Latest Labor Board guidance may create more confusion and risk for HR

On August 14, 2019, the National Labor Relations Board ruled in Cordúo Restaurants, Inc. that an employer could change its mandatory arbitration agreement to bar its workers from opting into a class action in response to being sued for wage and hour violations, and that a supervisor’s threatening statements to workers that they would be fired if they failed to sign the agreements did not violate Section 7 of the National Labor Relations Act (NLRA). You can read the full ruling here.

Curdúo isn’t a Green Light

Despite the apparent breadth of the ruling, however, it’s unclear whether the ruling will have any practical impact on employers’ use of arbitration agreements. In fact, the ruling could be misinterpreted by employers as an unqualified green light to firing workers who file or opt-in to class action wage and hour lawsuits, which it isn’t. Such terminations, depending on the surrounding facts, remain legally risky under both the NLRA and the anti-retaliation provisions of federal and state wage and hour laws.

It’s also possible that the ruling may be short lived and could be overturned either on appeal or when the composition of the Board changes. In her dissent, Board member Lauren McFerran pointed out that “under long-established precedent” the arbitration agreement should have been ruled a violation of the NLRA because it was implemented in response to the workers’ suit and was meant to discourage employees from engaging in conduct protected by the Act, namely opting into the lawsuit.

Therefore, the Curdúo ruling dictates that employers speak to their employment lawyers before implementing or amending arbitration agreements covering workplace claims. As we wrote here, arbitration agreements are not always a good idea for employers and, depending on the timing and motivation behind them, could be unlawful.

Illinois Employers Must Remain Focused on Compliance, Particularly with New Laws

At the same time, Illinois employers should work with their attorney to monitor changes in employment laws and promptly take measures to comply. This year alone, lawmakers in Springfield and Chicago already have passed several new laws which will keep employers busy for months to come, and more are expected ahead of the typical election season lull, including:

1. Amendments to the Illinois Equal Pay Act (effective September 2019), which ban pay history inquiries and prohibits employers from requiring workers to sign contracts that prevent them discussing their pay with coworkers and others, with some exceptions. Details can be found here.

2. New EEO-1 Disclosure Rules, which require employers who file EEO-1 reports to provide pay data for the EEOC for 2017 and 2018 under component 2 of the EEO-1 report by September 30, 2019. Details can be found here.

3. Amendments to the Illinois Right to Privacy in the Workplace Act (effective January 1, 2020), which change discrimination and drug testing laws to account for the decriminalization of recreational marijuana use. Details can be found here.

4. Amendments to the Illinois Human Rights Act (effective January 1, 2020) that expand anti-discrimination protections to virtually every employer with as few as one worker. Details can be found here.

5. Chicago’s “Fair Workweek Ordinance” (effective July 1, 2020), a predictive scheduling ordinance which requires employers to give employees their schedules in advance and sets employee pay at a higher rate when changes are made to work schedules. More details are available here.

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Gary Savine is an Illinois employment lawyer and founder of Savine Employment Law, Ltd. in Chicago. Gary regularly advises human resources professionals on recently enacted employment laws.

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