New FEHA Regulations Impose Additional Policy and Training Requirements on Employers
Employers should review their applicable policies and training practices for compliance with new California Fair Employment and Housing Act regulations that went into effect this year. Although there were several changes (summarized here by the Department of Fair Employment and Housing), the most important changes focused on new requirements for anti-harassment policies and related supervisor training.
- Policies — Employers with five or more employees must create and distribute detailed written policies for preventing harassment, discrimination, and retaliation. Such policies must contain various components, including listing all groups protected under California law, instructing supervisors to report all complaints, and providing various avenues for employees to make complaints.
- Training — Employers with 50 or more employees must continue to provide required supervisor anti-harassment training under California law, but must now include additional topics in such training, including supervisors’ obligation to report harassment, discrimination, and retaliation; the steps necessary to remedy harassing behavior, including investigation of complaints; and the elements and negative effects of “abusive conduct” on the victim and employer. In addition, there are new documentation and recordkeeping requirements for the training.
Federal Defend Trade Secrets Act Necessitates Changes to Employee and Contractor Agreements
Companies should update their employee invention assignment agreements and contractor agreements in light of the new federal Defend Trade Secrets Act (“DTSA”) (summarized previously here). The DTSA requires employers to provide notice of whistleblower immunity in any contract or agreement with an employee or independent contractor that governs the use of trade secret or other confidential information if the employer wishes to avail itself of the ability to recover exemplary damages and attorneys’ fees (among other benefits) under the DTSA. We recommend consulting with counsel to discuss how to best implement these changes.
Proposed Rule Would Require Addition of Pay Data to Annual EEO-1 Reports
The Equal Employment Opportunity Commission (“EEOC”) proposed a rule in February of this year that EEO-1 reports must include employee W-2 earnings and hours worked broken down by gender and race/ethnicity and across 12 pay bands starting from the EEO-1 reports due on September 30, 2017. Such data would be available both to the EEOC and the Office of Federal Contract Compliance for enforcement purposes. The rule was subject to a 60-day notice and comment period, which ended in April 2016. On July 13, 2016, the EEOC released a revised (although substantively similar) proposal for further comment, which adopted specific suggestions provided by commenters, such as moving the due date for the report from September to March 31, 2018, but still requires the disclosure of earnings and hours across pay bands. If adopted, these new reporting obligations will require very substantial data gathering and analysis by companies; as a result, there has been a storm of employer opposition. We will continue to follow this proposed rule and keep you informed.
Increasing Disapproval of Non-Competes at Federal Level
Although non-competes outside of California are typically enforceable (subject to each state’s laws), the White House issued a report this summer discussing what it believes to be misuse of non-competes, particularly in low-wage fields where they are less likely to have valid uses, or with workers who do not have access to information that would rise to the level of trade secrets. The White House, Treasury, and the Department of Labor intend to convene a group of experts in labor law, economics, government, and business to facilitate discussion on non-competes and their consequences, the goal being to identify key areas where implementation and enforcement of non-competes may present issues, to examine promising practices in states, and to put forward a set of best practices and call to action for state reform. There has been activity regarding non-competes at the state level as well – the state of Washington recently tried, but failed to pass a bill seriously limiting the use and enforceability of non-competes. Given the ongoing scrutiny of non-competes, great care should be exercised in their use, keeping each state’s individual requirements in mind.