Governor DeWine recently signed into law Senate Bill 47 (SB 47), which primarily aims to clarify employers’ overtime-pay obligations under Ohio law. The Bill takes effect on July 6, 2022.

As discussed below, the Bill does some good – it expressly integrates the FLSA’s Portal-to-Portal Act exemptions into the Ohio statute; additionally, it limits a plaintiff’s procedural mechanisms for pursuing Ohio class-wide wage and hour claims in court. But the Bill also leaves several unanswered questions, and most importantly, it contains express carve-outs that arguably expand employers’ overtime-pay obligations.

1: The Good: Adopting Portal-to-Portal Act and De Minimis Exceptions; Limiting Procedural Mechanisms Applicable to State Class-wide Lawsuits

SB 47 expressly adopts the exceptions to compensability provided by the “Portal to Portal Act” (PPA) amendments to the federal Fair Labor Standards Act (“FLSA”), as well as the FLSA’s de minimis exemption. Specifically, under the FLSA —and now, too, SB 47— an employer need not pay overtime wages for time spent:

  1. Engaging in normal commuting to and from work;
  2. “Performing activities that are preliminary to or postliminary to the principal activity or activities”; or
  3. Engaging in “activities requiring insubstantial or insignificant periods of time beyond the employee’s scheduled working hours” (known as “de minimis” time).

While these changes are nominally impactful, courts had already interpreted Ohio law as including these exceptions even prior to SB-47. Their practical utility is therefore limited. Nonetheless, having these important principles codified in the law is welcomed for employers.

Also welcomed are the Bill’s changes to the procedures for bringing class-wide wage-and-hour lawsuits under Ohio law. Under existing law, a plaintiff may purse such actions as “class actions.” This mechanism includes all members into the class unless the member expressly “opts out” of the action. Under SB 47, however, opt-out wage-and-hour actions are now prohibited.

Instead, consistent with federal FLSA procedures, such actions now must be brought as “collective actions,” a mechanism which requires each class member to give written consent to “opt in” to the action. Typically, opt-in actions creates much smaller classes than “opt-out” actions.

2. The Bad: Carve-Outs that Potentially Expand Employers’ Overtime Obligations and Additional Ambiguities

Although the Bill generally adopts the FLSA’s PPA exceptions, it doesn’t do so wholesale. It rather includes certain carve-outs that the PPA does not. Most notably, employers must pay overtime on all activities that are “specifically directed by the employer,” as well as those which are performed “pursuant to a custom or practice applicable to the activity.” These exceptions contradict judicial interpretations of the PPA and existing Ohio law.

Interpreting the PPA, the U.S. Supreme Court has clarified that off-shift activities are not compensable merely because the employer requires them. Integrity Staffing Solutions v. Busk, 135 S. Ct. 513 (2014)(“[I]f the test could be satisfied merely by the fact that an employer required an activity, it would sweep into ‘principal activities’ the very activities that the [PPA] was designed to address”). Nor are they compensable because they make the rest of the job easier or safer. Rather, such activities are only compensable if they are both (1) integral to (i.e., an “intrinsic component of”) the principal activity the employee was hired to perform and are (2) indispensable to his or her performance of that activity (i.e., the employee effectively cannot perform the principal activity unless he also performs the off-shift activity).

Applying this “integral and indispensable” test, courts have frequently rejected claims for a number of mandatory off-shift activities, including for time spent:

  • waiting in line to undergo, and undergoing, mandatory post-shift security screenings;
  • maintaining and laundering uniforms;
  • changing into and out of required uniforms;
  • performing pre- and post-trip vehicle inspections; and
  • reporting to a site and waiting to be assigned work.[1]

Under SB 47, however, employers may be required to pay for time spent performing these activities, so long as they are employer -“direct[ed].” This is presumably true regardless of whether the activity meets the more-stringent “integral and indispensable” test described above. Consequently, SB 47 may entitle employees to compensation for activities that are not currently covered by existing Ohio and federal law.

Moreover, while the Bill aims for clarity, it creates several important ambiguities. For instance:

  • Did the drafters intend to expand employers’ overtime obligations for pre- and post-liminary obligation beyond what is required by the FLSA?
  • The Bill’s definition of “de minimis” time is more expansive than that applied to the FLSA: unlike SB 47, the FLSA requires the time occur such that, “as a practical administrative matter,” it cannot be “precisely recorded.” Was SB-47’s omission of this limitation intentional?
  • The Bill only covers “overtime.” Does this mean the employer-directed off-shift activities must occur before an employee works 40 regular weekly hours before pay is required, or are these activities merely aggregated with all other work hours—no matter when they occur— and are thus compensable if the employee exceeds 40 total hours?

3. Concluding Thoughts and Practical Advice

SB 47’s aim to clarify Ohio’s overtime law is generally positive. Indeed, because the FLSA’s integral and indispensable test is largely fact-specific, identifying the line between compensable and non-compensable activities can be arduous, and courts sometimes reach inconsistent results. The Bill may reduce some of that ambiguity. But in doing so, the Bill ostensibly increases the likelihood that employer-directed off-shift activities will be subject to overtime obligations.

The Bill takes effect on July 6. In the meantime, employers should carefully investigate and identify any activities, however insignificant, that employees may be performing before or after they clock in and out. If those activities are being encouraged or directed by the employer, they may need to be tracked and paid. Employers should also update their handbooks to specifically prohibit off-the-clock work and create a procedure for reporting alleged off-the-clock activities to management or Human Resources.

 

 

[1] See Busk, 135 S.Ct. 513 (time spent waiting in line and undergoing  mandatory pre- and post-shift security screenings was not compensable);  Dinkel v. Medstar Health Inc., 99 F. Supp. 3d 37, 42 (D.D.C.2015) (employees not entitled to time spent maintaining and laundering uniforms); Pippen v. Global Technical Recruiters, Inc., No. 1:21 CV 00311, 2021 U.S. Dist. LEXIS 111392 (N.D. Ohio June 15, 2021) (time spent changing into and out of required uniforms not necessarily compensable); Campbell v. Empire Merchants, LLC, No. 16-CV-5643 (ENV) (SMG), 2018 U.S. Dist. LEXIS 146510, at *21 (E.D.N.Y. Aug. 27, 2018) (employees not entitled to pay for time spent reporting to site and waiting to be assigned work); Brand v. Comcast Corp., 135 F. Supp. 3d 713 (N.D. Ill.2015) (cable technicians not entitled to pay for time spent performing pre-trip vehicle inspections).

After a dramatic few days, Maryland joins nine other states (and the District of Columbia) in implementing a paid family and medical leave program. On March 31st, the Maryland General Assembly passed “The Time to Care Act of 2022,” which established the Family and Medical Leave Insurance Fund. Just eight days later, on April 8th, Republican Governor Larry Hogan vetoed the legislation citing the burden on small businesses, as well as the potential for up to 24 weeks of leave in a year (compared to only 12 weeks under the federal FMLA). The following day (April 9th), the Maryland General Assembly voted to override Governor Hogan’s veto, thereby finalizing the legislation.

A few key takeaways from Maryland’s paid family and medical leave program are:

  • Beginning October 1, 2023, employers, employees, and self-employed individuals who elect to participate (see below) will be required to contribute to the fund.
  • A self-employed individual can elect to participate in the program but must commit to at least three years of participation.
  • The program is mandatory for employers with 15 or more employees.
  • Generally, employees are entitled to up to 12 weeks of leave within a year for qualifying reasons. However, in certain circumstances, an employee may be entitled to up to 24 weeks of leave within one year.

Maryland’s new law is a reminder to multi-state employers, as well as employers with remote workers, to stay up-to-date on state and local leave guidelines, in addition to federal leave laws.

What is OSHA’s top post-COVID enforcement priority?  According to Assistant Secretary of Labor and the head of the Occupational Safety and Health Administration (“OSHA”), Doug Parker, it’s heat-related illnesses.  On April 8, 2022, OSHA released its National Emphasis Program (“NEP”) for heat related issues in the workplace.

Before becoming head of federal OSHA enforcement, Mr. Parker was head of Cal/OSHA, one of the few states in the country to have a state plan, including its own dedicated heat illness prevention standard.  The NEP bring this issue to the forefront of federal OSHA’s inspection and enforcement priorities, as the agency works in the meantime to create a proposed rule (i.e. a dedicated, permanent standard).  For now, OSHA will use the NEP and its General Duty clause to target and begin conducting heat-related workplace inspections at “High-Hazard” heat illness employers in the near future.

How should employers prepare? First, understand the work-related hazard OSHA is trying to prevent and mitigate: heat-related illnesses and stress that result when the human body can no longer regulate its internal temperature.  Such illnesses include heat stroke, heat exhaustion, heat cramps, and other illnesses – many of which may result in death—with symptoms that include high body temperature, confusion, dizziness, headache, nausea and vomiting.

Second, employers should determine if they are covered by the NEP, which targets “High-Hazard” industries with both indoor and outdoor operations based on NAICS codes and includes industries from manufacturing, construction and transportation to restaurants, skilled nursing facilities and employment services industries.  See NEP, Appendix A.

Third, employers should evaluate the potential for outdoor and indoor heat illness hazards and either develop a program to address those heat hazards or review existing policies and training programs that address heat exposure.  At a minimum, employers should start with and build off of the well-worn mantra: “Water. Rest. Shade.”

Although many employers with Southern locations deal with warmer temperatures year-round, summer is quickly approaching for the entire country and employers in “High-Hazard” industries should anticipate unannounced inspections from OSHA on “any day that the National Weather Service has announced a heat warning or advisory for the local area.”

If you have any questions about the NEP, developing and revising heat illness prevention programs, or how to prepare for an OSHA inspection, please contact Frantz Ward OSHA attorneys Christina Niro or Jon Scandling.

With so many employees having contracted COVID-19, an important legal question for employers and employees alike is whether COVID-19 is a “disability” within the meaning of the Americans with Disabilities Act (“ADA”). In other words, is COVID-19 the sort of condition for which employees are entitled to reasonable accommodations, such as extended leave, flexible work schedules, and remote work arrangements? One might think the answer would be well-settled by now, given that we’re two years into the pandemic. But unfortunately the law often develops well after the circumstances that necessitate it. So too, here: courts are just now grappling with this fundamental question, and the results have not always been consistent.

The bar for establishing a disability under the ADA is not high: a disability arises from “any  physical or mental impairment that substantially limits one or more of the major life activities of such individual” (as well as a record of, or being regarded as, having such an impairment). Still, not every medically recognized condition constitutes a disability. There are limits, and just like other conditions, these limitations apply to COVID-19 as well.

For instance, courts and the EEOC generally recognize that COVID-19 will not constitute a disability where the symptoms are both transitory (short-lasting) and minor.  This means that an employee is not disabled who merely tests positive but is asymptomatic, or whose COVID-19 results in mild symptoms similar to those of the common cold or flu that resolve in a matter of days or weeks (with no other consequences). But what should be the result where the symptoms are short-lasting but very severe? On this point courts have differed, as two recent cases illustrate.

Consider first Brown v. Roanoke Rehab. & Healthcare Ctr., No. 3:21-CV-00590-RAH, 2022 U.S. Dist. LEXIS 30548 (M.D. Ala. Feb. 22, 2022). In this case, the employer fired an employee 13 days into her 14-day COVID-19 isolation period. The employee alleged that her symptoms, including “severe weakness, fatigue, brain fog, high blood pressure, cough, difficulty breathing, fever, and swollen eyes,” substantially limited major life activities such as working, breathing and concentrating. The Court found that the employee had sufficiently alleged an ADA disability,  despite no indication that the symptoms were expected to persist. According to this court, transitory COVID-19 symptoms are only excluded from ADA coverage if the symptoms are also minor.

In Baum v. Dunmire Property Mgt., however,  another court reached the opposite conclusion. 2022 U.S. Dist. LEXIS 54555 ( D. Colo. Mar. 25, 2022).  There  the individual (the plaintiff’s father) died just 15 days after testing positive for COVID-19, as a result of “acute respiratory distress syndrome, bilateral pneumonia, and COVID-19.” Nonetheless, the court concluded that this individual was not disabled, explaining: “The ADA contemplates long-term disabilities that impair major life activities. Illness that are transitory in nature are not disabilities within the meaning of the ADA. …  Although Plaintiff’s father died, his illness lasted for only 15 days. Such an acute, short-term illness is too transitory in nature to constitute a disability under the ADA.” (emphasis added).”

The key takeaway is that whether COVID-19 is or is not a disability is necessarily  a case-by-case analysis, depending on the employee’s symptoms and prognosis. If the employee’s symptoms are non-existent or very minor, the employee is not likely disabled.  If the employee’s symptoms are severe and long-term, the employee likely is disabled. And where the symptoms are acute but short-term, the answer is less certain—for now—especially as courts are still trying to reconcile the condition’s potentially serious nature with the fact that it has affected millions of people. Compare Champion v. Mannington Mills, Inc., 538 F. Supp. 3d 1344, 1349 (M.D. Ga. 2021) (explaining that to find millions of Americans “disabled” under the ADA would lead to absurd results) with Booth v. GTE Fed. Credit Union, No. 8:21-cv-1509-KKM-JSS, 2021 U.S. Dist. LEXIS 224333 (M.D. Fla. Nov. 20, 2021)) (analyzing the lack of consensus regarding whether COVID-19 is a disability under the ADA).

We will continue to monitor the case developments closely.  In the meantime, where the disability answer is not clear, employers can usually mitigate their risk best by assuming that the diagnosis is a disability and engaging in the interactive process to determine whether a reasonable accommodation is appropriate. On this point, employers should remember that while disabled employees are entitled to  reasonable accommodations, employers are not required to:  (1) remove essential job functions, including in-person attendance if applicable, (2) grant indefinite leave, (3) lower production standards, (4) provide any accommodation that creates an undue hardship, or (5) provide an employee’s preferred accommodation,  as long as the accommodation that is provided is effective.

On March 18, 2022, the U.S. House of Representatives passed the CROWN Act (“Creating a Respectful and Open World for Natural Hair”) which bans hairstyle discrimination in employment, public accommodations, federally assisted programs and housing programs. The act bans discrimination against braids, dreadlocks, curls and the like. Advocates of the bill say a split in federal appellate courts requires clarification provided by the terms of the legislation. The Biden administration has signaled that it strongly supports the act. Senate republicans have signaled objections to the bill, arguing that it is unnecessary because federal law already provides protection for the types of discrimination the bill is designed to eliminate. Thus, the bill faces an uncertain future in the Senate. Several states and municipalities already have enacted similar types of statutes and ordinances.

If you have questions about this or other labor and employment issues, please contact Doug Schnee or another of the Frantz Ward Labor & Employment Group.

On March 7, 2022 NLRB General Counsel Jennifer Abruzzo asked the NLRB to overturn Board precedent related to employee handbook rules.

The case at issue is Stericycle, Inc., which examines whether certain workplace rules infringe upon or restrict employees’ rights under the NLRA. As part of the Board’s proceedings, the parties (and interested third parties) were asked to state their position on whether the Board should overrule its 2017 Boeing decision as it relates to reviewing employer policies, and return to its older Lutheran Heritage standard. Under the Boeing standard, the Board reviewed workplace rules based on a two-step balancing approach, focusing more on what the actual impact of a particular work rule has on the work place. Under the Lutheran Heritage standard, the Board heavily focused on whether an employee could “reasonably construe” that a rule was meant to restrict an employee’s Section 7 rights under the NLRA. When the Board overruled the Lutheran Heritage standard in 2017, it was a welcome sign for employers.

From the employer’s perspective, the Lutheran Heritage standard was very employee friendly and unpredictable because it allowed the NLRB agent investigating a particular situation to construe how a hypothetical employee would view a particular rule – allowing them to infer if someone may think a rule infringes upon their Section 7 rights. This resulted in the Board overruling seemingly innocuous policies based on the Board’s perception of potential infringements. For example, rules related to harassment and civility policies were at times considered unlawful under Lutheran Heritage because of their potential impact. Under Boeing, those rules were far less problematic.

While the named parties, and multiple third parties on an amicus basis, just recently presented their post hearing briefs to the Board, this case represents one of the first situations where the General Counsel is actively working to impact the topics outlined in her advice memo. As we previously discussed, in August of 2021 General Counsel Abruzzo issued her Mandatory Submissions to Advice memorandum. In that memo she outlined several doctrinal shifts she was seeking. The first shift outlined in the memo related to Employer Handbook rules.

While it is unclear how the Board will decide the current case, it is clear that the General Counsel is holding true to her word in seeking to modify current Board law. Employers should continue to monitor Board decisions, given the significance of the issues the General Counsel is looking to modify and the complexity associated with them.

If you have any questions regarding the Board’s current makeup, or any labor & employment questions, please contact one of Frantz Ward’s labor & employment attorneys.

Although the U.S. Women’s National Soccer Team’s pay discrimination settlement this week was notable for its $24 million price tag, it is also notable because it highlights the very real risk that employers face over unequal pay practices.

Members of the USWNT originally filed the case in 2019 accusing U.S. Soccer (the sport’s governing body) of gender discrimination under the federal Equal Pay Act. The core allegation in the case was that members of the women’s national team were improperly paid less than members of the men’s team. The players supported their allegation in part by noting that they were much more successful than the higher paid members of the men’s team and they essentially performed the same job duties. The resulting litigation was as controversial as it was contentious.

As many employers have learned the hard way, federal and state employment laws prohibit employers from maintaining pay practices that discriminate on the basis of sex. These laws can be complicated, and even companies with well-staffed HR and compliance departments can find themselves targeted with claims. Recent settlements by KPMG ($10 million) and Google ($2.6 million) are clear examples of this.

Many legal commentators have suggested in the wake of the USWNT settlement that employers use this as a launching pad for an evaluation of their own pay practices, a measure which appears wise given the potential exposure.

If you have questions about this or other Labor and Employment issues, contact Brian Kelly or another member of the Frantz Ward Labor and Employment Practice Group.

Last week, the Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445) (the “Act”), which prohibits the enforcement of mandatory arbitration agreements in connection with sexual harassment and sexual assault claims. The measure had previously passed in the House on February 7th. Although President Biden has not yet signed the Act into law, he has voiced support for the Act, and therefore, his signature is expected any day.

The Act is a win for #MeToo advocates who have lobbied that mandatory arbitration agreements create a culture of secrecy regarding workplace harassment and have protected serial harassers from public scrutiny. The Act was passed approximately four years after the #MeToo movement gained momentum in the fall of 2017.

Employers who utilize employee arbitration agreements should take note of the following key points in the Act:

  • The Act only prohibits the enforcement of arbitration agreements for certain claims. Accordingly, employers do not need to nullify current arbitration agreements or refrain from providing arbitration agreements to new hires.
  • Arbitration agreements can still be enforced in connection with other employment-related claims, such as other forms of discrimination or harassment.
  • Arbitration of sexual harassment or sexual assault claims is permitted if the employee bringing the claim selects arbitration rather than court.
  • The Act will apply to any claim that accrues after the enactment of the law. Therefore, it will not affect any claims currently in arbitration.

The Bureau of Workers’ Compensation (BWC) began the new year with a rate reduction for Ohio’s public employers, estimating that those employers will pay nearly $17 million less in workers’ compensation insurance premiums next year thanks to the cut. The BWC announced that this 10% rate reduction was made possible by a decline in injury claims and low medical inflation costs by Ohio’s public taxing districts. The BWC is now weighing whether to also cut rates for Ohio’s private employers, with the same 10% reduction going to a vote by the agency’s Board of Directors at its February 25th meeting.  

For Ohio’s private employers, the 10% rate reduction would amount to nearly $106 million less in premiums paid for the next fiscal year. If approved, it will go into effect on July 1, 2022.  

In a press release from January 28th, the BWC boasts that the overall average rate levels for the 249,000 private and public Ohio employers in the BWC’s system are at their lowest in 40 years.  For Ohio’s public employers—which include the state and any political subdivisions of the state, school districts, state institutions of higher learning, and other state agencies, commissions, and boards—this rate reduction was the 13th cut since 2009, as the BWC notes in a prior press release from January 3rd. In that same press release, the BWC noted that there have been 11 rate reductions for private employers since 2008, not including the one going to a vote on February 25th. If approved, the rate cut for private employers would also be the fourth since Governor DeWine took office in 2019.  

Finally, for both public and private employers, the 10% rate cut represents a statewide average, but the actual premiums paid by employers are determined by a number of different factors, including expected future claim costs of their particular industry, their claims history, and their participation in certain BWC programs that could entitle them to various rebates and discounts.  

Shortly after taking office in January, 2021, President Biden created the White House Task Force on Worker Organizing and Empowerment. The Task Force’s mission is to develop policies, programs and practices to promote worker organizing and collective bargaining. It is chaired by Vice President Harris, its vice chair is Labor Secretary Marty Walsh, and its members include more than 20 federal agencies.

In October, 2021, the Task Force presented almost 70 recommendations to the White House, all of which were accepted by the President and announced by the Task Force in a press release issued on February 7, 2022. The recommendations are contained within a 45-page report and are designed to promote and increase unionization in both the public and private sectors. The suggested actions to be taken are far ranging and include eliminating barriers to union organizers and increasing worker’s access to information regarding their right to bargain collectively and the process by which to do so. More specifically, the recommendations include:

  • Ensuring workers know their rights with respect to union organizing and bargaining.
  • Establishing a resource center on unions and collective bargaining.
  • Collecting and reporting more information on unions and their role in the U.S. economy.
  • Providing information about an employer’s use of anti-union consultants.
  • Protecting workers who face illegal retaliation when they organize and when they assert their right to organize.
  • Supporting worker organizing and collective bargaining in underserved communities in order to advance equity in those areas.

The Task Force report follows several other pro-union initiatives and actions from the Biden Administration in the preceding weeks, such as:

  • The Biden Administration’s January 21, 2022 “Good Jobs” initiative that, similar to some of the Task Force recommendations, is designed to provide additional information to workers and support organizing efforts. (Click HERE to read)
  • The memo issued by the NLRB on February 1, 2022, in which General Counsel Jennifer Abruzzo announced an initiative to seek injunctions under Section 10(j) of the National Labor Relations Act in certain cases where workers have been subjected to threats or other coercive action during an organizing campaign.
  • President Biden’s February 4, 2022 Executive Order mandating that all federal construction projects valued at $35 million or more must use a project labor agreement, which is a labor agreement between employers and trade unions that establishes common labor and dispute resolution terms for that project.

As the Biden Administration continues on its path of increasing union membership and unionized workforces, we will keep you informed of the latest developments and hurdles facing U.S. businesses.

If you have questions about this or other labor or employment issues, please contact Joel Hlavaty or another member of the Frantz Ward Labor & Employment Group.