC has not issued employees with long COVID a ticket not to do their jobs.

Not wanting employers to lose sight of the bigger picture, the EEOC also clarified that taking an adverse action against an employee disabled due to COVID-19 does not automatically mean that the action to discriminatory. Rather, an employer may have legitimate, non-discriminatory reasons for having undertaken the adverse action. The EEOC points to the circumstance in which the affected employee was no longer able to perform their job duties at all due to the disability. Additionally, the EEOC states that “the ADA’S ‘direct threat’ defense could permit an employer to require an employee with COVID-19 or its symptoms to refrain from physically entering the workplace during the CDC-recommended period of isolation, due to the significant risk of substantial harm to the health of others.”

In sum, the EEOC’s guidance is concordant with the DOJ/HHS guidance we discussed back in August. But don’t let the blog’s focus on long COVID distract from the larger point that any COVID-19 infection, including active infections, may constitute a “disability” under Title I of the ADA depending on the severity and duration of the symptoms. As we said, each employee brings their own set of facts that require an individualized analysis. For prompt answers to your fact-intensive COVID-19 questions, contact Kelley Drye.

ORIGINAL BLOG: August 5, 2021

It seems that at every turn, COVID-19 is keeping employers from catching their breath. We’ve discussed on this blog how employers should navigate having employees work from home, reopening and remaining compliant with the law and CDC guidelines, mask and vaccine mandates, and what to do when an employee tests positive for the virus. Now another issue confronts employers: how to best accommodate employees who are suffering from COVID symptoms months after having been infected with the virus—long COVID.

What Employers Should Know

The guidance, just like our understanding of long COVID, is frustratingly vague. The silver lining is that any employer already sensitive to the accommodation needs of its employees is already well-positioned to account for the needs of employees with long COVID symptoms. Employers should not fall prey to tunnel vision and determine whether an employee’s symptoms are due to COVID per se.

Rather, they must stay focused on the fundamental question: are these symptoms substantially limiting my employee’s ability to perform their job?

As with any medical condition, the substance of an ensuing “cooperative dialogue” between employer and employee may vary greatly depending on the employee’s duties, their symptoms, and the advice they receive from their medical care providers. Of course, any employer may make the reasonable request that an employee provide a doctor’s note in order to substantiate a request for an accommodation under the ADA, but simply making that request of an employee does not absolve an employer from making reasonable efforts to engage with that employee to determine what accommodations, if any, are available.

Planning for the Future

Employers should also anticipate ongoing and evolving accommodation discussions, particularly if the employee is in fact a COVID “long-hauler.” The long-term effects of a COVID infection are still not fully understood, and the best-prepared employer is the one ready to adapt to an employee’s needs not only reasonably, but also rapidly.

That can mean a few different things.

• DOCUMENT. It will be crucial for anyone performing a human resources function to (securely) memorialize the substance of every discussion regarding an employee’s requests for accommodation. At the same time, be sure to sequester and secure any medical records, and work to ensure confidentiality.
• ASSESS REGULARLY. As so little is known about long COVID, and because symptoms may suddenly lessen or become more severe in time, employers should require affected employees to agree upon pre-determined “check-in” meetings. At a specific date in the future, employer and employee might reconvene to reassess what further (or fewer) accommodations the employee could require. This is a sensitive issue, however, and is best done in concert with qualified legal counsel.
• BE FLEXIBLE. If an employee requires an accommodation for long COVID, be flexible in addressing their requests. Consider whether you can grant the accommodations, and document why you can or cannot. Finally, before denying an accommodation, be sure that there is now reasonable way that the accommodation may be granted.

Travelers will not be eligible for New York COVID-19 paid sick leave benefits if they engage in non-essential travel to the states with high infection rates.

See our coverage of the original travel advisory here.

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JOIN US: TUESDAY, JULY 21, 2020","12:30PM EST<\/h4>\nFour months ago, the Dow was close to 30,000, employment rates were at historic highs, the coronavirus was still “novel,” and millions had not yet taken to the streets in global protests against police brutality and racial inequality. The workplace we now return to exists in this supercharged social and political climate, with new rules, laws, risks, and social issues creating new and uncharted waters for employers to navigate.\n\nJoin Kelley Drye’s

Among the updates, the EEOC provides Q&A guidance regarding: requests for accommodation (Q&A D.13, G.7); pandemic-related harassment in the context of telework (Q&A E.4); return to work guidance (Q&A G.6, G.7); and other questions related to age discrimination (Q&A H.1), pregnancy discrimination (Q&A J.1), and sex discrimination involving employees with caretaking or family responsibilities (Q&A I.1).

The EEOC also touches on an issue that all employers will undoubtedly face as employees return to work, namely, whether an accommodation is required for an employee who is not disabled, but whose family member may be at high risk for contracting COVID-19 due to an underlying condition. The EEOC’s June 11 Q&A D.13 states:

Is an employee entitled to an accommodation under the ADA in order to avoid exposing a family member who is at higher risk of severe illness from COVID-19 due to an underlying medical condition?

No. Although the ADA prohibits discrimination based on association with an individual with a disability, that protection is limited to disparate treatment or harassment. The ADA does not require that an employer accommodate an employee without a disability based on the disability-related needs of a family member or other person with whom she is associated.

For example, an employee without a disability is not entitled under the ADA to telework as an accommodation in order to protect a family member with a disability from potential COVID-19 exposure.

Of course, an employer is free to provide such flexibilities if it chooses to do so. An employer choosing to offer additional flexibilities beyond what the law requires should be careful not to engage in disparate treatment on a protected EEO basis.

Kelley Drye will continue to stay up to date on federal and state guidance that will impact your return to work considerations. As always, please reach out to your Kelley Drye professional for advice on these and other matters.

Below is a summary of key points:

• The regulations caution that employers should be judicious when using the definition to exempt healthcare providers and emergency responders from leave.
  • “Quarantine” order includes quarantine, isolation, containment, shelter-in-place, or stay-at-home orders issued by a federal, state, or local government causing an employee to be unable to work.
• Notably, an employee subject to one of these orders cannot take paid sick leave where the employer does not have work for the employee (i.e. the employer suffered a downturn in business due to COVID-19 and stay-at-home orders).
• “Seeking a medical diagnosis” for purposes of paid sick leave, includes time spent making, waiting for, or attending an appointment for a test for COVID-19.
  • Employers should require employees to provide the name of the healthcare provider advising self-isolation.
  • However, if an individual is self-quarantining and teleworking, he or she is not eligible for paid sick leave.
• For those seeking leave to care for a child due to school closure or because a childcare provider is unavailable, the employer can require the employee to provide:
  • The name of the child being cared for;
  • The name of school or provider that has closed or is unavailable;
  • A statement that no other suitable person can care for the child.
• Documentation of any leave, whether oral or written statements from the employee, should be maintained for four years.
• EPSL and EFMLEA may be taken intermittently as long as the employer and employee agree; absent agreement, no leave under FFCRA may be taken intermittently.
• For part-time employees who have varying schedules throughout the work week, the number of paid sick leave hours must be:
  • Fourteen times the average number of hours the employee was scheduled to work per calendar day, over a 6 month period (or the entire period of employment, if employed less than 6 months).

Please give us a call if you have any questions regarding the regulations and any specific scenarios related to your workforce.

• The Senate did not make any further changes to the House-passed bill, meaning it will be sent to President Trump for his signature
• The bill (including “technical corrections”) previously passed by the House will institute free coronavirus testing, establish paid leave policies, enhance Unemployment Insurance, expand food security initiatives, and increase federal Medicaid funding
• A House Appropriations Committee summary is here and a backgrounder on the new paid leave provisions is here
• Congressional passage of this second coronavirus response measures follows an initial $8.3 billion package enacted earlier this month (see yesterday’s update for more information)

“I think the idea that the NDA is always a terrible thing is frankly a mistake," stated Barbara, because "there are legitimate business uses on the company side." On the topic of abuse, Barbara further explained that “no company can force you to sign it. That’s the bottom line. I mean, particularly in today’s world. No one can force you to settle. If you want to fight it, you could go and fight it. Everyone has the choice. Unfortunately, finances, I think, are probably the biggest issue."

Click here to view the interview.

On Wednesday, December 4th, Barbara Hoey, Co-Chair of Kelley Drye’s Labor and Employment Practice and David Frulla, Chair of the firm’s Campaign Finance and Political Law Practice hosted a one hour webinar focused on best practices of handling all aspects of politics in the workplace. They reviewed federal and state rules regarding employees' political activity and speech in the workplace, and compliance issues related to federal campaign finance laws when a company or its executives engage in political activity. Additional topics covered include:

• Political statements on social media,
• When talking politics can turn into discrimination and harassment,
• Corporate partisan and non-partisan political communications,
• Employee volunteer activity, and
• Do's and don'ts for executive fundraising.

Well, maybe it is criminal. The recent charges filed by the United States Attorneys’ Office in the Southern District of New York against celebrity attorney Michael Avenatti highlight the lines that both management and plaintiff’s attorneys need to be aware of during communications involving threats of litigation.

On March 25, 2019, Mr. Avenatti was charged with various counts of extortion and conspiracy to extort in connection with his communications to Nike attorneys about a claim that a client of his had relating to allegations of misconduct by Nike employees. Specifically, Mr. Avenatti threatened to hold a press conference announcing the claims unless Nike acceded to his exorbitant demands of payment to him and his client, and his insistence that he and another attorney be paid to conduct an “investigation” into the matter for Nike. The indictment described that Mr. Avenatti required payment of $1.5 million for his client and that he be retained to conduct an internal investigation for between $15 and $25 million, or, that Nike pay him a total of $22.5 million to resolve claims of client and buy Avenatti’s silence.

So, what makes this “extortion?” The general rule is that threats of litigation, even if the claims are meritless and/or economically harmful, are not extortion. GI Holdings, Inc. v. Baron & Budd, 179 F.Supp. 2d 233 (S.D.N.Y. 2001); Building Industry Fund v. Local Union No. 3, Intern. Broth. of Elec. Workers, AFL-CIO, 992 F. Supp. 162, 176 (E.D.N.Y. 1996). The extortion line is crossed, however, when one “magnifies the risks to its adversary by corrupting the litigation in order to ‘get the price up.’” Chevron Corp. v. Donziger, 974 F.Supp. 2d 362, 580 (S.D.N.Y. 2014). Essentially, lying about the risk makes the communications extortionate because it creates leverage that “bears no proper nexus to any plausible claims that may have been asserted in the first place, and from which the victim has a right to be free.” Id.

Here, Mr. Avenatti likely crossed the line when he made repeated reference to the harm that going public with his client’s claims was going to cause Nike. The indictment states that Mr. Avenatti told Nike that if his demands were not met that he would “go take ten billion dollars off [Nike’s] market cap.” This out-sized amount was clearly meant to gain the “leverage” that the courts hold has no nexus to any plausible claim.

The Avenatti indictment is likely to check the tactics of even the boldest plaintiff’s counsel. Nevertheless, the lesson for employers is clear: the next time your company is faced with an out-sized threat of harm by an ambitious plaintiff’s counsel ask yourself if the harm claimed is proportionate to the allegations, and consider asking for counsel’s basis for his claim. If there is none, or the basis given is suspect, consider the possibility that you could be the victim of criminal extortion necessitating the involvement of the prosecutor’s office.

New York State On April 12, 2018, Governor Cuomo signed into law New York State’s newest anti-sexual harassment requirements, which will come into effect on October 9, 2018. For the first time, the state is mandating both a written policy and annual training for all employers.

New York City For employers operating within the five boroughs with 15 or more employees, effective April 1, 2019, these employers will have to comply with Mayor de Blasio’s Stop Sexual Harassment in New York City Act. Like the New York State legislation, this law requires employers to complete annual employee training on sexual harassment. There is no requirement in this law regarding a written policy.

To read the advisory on the Kelley Drye website, click here.

As you may recall, the maximum had been abruptly reduced earlier this year to $6,850 as a result of a change in the inflation adjustment calculations under the Tax Cuts and Jobs Act. The new IRS relief comes in response to reports of administrative and financial burdens triggered by the mid-year change, which left individuals, employers and administrators scrambling to respond as HSA participants who either had already made the maximum HSA contribution for 2018 or elected to make pre-tax HSA contributions based on the $6,900 limit faced potential tax penalties due to excess contributions.

Employers who have already adjusted deferral elections made under a cafeteria plan to reflect the inflation-adjusted $6,850 maximum need not take further action. However, individuals who receive distributions of excess HSA contributions based on the inflation-adjusted $6,850 maximum will have a choice to make as to whether they want to repay that amount to their HSAs, rely on an exclusion from gross income afforded to a return of excess contributions or, if attributable to employer contributions, apply the distribution to qualified medical expenses. Employers who sponsor a high deductible health plan may want to inform their employees of this issue either directly or through their relevant service providers.

To read the advisory on the Kelley Drye website, click here.

The new rules are not limited to disability plans. They also apply to any retirement plans, medical plans, and other welfare plans where a participant’s disability has an impact under the plan and the existence of a disability is not based on an independent party’s determination, such as, for example, where an employee’s disabled status references disability as determined by the Social Security Administration or another employee benefit plan (like a long-term disability plan).

Plan sponsors and administrators of ERISA plans that have a disability feature need to take action now to analyze their plan documents, including summary plan descriptions, administrative practices and procedures, and participant notices, to determine the applicability and impact of these new rules and what documentary and procedural changes are needed to ensure compliance with the new rules.

To read the advisory on the Kelley Drye website, click here.

Cadillac Tax The budget deal recently struck by Democrats and Republicans further delays, until 2022, the Cadillac Tax. As you recall, the tax, designed to impose a 40 percent tax on the cost of employer-sponsored health coverage over a threshold amount (e.g., $10,200 for individual coverage and $27,500 for family coverage, indexed to the CPI), was originally scheduled to go into effect in 2018. President Obama then signed into a law a two-year delay. That law further provided that the Cadillac Tax (if imposed) will be deductible. While bipartisan support exists for repealing the Cadillac Tax, there is no consensus on how to replace the lost revenue. As a result, employers should continue reviewing their health plans to assess whether future changes to avoid the tax may be required.

ACA Reporting Deadline and Good Faith Transition Relief Extended For employers subject to the ACA's 2017 information-reporting requirements, the due date for delivering the 2017 Form 1095-C or -B to employees was extended from January 31, 2018 to March 2, 2018. The deadline for filing the appropriate forms with the IRS was not changed; those forms must be mailed by February 28, 2018 or filed electronically by April 2, 2018. Updated 2017 forms and instructions are available on the IRS website.

Additionally, penalties will not be assessed for incomplete or incorrect information on the 2017 ACA forms, provided the forms are filed or furnished on time and completed in “good faith.” In determining good faith, the IRS will consider whether reasonable efforts were made to prepare for reporting and furnishing the required information and the extent to which an employer is taking steps to ensure that it can comply with next year’s reporting obligations. The IRS does not anticipate extending its transition relief (i.e., due dates or good-faith relief) to reporting for 2018.

To read the full advisory, click here.