On May 7, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced that it will delay the opening of the 2019 EEO-1 Component 1 data collection, the 2020 EEO-3 data collection, and the 2020 EEO-5 data collection.

 

The EEOC was planning to open these surveys in 2020; however, the EEOC decided to delay the opening of these surveys as it has recognized the impact that the coronavirus public health emergency is having on employers across America.

 

It is not yet clear when employers must submit these surveys. However, the EEOC expects to begin collecting the 2019 and 2020 EEO-1 Component 1 in March 2021, and the EEOC expects to begin collecting the 2020 EEO-3 and the 2020 EEO-5 in January 2021. The EEOC will notify filers of the precise date the surveys will open as soon as that date is available.

 

As a reminder, the EEOC collects this workforce data from employers with more than 100 employees (lower thresholds apply to federal contractors). The data is used for a variety of purposes including enforcement, self-assessment by employers, and research. Employers meeting the reporting thresholds have a legal obligation to provide the data meaning that compliance is not voluntary.

 

If you have any questions regarding the filing of EEO reports, please contact Frantz Ward’s Labor and Employment group.

On Friday, OSHA issued enforcement guidance regarding employers’ obligations to record COVID-19 cases. According to its previous statements, OSHA’s position is that COVID-19 is a recordable illness under OSHA’s recordkeeping requirements and employers are responsible for recording cases of COVID-19 if:

(1) the case is a confirmed case of COVID-19, as defined by Centers for Disease Control and Prevention (CDC);

(2) the case is work-related as defined by 29 CFR § 1904.5; and

(3) the case involves one or more of the general recording criteria set forth in 29 CFR § 1904.7.

However, recognizing the difficulty employers have faced during the past several weeks trying to determine whether workers who contracted the disease did so due to exposures at work, and given the ongoing community spread of COVID-19 in many areas of the country, OSHA has decided to significantly curtail its recording requirements for the majority of employers.

Per OSHA’s new guidance, OSHA will not enforce its recordkeeping standards against the majority of employers due to the difficulty in determining whether an employee contracted COVID-19 at work. Employers in the healthcare industry, emergency response organizations (e.g., emergency medical, firefighting, and law enforcement services), and correctional institutions must continue to make work-relatedness determinations pursuant to 29 CFR § 1904 and record COVID-19-related illnesses. Until further notice, however, OSHA will not require other employers to make work-related determinations unless:

  1. There is “objective evidence” that a COVID-19 case may be work-related (this could include, for example, a number of cases developing among workers who work closely together without an alternative explanation); and
  2. The evidence was reasonably available to the employer (examples of reasonably available evidence include information given to the employer by employees, as well as information that an employer learns regarding its employees’ health and safety in the ordinary course of managing its business and employees).

See the memo here. While no reference is made to reportability in this new guidance, employers may reasonably follow the same framework regarding determinations of work-relatedness in cases of employee deaths or in-patient hospitalizations.

The guidance also provides limited clarification regarding employee privacy, and states that because COVID-19 is an illness, if an employee voluntarily requests that his or her name not be entered on the log, the employer must comply as specified under 29 CFR § 1904.29(b)(7)(vi) by entering “privacy case” in the space normally used for the employee’s name, keeping a separate list of privacy concern cases, among other requirements.

Frantz Ward’s Coronavirus Response Team assists clients in navigating the multitude of issues presented by the current crisis. For assistance in addressing these issues or in developing other strategies to protect your business, please contact Frantz Ward Partners  Brian Kelly or Christopher Koehler and they will engage the appropriate members of the response team. In addition, please visit the Frantz Ward Coronavirus Daily Update/Resource Center for up-to-date information and links.

As we wrote about here, the U.S. Department of Labor (“DOL”) has issued informal guidance to help employers understand their rights and obligations under the Families First Coronavirus Response Act (“FFCRA”). DOL has since updated that guidance to address topics such as the following:

  1. Whether employees are eligible for paid leave if they are unable to work due to layoff, furlough, or hours-reduction resulting from business downturns or a governor-issued stay-at-home order;
  2. Documentation that the employer can require from employees for various forms of paid leave, and relatedly, documentation that the employer should retain to support its request for tax credits;
  3. Extent to which leave can be taken intermittently, both when teleworking and non-teleworking;
  4. Eligibility for unemployment benefits while collecting paid leave;
  5. Permissibility of supplementing FFCRA paid leave with  accrued paid time off;
  6. Health insurance continuation while on leave.

The guidance (as updated) can be found here.

At some point, DOL will issue formal regulations interpreting the FFCRA, but DOL has not released a specific timeline for doing so. In the meantime, this informal guidance provides some helpful direction.

Should you have any questions about the guidance, or the FFCRA, feel free to reach out to any Frantz Ward Labor and Employment attorney.

Frantz Ward has established a Coronavirus Response Team to assist clients in navigating the multitude of issues presented by the current crisis. For assistance in addressing these issues or in developing other strategies to protect your business, please contact Frantz Ward Partners Brian Kelly or Christopher Koehler and they will engage the appropriate members of the response team.

On March 25 the Department of Labor (“DOL”) released the Families First Coronavirus Response Act’s (FFCRA) required notice poster that will need to be posted at many workplaces. The DOL also issued a FAQ to explain employer obligations associated with the posting. Unfortunately, these publications both raise additional questions.

First, there appears to be an error on the DOL’s initial poster. The current poster indicates that the Expanded Family Medical Leave Act provides a cap of $12,000 for eligible employees, whereas the aggregate cap under the actual FFCRA is $10,000. The only way an employee can receive $12,000 is if they received 10 days of paid sick leave in accordance with the Paid Sick Leave provision of the FFCRA. The poster does not reference the distinction.

The FAQ also indicates that employers must post the notice in a conspicuous place, but that they can also satisfy the posting requirement by emailing or direct mailing this notice to employees, or posting this notice on an employee information internal or external website. This process seems to be focusing on employees who are unable to report to work because of quarantining, indicating that employers may have some obligation to notify those employees who are unable to report to work. The DOL should be issuing additional guidance on this requirement soon.

For the time being employers should hang the poster currently issued by the DOL, but continue to monitor the DOL for developing guidance. If the DOL issues a revised poster before April 1, we will update you here.

Frantz Ward has established a Coronavirus Response Team to assist clients in navigating the multitude of issues presented by the current crisis. For assistance in addressing these issues or in developing other strategies to protect your business, please contact Frantz Ward Partners Brian Kelly or Chris Koehler and they will engage the appropriate members of the response team.

While the Department of Labor (DOL) has not yet issued regulations, it has issued initial guidance to help employers understand who and what is covered under the new Families First Coronavirus Response Act (“FFCRA”). This initial guidance comes in the form of a FAQ and a Fact Sheet.

The new guidance assists employers by answering several key questions that have surfaced since the law was passed. The guidance details:

  • The FFCRA’s paid leave provisions become effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020.
  • How to count employees when determining whether an employer meets the 500-employee threshold.
  • If two entities are considered a joint employer (as defined under the FLSA), all of their common employees must be counted in determining whether paid sick leave and emergency family medical leave must be provided.
  • If two entities are considered an integrated employer (under the FMLA), then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family and medical leave.
  • How to determine hours worked by a part-time employee.
  • When calculating an employee’s regular rate of pay for purposes of paid leave, the employer is to use the employee’s average rate of pay over a period of up to six months prior to the date the employee takes the leave. Commissions, tips, and piece rates, must be included in the regular rate calculation.
  • How the paid sick leave and the expanded family medical leave provisions work in conjunction with each other where an employee is home with his/her child because their school or place of child care is closed, or the child care provider is unavailable.
  • The various levels of pay associated with the specific qualifying reason for an employee’s leave.

Unfortunately, the new guidance does not provide much information for smaller businesses (less than 50 employees) that seek to utilize the exemption from providing paid sick leave or expanded family and medical leave because it would jeopardize the business’s viability. Smaller businesses should document why their business meets the criteria for exemption and await further guidance once the DOL issues regulations.

We will continue to monitor this developing situation as employers await the DOL’s regulations. Should you have any questions about the new guidance, or the FFCRA, feel free to reach out to any Frantz Ward Labor & Employment attorney.

Frantz Ward has established a Coronavirus Response Team to assist clients in navigating the multitude of issues presented by the current crisis. For assistance in addressing these issues or in developing other strategies to protect your business, please contact Frantz Ward Partners Brian Kelly or Chris Koehler and they will engage the appropriate members of the response team.

I. Introduction
On March 18, 2020, the President signed The Emergency Families First Coronavirus Response Act (“Bill”) into law. The Bill responds to the spread of the coronavirus (COVID-19) and provides for two new, overlapping paid leave requirements for employers. The first is an amendment to the FMLA, while the other is a separate new, standalone statute called the “Emergency Paid Sick Leave Act.”  Notably, both laws:

(1) apply only to employers with fewer than 500 employees;
(2) require paid leave for conditions relating to coronavirus; and
(3) provide tax credits to employers who give paid leave under either law.

II. Emergency Family and Medical Leave Expansion Act
The Bill amends the Family and Medical Leave Act (“FMLA”) with a section specifically discussing the coronavirus and related issues (“Emergency Family and Medical Leave Expansion Act”) (referred to below as the “Coronavirus-related FMLA Amendment” or “FMLA Amendment”). This section of the Bill applies to employers with fewer than 500 employees and requires that, if used for a specified coronavirus-related reason, certain portions of an employee’s 12-week FMLA leave must be paid.

Covered Employer.

  • All employers with fewer than 500 employees.
  • The Secretary of the Department of Labor has the authority to issue regulations to exempt small businesses with fewer than 50 employees, when the imposition of such requirements would jeopardize the viability of the business as a going concern.

Eligible Employee.

  • To be eligible, an employee simply must have been employed for 30 calendar days (not one year and 1,250 hours, as normally required for FMLA eligibility).
  • The Secretary of the Department of Labor has the authority to issue regulations to exclude certain health care providers and emergency responders from the definition of “employee.”

Qualifying conditions.  An eligible employee may use this leave because he or she:

  • Is unable to work (or telework) due to a need for leave to care for a son or daughter under 18 years of age if the son or daughter’s school or place of care has been closed, or the childcare provider is unavailable, due to a public health emergency (i.e. an emergency relating to COVID-19 as declared by a Federal, State, or local authority).

First 10 days of leave are unpaid. The first 10 days of corona-related leave may be unpaid. However, an employee can choose – but cannot be forced – to substitute accrued vacation leave, personal leave, or other medical or sick leave during this period.

Remaining Leave is PaidAny remaining FMLA leave following the initial 10-day period is paid at a rate of two-thirds the employee’s regular rate of pay. However, in no event shall such paid leave exceed $200 per day and $10,000 in the aggregate.

Amount of Available Leave. Note that the Bill does not appear to extend the employee’s total leave allotment under the FMLA. Thus, while an employee is entitled to up to 12 weeks of leave for the coronavirus-related conditions described above, that total would be reduced by any leave taken (whether previously or in the future) for other FMLA-qualifying reasons. So, for example, an employee who has already exhausted his or her FMLA allotment apparently would not be entitled to any additional leave under this bill.

Job Protection.

  • Like other forms of FMLA leave, this leave is job-protected. That means the employer must return the employee to the same or equivalent position upon their return to work.
  • Additionally, the job-restoration requirement does not apply to employers with fewer than 25 employees if the position held by the employee when the position commenced no longer exists due to economic conditions or other operating conditions of the employer, the employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held, and the employer makes reasonable efforts within one year to contact the employee if an equivalent position becomes available.

Relationship to other forms of FMLA Leave. The Bill should be thought of as operating separately from the FMLA as it adds several new defined terms (i.e. childcare provider), changes the definition of “covered employee”, and uses a different definition of “covered employer” (i.e. fewer than 500 employees). So, before denying leave based on the previous definitions found under the FMLA, an employer should refer to the Bill and these updated definitions. Furthermore, any “normal” FMLA leave (i.e., for a serious health condition) will continue to operate as it had before – meaning it will not automatically become paid leave.

III. Emergency Paid Sick Leave Act 
Apart from and in addition to the Coronavirus-related FMLA Amendment, the Bill also contains a new statute titled the “Emergency Paid Sick Leave Act” (referred to as the “Sick Leave Act”).

Covered Employer:

  • Like the FMLA Amendment, the Sick Leave Act applies to all employers with fewer than 500 employees.
  • The Secretary of the Department of Labor has the authority to issue regulations to exempt small businesses with fewer than 50 employees from taking paid sick time to care for a son or daughter, when the imposition of such requirements would jeopardize the viability of the business as a going concern.

Covered Employee:

  • Unlike the FMLA amendment, which only covers employees who have worked at least 30 calendar days, the Sick Leave Act covers all employees regardless of tenure.

Qualifying Reasons for Sick Leave:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19.
  2. The employee has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19.
  3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to an order as described in paragraph (1) or has been advised as described in paragraph (2).
  5. The employee is caring for a son or daughter if the school or place of care for the son or daughter has been closed, or the childcare provider of the son or daughter is unavailable, due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Amount of Leave:  The Sick Leave Act entitles employees to the following amount of paid leave:

  • Full time employees (i.e., 40 hours per week): 80 hours;
  • Part-time: average number of work hours over typical two-week period.

Pay Rate:

  • An employee will be compensated at their regular rate of pay for the first three qualifying reasons listed above but no more than $511 per day and $5,110 in the aggregate; and
  • An employee will be paid two-thirds of their regular rate of pay for the last three qualifying reasons listed but no more than $200 per day and $2,000 in the aggregate.

Relationship to other forms of leave.  An employer may not require an employee to use other paid leave before the employee uses paid sick leave under this section. This paid sick leave is given to an employee in addition to any leave that the employer currently offers.

No Retaliation.  The Bill also includes anti-retaliation protections meaning that an employer cannot terminate, or take any other adverse action against, an employee for taking paid sick leave provided under the Bill.

IV. Tax Credits for Paid-Leave Payments
The Bill also provides for refundable tax credits to employers for providing paid sick leave under the FMLA Amendment and/or Sick Leave Act:

  • Tax Credit for FMLA-Amendment Related Paid Leave:
    • A credit against payroll tax and certain employer excise taxes for each calendar quarter equal to 100 percent of the FMLA-Amendment-related wages that are paid by such employer in such calendar quarter.
    • The amount of qualified family leave wages taken into account for each employee is capped at $200 per day and $10,000 for all calendar quarters.
    • If the credit exceeds the employer’s total social security tax liability for all employees for any calendar quarter, the excess is treated as an overpayment and is refundable to the employer.
  • Tax Credit for Sick Leave Act Paid Leave:
    • A credit against payroll tax and certain employer excise taxes for each calendar quarter equal to 100 percent of the Sick Leave Act-related wages paid by such employer in such calendar quarter.
    • The amount of qualified sick leave wages taken into account for the credit with respect to any individual shall not exceed $200 per day with respect to paragraphs (4), (5), and (6) described above, or $511 in the case of paragraphs (1), (2), and (3) described above.[1]
    • If the credit exceeds the employer’s total social security tax liability for all employees for any calendar quarter, the excess is treated as an overpayment and is refundable to the employer.

V. Conclusion 
The Bill was a quickly drafted piece of legislation that left many holes and unanswered questions. Employers should be flexible in their implementation of this law and should seek appropriate guidance as they inevitably encounter issues interpreting the Bill. If employers have any questions regarding coverage, interaction of laws, tax credits, or other provisions of the law – please contact Frantz Ward Partners Brian Kelly or Christopher Koehler and they will engage the appropriate members of the response team.


[1] For eligible self-employed individuals the amount of qualified sick leave wages taken into account for the credit is the lesser of $200 or 67% for sick leave taken pursuant to paragraphs (4), (5), and (6) described above, and $511 or 100% for sick leave taken pursuant to paragraphs (1), (2), and (3) described above.

On March 14, 2020, the U.S. House of Representatives passed The Emergency Families First Coronavirus Response Act (H.R. 6201) (“House Bill”) in response to the spread of the coronavirus (COVID-19). The House Bill provides for two new, overlapping paid leave requirements for employers: (1) the Emergency Family and Medical Leave Expansion Act, (2) the Emergency Paid Sick Leave Act.

The House Bill is not final as it still must pass through the Senate. It is, however, reported that the administration supports the House Bill – so it is likely that some type of legislation will pass.

EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT

The Emergency Family and Medical Leave Act would apply to employers with fewer than 500 employees and would give the Department of Labor the authority to exempt small businesses with fewer than 50 employees. The act requires that eligible employees be granted job-protected leave for the following:

  • To adhere to a requirement to self-isolate to exposure to or symptoms of coronavirus;
  • To care for an at-risk family member who is adhering to a requirement self-isolate due to exposure to or symptoms of coronavirus; and
  • To care for a child of an employee if the child’s school or place of care has been closed, or the childcare provider is unavailable, due to a coronavirus.

The first 14 days of this leave may be unpaid. However, an employee can choose to substitute accrued leave during this period. Any remaining leave following the initial 14-day period is paid at a rate of two-thirds the employee’s regular rate of pay.

EMERGENCY PAID SICK LEAVE ACT

The Emergency Paid Sick Leave Act would apply to all employers with fewer than 500 employees and all employees would be eligible for paid sick leave for the following reasons:

  • To self-isolate because the employee is diagnosed with coronavirus.
  • To obtain a medical diagnosis or care if experiencing the symptoms of coronavirus.
  • To comply with a recommendation or order by a public official with jurisdiction or a health care provider on the basis that the physical presence of the employee on the job would jeopardize the health of others.
  • To care for or assist a family member of the employee who is self-isolating.
  • To care for the child of such employee if the school or place of care has been closed, or the childcare provider of such child is unavailable, due to coronavirus.

The paid sick leave provision would entitle full-time employees to 80 hours of leave and part-time employees with leave equal to their average number of hours worked over a two-week period. An employee will be compensated at their regular rate of pay for this leave; however, will be paid two-thirds of their regular rate of pay for leave to take care of a family member who is self-isolating or child whose school has closed.

Conclusion

The House Bill was a quickly drafted piece of legislation that left many holes and unanswered questions. The House Bill will hopefully be refined by the Senate before passing; however, employers should prepare for this process to move quickly with guidance that is not always readily available. If employers have any questions regarding coverage, interaction of laws, tax credits, or other provisions of the law – please contact Frantz Ward Partners Brian Kelly or Christopher Koehler and they will engage the appropriate members of the response team.

On March 9, the Occupational Health and Safety Administration (OSHA) issued new guidance for employers to aid in the prevention of employee exposure to COVID-19 in the workplace, which can be found here.

After first briefly summarizing the symptoms of COVID-19 (including but not limited to fever, cough, headache, and shortness of breath) and transmission methods (currently understood to be through person-to-person contact and respiratory droplets produced when an infected person coughs or sneezes), OSHA reminded employers of its General Duty Clause, 29 U.S.C. § 654 (a)(1), which requires employers to provide their employees with a workplace free from recognized hazards likely to cause death or serious physical harm.

While recognizing it may not be possible to eliminate a COVID-19 outbreak hazard and acknowledging that no specific OSHA standard governs occupational exposure to the coronavirus, OSHA’s guidance outlines a number of recommendations for reducing coronavirus exposure in the workplace. The Guidance directs employers to “plan now for COVID-19” and states that “[e]mployers who have not prepared for pandemic events should prepare themselves and their workers.” OSHA’s advice to employers includes the following:

  • Implementing and encouraging best practices for minimizing the spread of COVID-19, including:
    • Encouraging sick employees to stay home
    • Minimizing or eliminating non-essential travel
    • Provide tissues, handwashing or sanitizing stations for employees and visitors
    • Recommend employees take personal measures to prevent exposure, such as frequent hand washing.
    • Minimizing contact between employees, clients and customers when possible; and
    • Considering alternative work arrangements including flexible work schedules, work from home, and staggered shifts to reduce the number of employees physically present in the workplace.
  • Evaluating the risk of exposure, based on an employer’s particular industry, workplace setting, and work task
  • Developing an infectious disease preparedness and response plan, and policies and procedures for prompt identification and isolation of sick employees; and
  • Selecting, implementing, and ensure employees use workplace controls (engineering, administrative, and personal protective equipment) to prevent exposure, including physical barriers to control the spread of the virus; air filters; social distancing; and appropriate PPE, hygiene, and cleaning supplies (which may include respirators accompanied by appropriate training on fit, wear, use, removal, and cleaning).

Throughout the guidance, OSHA also repeatedly emphasized the importance of staying up to date on fact-based information from other governmental sources, including guidance issued by the Center for Disease Control.

Contact Frantz Ward Partners Brian Kelly or Christopher Koehler with questions or for additional guidance and they will engage the appropriate members of Frantz Ward’s COVID-19 response team.

Today the National Labor Relations Board (the “Board”) issued the final version of its Rule rolling back an Obama-era standard that deemed “indirect control” over a contractor or franchisee and/or the reservation of the ability to exert such control as being sufficient to establish joint employment under the National Labor Relations Act.

The Board majority comprised of Trump appointees, Chairman John Ring and members Bill Emanuel and Marvin Kaplan, reinstated the pre-Obama Board test that said that a business would only be deemed a joint employer if it has “substantial direct and immediate control over another company’s workers.”  The new Rule also provides definitions of key terms such as “essential terms and conditions of employment,” as well as what will constitute “direct and immediate control.”  The mere existence of an arm’s length contractual relationship between two businesses will not, in and of itself, create a joint employer relationship.

The Board through Chairman Ring explained that returning to the pre-Obama standard would provide greater clarity for employers, employees and unions in determining true employment relationships.  The determination of joint employer status is critical in determining bargaining obligations and potential liability for unfair labor practices of respective employers.

The Rule was the subject of extensive comments provided by both management and labor, and represents yet another significant reversal by the current Board of Obama Board precedents.

Employer-mandated arbitration agreements have been a hot topic in recent years. Most notably, in its highly anticipated decision in Epic Systems v. Lewis, the U.S. Supreme Court confirmed that under the Federal Arbitration Act (“FAA”), employers may require employees to enter into mandatory arbitration agreements as a condition of employment, without violating the National Labor Relations Act (“Act”), and that these agreements may also prohibit employees from arbitrating claims on a collective- or class-wide basis.

Epic Systems not only validates individually-mandated arbitration agreements, it may also invalidate state laws that attempt to prohibit arbitration in certain contexts. After New York enacted a law to prohibit the mandatory arbitration of sexual harassment claims, for example, a New York district court struck down the law, holding that it was preempted (i.e., negated) by the FAA as interpreted by Epic Systems. Latif v. Morgan Stanley & Co. LLC, et al., No. 1:18-cv-11528 (S.D.N.Y. June 26, 2019).

With all of this arbitration momentum, one may be forgiven for assuming that employment arbitration agreements are always enforceable, no matter the circumstances. However, two recent lessons teach employers otherwise.

  1. Eighth District Court of Appeals invalidates agreement to arbitrate all disputes (employment or otherwise)

The first lesson comes from Ohio’s Eighth District Court of Appeals, the appellate court for Cuyahoga County, via Thomas v. Hyundai of Bedford, No. 108212 (Jan. 23, 2020).

In Thomas, an employer and employee entered into an arbitration agreement that required the employee to arbitrate “any actual or alleged claim or liability, regardless of its nature.” The court held that this type of language “sought to include every possible situation that might arise in an employee’s life, [and, therefore] the arbitrator would be resolving disputes unrelated to employment.” The court thus held that the agreement was “unconscionable” and therefore unenforceable. Notably, the court reached this conclusion despite the fact that the case itself involved a classic employment dispute (discrimination and retaliation under R.C. Chapter 4112).

Lesson No. 1, courtesy of the Eighth District: Employers using mandatory arbitration agreements (at least in Ohio) should consider explicitly limiting coverage to disputes arising out of the employment relationship.

  1. NLRB rules unlawful an arbitration agreement that failed to explicitly exclude the filing of unfair labor practice charges.

The second lesson comes from the National Labor Relations Board (“NLRB”), the federal agency that enforces the NLRA.

On February 12, 2020, in Country Wide Financial Corporation, 369 NLRB No. 12 (February 12, 2020), the NLRB ruled that a mandatory arbitration agreement violated the NLRA (notwithstanding Epic Systems) because it restricted employees’ ability to file and pursue unfair labor practice charges before the NLRB. The agreement stated that “[a]rbitration is the parties’ exclusive remedy for covered claims,” which were defined as claims arising out of, relating to, or associated with the employee’s employment relationship and claims for violation of federal statutes.  Thus, the Board held that the arbitration agreement impermissibly prohibited employees from filing an NLRB charge, which the law prohibits.

Interestingly, the agreement did contain an exclusion clause which clearly provided that “[n]othing in this Agreement shall be construed to require arbitration of any claim if an agreement to arbitrate such claim is prohibited by law.” But the Board found this exclusion insufficient, holding that it “le[ft] the reasonable employee in the dark as to what is prohibited by law,” including  “whether [the exclusion] applies to claims that the NLRA has been violated.”

Lesson No. 2, from the NLRB:  Employers using mandatory arbitration agreements should include language which explicitly states that those agreements do not prohibit employees from making complaints to or filing of charges with government agencies, including the NLRB and EEOC as well as the Securities and Exchange Commission, if  the employer is publicly held. Failing to include this type of language could expose the employer to litigation and unfair labor practice charges.