IRC §162(m) limits a publicly held corporation’s ability to take a tax deduction for compensation paid to covered employees in excess of $1 million. As mentioned in our January 2018 Client Advisory, the Tax Cuts and Jobs Act (“Act”) repealed the exception to §162(m) for qualified performance-based compensation and expanded the applicability of §162(m)
Medical marijuana occupies a gray space within the United States. Marijuana is an illegal drug under federal law and is included on the Drug Enforcement Administrations’ Schedule I, along with heroin and LSD. The drugs on this schedule are considered to have “no currently accepted medical use and a high potential for abuse.” In spite of the federal prohibition, thirty states have passed some form of legislation allowing for the medical use of marijuana.
This conflict between state and federal law may cause employers confusion—especially in states with expansive disability protections. For example, the New Jersey Law Against Discrimination (“NJLAD”) which provides extensive protections for individuals with disabilities. The New Jersey Compassionate Use Medical Marijuana Act (“NJCUMMA”) supplements the NJLAD by stipulating that employees using marijuana for a medicinal purpose are considered to have a disability and such use is protected. These protections, of course, do not force employers to allow employees to use marijuana at work but do pose a dilemma when it comes to workplace drug testing. Many companies require employees to pass drug tests for federally prohibited narcotics. However, the NJLAD requires employers to provide reasonable accommodations to disabled individuals. Since the NJCUMMA classifies medical marijuana users as disabled, is a drug test a violation of their accommodations?…
While a slew of laws relating to sexual harassment are set to take effect in New York City and New York State this fall, the most imminent provision-applicable to all New York City employers-is set to take effect on September 6, 2018.
The provision requires all employers with employees working in New York City (regardless…
On Friday, July 27, after a 3 week trial in Manhattan, a jury awarded $1.25 million in damages to Enrichetta Ravina, a former professor at Columbia University Business School, who claimed that she was denied tenure and forced to resign in retaliation for complaining that a senior professor, Geert Bekaert, had sexually harassed her. Professor Bekaert will owe her $500,000 in punitive damages, and Columbia will owe $750,000 in punitive damages.
Ravina first prevailed Thursday on her retaliation claims against Bekaert and against Columbia based on his conduct. The jury also held Thursday that Bekaert, but not Columbia, could be held liable for punitive damages. Jurors rejected Ravina’s gender discrimination claims against both. The money verdicts then came in on Friday.
Interestingly, the jury found that there was no sexual harassment or gender discrimination. The verdict was on the retaliation claims. The jury also did not give the plaintiff the back pay and front pay she had sought. They awarded only punitive damages, against both defendants.…
In the decision rendered by the Supreme Court in Epic Systems Corp. v. Lewis, employers are able to enforce individual arbitration proceedings if arbitration was agreed to in an employment contract. Settling a Circuit split on the issue, the Supreme Court decision affirmed the Fifth Circuit holding in Murphy Oil, and remanded the Ninth and Seventh Circuit decisions in Ernst & Young, LLP v. Morris and Epic Systems Corp. v. Lewis. Justice Gorsuch, writing for the majority, found that “as a matter of law the answer is clear. [ . . . ] Congress has instructed federal courts to enforce arbitration agreements according to their terms–including terms providing for individualized proceedings.” (Epic Systems Corp. v. Lewis, 584 U.S. ___ (2018) (slip op., at 2).
The Court, when looking at the Arbitration Act and the National Labor Relations Act (“NLRA”), decided the two provisions could be read in harmony. “When confronted with two Acts of Congress allegedly touching on the same topic, this Court is not ‘at liberty to pick and choose among congressional enactments’ and must instead strive ‘to give effect to both.’” (Id., slip op. at 10) (quoting Morton v. Mancari, 417 U.S. 535, 551 (1974). The Court was unable to find any “clear and manifest” intent, as required by Morton, of Congress to displace the Arbitration Act with the NLRA.
The Court found that their holding was consistent with the prior decisions in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32 (1991) and NLRB v. Alternative Entertainment, Inc., 858 F. 3d 393, 413 (CA6 2017) finding that the Fair Labor Standards Act and Age Discrimination in Employment Act do not displace the Arbitration Act. The Court likened the employee’s theory to an “interpretive triple bank shot” that “raise[s] a judicial eyebrow.” (Epic Systems Corp., slip op., at 15). Justice Gorsuch also reminded the employees that Congress “does not, one might say, hide elephants in mouseholes.” (Id., quoting Whitman v. American Trucking Assns., Inc., 531 U.S. 457, 468 (2001). Therefore, the Court sided with the employers and held that “Congress has instructed that arbitration agreements like those before us must be enforced as written.” (Id., slip op., at 25).…
AB 3080, a bill inspired by the #MeToo movement that would bar employers from inserting binding arbitration clauses into contracts as a condition of employment, passed the California State Assembly on May 31, 2018. The bill is not the law yet – it still must get through the Senate and be signed by Governor Brown, who vetoed a similar bill in 2015. Further, its future may already be in jeopardy as it comes on the heels of the momentous decision in the U.S. Supreme Court Epic Systems Corp. v. Lewis, in which the Court held that employers can include provisions in arbitration contracts that bars workers from suing collectively.
In Epic, the Supreme Court upheld the enforceability of arbitration agreements containing class and collective action waivers of wage and hour disputes. It resolved the circuit split between the Sixth, Seventh, and Ninth Circuits – which held class action waivers violate the right to “concerted activities” under Section 7 of the National Labor Relations Act (NLRA) – and the Second, Fifth and Eighth Circuits, which held that class action waivers were enforceable under the Federal Arbitration Act. In its 5-4 decision, the Supreme Court in Epic found that Congress enacted the FAA “in response to a perception that courts were unduly hostile to arbitration.” In doing so, it not only instructed courts to enforce agreements to arbitrate, but it “also specifically directed them to respect and enforce the parties’ chosen arbitration procedures.” The majority also rejected the employee’s argument that the NLRA’s reference to the right to engage in “other concerted activities for purposes of collective bargaining or other mutual aid or protection” supersedes the FAA’s command to enforce arbitration agreements. The Court emphasized that while the NLRA grants employees “the right to organize unions and bargain collectively,” it does not provide “express approval or disapproval of arbitration” and “does not mention class or collective action procedures.” The Court held that the FAA mandates the enforcement of arbitration agreements, and that the right to pursue class or collective relief is not protected concerted activity under Section 7 of the NLRA.…
For decades, technological innovation has changed our world at a rapid pace. Across industries and departments, businesses have a plethora of new and exciting technology and tools they can utilize to deliver products and services more effectively and efficiently to their customers. This is especially true of today’s human resources department and function. Recent trends…
(This blog post was updated 5/2/2018 to reflect changes in the law that was enacted.)
On March 26th, the New Jersey Assembly passed legislation that requires employers in New Jersey to provide earned sick leave to their employees. The legislation was then passed by the New Jersey Senate on April 12th, and Governor Phil Murphy…
On April 12, 2018, New York Governor Andrew Cuomo signed into law the New York State budget bill, which makes some big changes in the obligations of New York employers relative to sexual harassment.
The new law has both immediate and rolling implications for all New York employers.
EFFECTIVE IMMEDIATELY (I.E., RIGHT NOW)
The New York State Human Rights law now extends protections to certain non-employees, including contractors, subcontractors, vendors, consultants, and other persons providing services pursuant to a contract.
This means that employers may now be held liable for the sexual harassment of non-employees if the employer, its agents, or supervisors knew or should have known that the non-employee was subjected to sexual harassment and the employer failed to take appropriate corrective action.
This is a significant change in the law and employers should make sure that Human Resources and managers are aware of it.…
Retail employers beware: New York City’s predictive scheduling law went into effect on November 26, 2017, and now New York State is now getting in the mix. The New York State Department of Labor (“NYSDOL”) recently released draft regulations that would amend the rules for scheduling employees covered by the Minimum Wage Order for Miscellaneous Industries and Occupations. The NYSDOL comment period recently came to a close on January 22, 2018. Likely on the heels of the NYSDOL’s issuance of a final rule, we break down what employers need to know. But before diving into the proposed NYSDOL draft regulations, let’s recap the New York City predictive scheduling law that recently went into effect.
New York City Predictive Scheduling Law
On November 26, 2017, New York City’s “Fair Workweek” legislation went into effect, which is a collective of laws aimed to protect fast food and retail workers. This blog focuses on the provisions for retail workers. The following Q+A provides an overview of the law’s key provisions applicable to retail businesses:
- Does the new law apply to all retailers? No. The law applies to “retail businesses” which are defined as entities with 20 or more employees engaged primarily in the sale of consumer goods at one or more stores within New York City.
- Does the new law apply to all employees? Almost all. This law applies to full-time, part-time, and temporary workers. This law does not apply to employees covered under a valid collective bargaining agreement.
- What kind of notice is required? Employers must provide each individual employee with a final schedule at least 72 hours before the employee’s schedule begins. Employers can provide employees with their schedules in the manner in which they usually contact employees so text or email works. Employers must also post the schedule in-store in an area where all employees can view it.
- On-call outlawed? Yes. What used to be a standard industry practice is now outlawed; an employer cannot require an employee to call in fewer than 72 hours before a shift beings to determine if he or she should come to work.
- Can you add a shift? Not with less than 72 hours’ notice. However, this does not prohibit an employer from asking an employee if he or she would be willing to do so. If the employee is willing, the employer must obtain the employee’s written consent.
- Can you cancel a shift? Not with less than 72 hours’ notice except under limited circumstances including: 1) threats to employees or the employer’s premises; 2) public utility failure; 3) shutdown of public transportation; 4) fire, flood, or other natural disaster; or 5) a government-declared state of emergency.
- I have to keep what for how long? An employer must retain employee work schedules for at least three years. An employer is also required to provide employees with their work schedules for any previous week worked for the past three years within 14 days of the employee’s request.