Photo of Carolyn Rashby

Carolyn Rashby

Carolyn Rashby provides business-focused advice and counsel to companies navigating the constantly evolving and overlapping maze of federal, state, and local employment requirements. She conducts workplace investigations and cultural assessments, leads audits regarding employee classification, wage and hour, and I-9 compliance, advises on employment issues arising in corporate transactions, and provides strategic counsel to clients on a wide range of workplace matters, including harassment and #MeToo issues, wage and hour, worker classification, employee accommodations, termination decisions, employment agreements, trade secrets, restrictive covenants, employee handbooks, and personnel policies. Her approach is preventive, while recognizing the need to set clients up for the best possible defense should disputes arise.

Since 2020, with the adoption of Washington state’s non-compete statute (Chapter 49.62 of the Revised Code of Washington (“RCW 49.62”)), Washington has imposed significant restrictions on employer use of non-compete agreements with employees and independent contractors, permitting such agreements only subject to certain statutory and common-law requirements, including without limitation, a minimum annual earnings threshold (the 2024 limits are $120,559.99 for employees and $301,399.98 for independent contractors), and a Washington forum for any disputes.

Now, Senate Bill 5935 (“SB 5935”) – which takes effect on June 6, 2024 – amends the non-compete statute to further restrict the use of non-compete provisions and expand the types of agreements that may be considered non-competes. As a result, employers will need to take quick action to review their employment agreements and hiring processes to ensure compliance with the new law.

However, as discussed in our Covington Alert, on April 23, 2024 the Federal Trade Commission issued a final rule purporting to ban the use of non-competes with most U.S. workers.  The FTC Rule – should it become effective – would supersede inconsistent state laws.  The earliest the FTC Rule would take effect is late August 2024, and pending legal challenges may result in court orders that could delay or stay enforcement of the FTC Rule. Accordingly, employers with workers in Washington State should take steps to comply with SB 5935 before it takes effect on June 6, 2024.  Employers should also consider consulting with employment and executive compensation counsel for assistance with navigating the evolving non-compete landscape.

Here is an overview of the key changes under SB 5935:Continue Reading Changes to WA’s Non-Compete Law Require Employers to Take Action

On September 6, 2023, U.S. Senator Bill Cassidy, ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, published a white paper addressing artificial intelligence (AI) and its potential benefits and risks in the workplace, as well as in the health care  context, which we discuss here.

The whitepaper notes that employers

On April 25, 2023, four federal agencies — the Department of Justice (“DOJ”), Federal Trade Commission (“FTC”), Consumer Financial Protection Bureau (“CFPB”), and Equal Employment Opportunity Commission (“EEOC”) — released a joint statement on the agencies’ efforts to address discrimination and bias in automated systems. 

The statement applies to “automated systems,” which are broadly defined “to mean software and algorithmic processes” beyond AI.  Although the statement notes the significant benefits that can flow from the use of automated systems, it also cautions against unlawful discrimination that may result from that use. 

The statement starts by summarizing the existing legal authorities that apply to automated systems and each agency’s guidance and statements related to AI.  Helpfully, the statement serves to aggregate links to key AI-related guidance documents from each agency, providing a one-stop-shop for important AI-related publications for all four entities.  For example, the statement summarizes the EEOC’s remit in enforcing federal laws that make it unlawful to discriminate against an applicant or employee and the EEOC’s enforcement activities related to AI, and includes a link to a technical assistance document.  Similarly, the report outlines the FTC’s reports and guidance on AI, and includes multiple links to FTC AI-related documents.

After providing an overview of each agency’s position and links to key documents, the statement then summarizes the following sources of potential discrimination and bias, which could indicate the regulatory and enforcement priorities of these agencies.

  • Data and Datasets:  The statement notes that outcomes generated by automated systems can be skewed by unrepresentative or imbalanced data sets.  The statement says that flawed data sets, along with correlation between data and protected classes, can lead to discriminatory outcomes.
  • Model Opacity and Access:  The statement observes that some automated systems are “black boxes,” meaning that the internal workings of automated systems are not always transparent to people, and thus difficult to oversee.
  • Design and Use:  The statement also notes that flawed assumptions about users may play a role in unfair or biased outcomes.

We will continue to monitor these and related developments across our blogs.Continue Reading DOJ, FTC, CFPB, and EEOC Statement on Discrimination and AI

As we discussed in a previous post, effective January 1, 2023, California employers must include pay scales in job postings, and a similar bill in New York was awaiting signature by Governor Kathy Hochul. The California Labor Commissioner has now issued guidance to assist employers in complying with the new law, and the New York State bill was signed into law on December 21, 2022 and is set to take effect on September 17, 2023.

California

The California Labor Commissioner recently published FAQs (adding to existing FAQs under the state’s equal pay law) with insights for employers on some gray areas in the new law:

Threshold for coverage.The FAQs clarify that an employer is covered by the pay transparency requirements if it reaches the threshold of 15 employees at any point in a pay period they compensate their workers at the minimum higher wage rate for the duration of the entire pay period and going forward as long as they have a minimum of 15 employees. Also, all employees, regardless of the number of hours worked or geographical location, will be included in the count, so long as there is at least one employee located in California.

Job postings for remote positions.The Labor Commissioner interprets the new law to mean that the pay scale must be included on a posting if the position may ever be filled in California, whether in-person or remote.

Information to include in job postings.The FAQs confirm that “pay scale” means the salary or hourly wage range that the employer reasonably expects to pay for a position, and can include just a set hourly or piece rate, rather than a range, if that is what the employer intends to pay. If the position’s hourly or salary wage rate will be based on a piece rate or commissions, the piece rate or commission range must be included in the job posting; however, the posting does not need to include bonuses, tips, or other compensation or tangible benefits provided in addition to a salary or hourly wage. Finally, the Labor Commissioner states that the pay scale must be expressly stated in the posting, and it will not be sufficient to comply with the new law to take shortcuts such as linking the salary range in an electronic posting or including a QR code in a paper posting that will then take the applicant to the salary information.Continue Reading Update on California and New York Pay Transparency Laws

Many employers and employment agencies have turned to artificial intelligence (“AI”) tools to assist them in making better and faster employment decisions, including in the hiring and promotion processes.  The use of AI for these purposes has been scrutinized and will now be regulated in New York City.  The New York City Department of Consumer

A new law signed by President Biden brings significant changes to employers’ ability to require arbitration of certain disputes with employees and could lead to an increase in sexual assault and sexual harassment claims against employers in court.  On March 3, 2022, President Biden signed into law the “Ending Forced Arbitration of Sexual Assault

In a development that will sound familiar to employers, California has reinstated the requirement, which had expired last fall, to make available to employees up to 80 hours of COVID-19 supplemental paid sick leave (“Supplemental Sick Leave”).  The new measure, Senate Bill (“SB”) 114, was signed by Governor Newsom on February 9, 2022, and the requirement to provide the new sick leave went into effect on February 19. Employees may use the new sick leave retroactive to January 1, 2022.

New Supplemental Sick Leave Requirements

Following is an overview of the new and more expansive requirements under SB 114, which applies to employers with more than 25 employees.

Hours of Leave.  Full-time employees are entitled to up to 80 total hours of Supplemental Sick Leave for specified reasons and divided into two 40-hour buckets, described below.  Part-time employees are entitled to prorated leave equivalent to either their typical hours worked in a week, or seven multiplied by the average number of hours they have worked each day in the last six months.

The two buckets of leave are as follows:

First, full-time employees may use up to 40 hours of Supplemental Sick Leave when they are unable to work or telework for any of these reasons:

The employee is subject to a quarantine or isolation period related to COVID-19, as defined by an order or guidelines of the California Department of Public Health, the U.S. Centers for Disease Control and Prevention, or a local health officer who has jurisdiction over the workplace (if the employee is subject to more than one order/guideline, the employee may use Supplemental Sick Leave for the minimum quarantine or isolation period under the order or guidance that provides for the longest such minimum period);
Continue Reading California Reinstates and Updates COVID-19 Supplemental Paid Sick Leave for 2022

Governor Newsom recently signed into law SB 331 to impose a number of new restrictions on employment settlement, separation, and nondisclosure agreements. Here’s an overview of the new requirements, which apply to agreements entered into on or after January 1, 2022:

First, for settlement agreements involving claims of harassment or discrimination based on any protected