In a recent decision (Xu v. Epic Systems, Inc.), the Wisconsin Labor and Industry Review Commission has held that an employee’s discrimination claims under the Wisconsin Fair Employment Act (WFEA) are not waivable. Specifically, the Commission found:
- Wisconsin employees cannot waive the right to file a discrimination complaint against his employer under the WFEA, and
- An employee may prosecute WFEA claims against his former employer – even if he previously waived and released those claims in a valid severance agreement.
In this case, a former employee had entered into a severance agreement with his former employer where, among other things, the employee agreed to waive any claims under the WFEA in exchange for a severance payment.
The severance agreement also contained a standard provision intended to comply with federal law which prohibits the waiver of the right to file a charge or complaint with certain federal agencies (e.g., the U.S. Equal Employment Opportunity Commission (EEOC), the Securities and Exchange Commission, the Occupational Safety and Health Administration, the National Labor Relations Board), which stated the following:
Nothing in this release is a waiver of a right to file a charge or complaint with administrative agencies such as the federal EEOC that I cannot be prohibited from or punished for filing as a matter of law, but I waive any right to recover damages or obtain individual relief that might otherwise result from the filing of such charge with regard to any released claim.
After signing the agreement, the former employee filed a complaint with the EEOC for race discrimination. While the EEOC charge was dismissed, the former employee’s charges were cross-filed with the Wisconsin Equal Rights Division, where the employee claimed that the employer’s conduct also violated the WFEA. Due to the severance agreement, the Division dismissed the claim and the employee appealed the dismissal to the Commission.
The Commission found even though the former employee had waived his right to recover any damages for violations of the WFEA, due to the standard clause (quoted above), he had not waived his right to file a charge with the Division. Moreover, the Commission also concluded that employees cannot be precluded from filing a complaint with the Division.
Wisconsin Governor Scott Walker recently signed 2017 Wisconsin Act 11 into law. This new law updates and modernizes the Wisconsin “child labor” laws.
This act made two major changes to the child labor laws in Wisconsin. The first was cosmetic – changing references from “child labor” to “employment of minors.” The second was substantive – repealing the requirement that 16- and 17-year-olds obtain a state-issued permit before they can begin most work activities. Under the new law, 16- and 17-year-olds who wish to perform work in Wisconsin will no longer need to obtain a work permit.
The new law does not remove the following requirements:
- Minors 14 years and younger are prohibited from most employment in the state of Wisconsin;
- Minors younger than 16 year are still required to obtain work permits for a $10 licensing fee (which must be reimbursed by their employers);
- The existing laws regarding the hours of work and conditions of employment for minors did not change.
The new law went into effect on June 23, 2017. Wisconsin employers who employ minors should review their hiring practices and verify they comply with the Wisconsin child labor laws.
Thirty-five states have agreed to “team up” with the US Department of Labor to investigate worker misclassification. Is your state one of them?
In 2015, Department of Labor launched an initiative to combat the misclassification of employees as independent contractors. As a part of this initiative, the Department of Labor sought to partner with the state agencies and agree to share information and conduct joint investigations regarding independent contractor misclassification. To date, 35 states have entered into a memorandum of understanding regarding worker misclassification issues.
These states are:
- New Hampshire
- New Mexico
- New York
- North Carolina
- Rhode Island
- South Dakota
What does this mean for employers in these states?
Employers in the above-listed states should expect collaborative efforts between their state agencies and the Department of Labor during a investigation into potential employee misclassification as the state and the Department of Labor will share information. This could lead to simultaneous, multi-agency investigations into worker classification. It is recommended that companies have qualified legal counsel review any existing independent contractor arrangements. In addition, before entering into an independent contractor relationship, speak with an HR Professional or qualified legal counsel to verify that the worker truly is an independent contractor.
In a recent court case (The Manitowoc Company v. Lanning), the Wisconsin Court of Appeals has held that the “anti-poaching” provision of an employer’s non-compete agreement is unlawful.
An “anti-poaching” provision is a common element of a non-compete agreement where the former employee agrees not to “solicit, induce, or encourage” employees to “terminate their employment” or “accept employment with any competitor, supplier, or customer.”
The Wisconsin Court found that such provisions were overly broad and constituted an unfair restraint on trade. According to the Court, the language in the anti-poaching provision in question was so broad that it restricted an employee from encouraging a colleague to retire or change industries – even though those actions did not pose a no competitive threat to the company. The provision also prevented a former employee from encouraging a company employee to work for a business that is not in any way competitive with the company. Such restrictions are unreasonable and, at least in Wisconsin, unlawful.
The Court did note, however, that not all anti-poaching provisions are unlawful. Such a restriction is permissible to the extent that it is “reasonably necessary to protect the employer from unfair competition.” In order to be lawful, the provision must be narrowly tailored to only protect the legitimate business interests of the employer.
Take Home for Employers
This case shows Wisconsin employers that non-compete agreements will be reviewed with strict scrutiny by Wisconsin courts. It is recommended that Wisconsin employers who use non-compete agreements review these agreements and verify that the agreements comply with Wisconsin law.
On April 1, 2016, Wisconsin Governor Scott Walker signed Senate Bill 517 into law. This bill requires covered Wisconsin employers (in other words, employers who employ 50+ employees in Wisconsin) to provide leave to their employees for the purpose of donating bone marrow or an organ.
Under this new law, eligible employees are entitled to receive up to 6 weeks of job-protected, unpaid leave in a 12-month period for the purpose of donating bone marrow or an organ. To be eligible for this leave, an employee must:
- have been employed by the same employer for more than 52 consecutive weeks and
- have worked for the employer for at least 1,000 hours during the preceding 52-week period.
Employees requesting this leave must provide their employers with advance notice of the bone marrow or organ donation and must make a reasonable effort to schedule the donation so that it does not “unduly disrupt the operations of the employer.”
In addition, employers may require that an employee provide medical certification that contains the following information:
- That the donee has a serious health condition that necessitates a bone marrow or organ transplant.
- That the employee is eligible and has agreed to serve as a bone marrow or organ donor for the donee.
- The amount of time expected to be necessary for the employee to recover from the bone marrow or organ donation procedure.
The right to take donor leave is in addition to an employee’s right to take leave under the FMLA laws (in other words, this leave does not run concurrently with Wisconsin FMLA or federal FMLA). In addition, employers must maintain an employee’s group health insurance benefits during the approved donor leave if the employee had coverage under the plan immediately before the leave.
Finally, Wisconsin employers will be required to post a poster conspicuously in the workplace informing employees of their rights to donor leave. This poster has not yet been released but will be issued by the Wisconsin Department of Workforce Development. Once the poster is available, we will advise employers.
The new law goes into effect on July 1, 2016. Wisconsin employers should prepare for the new leave by updating their handbooks and obtaining and posting the required poster when it becomes available.
The Wisconsin Department of Workforce Development has updated the Unemployment Insurance Notice. This newly revised notice must be posted by all Wisconsin employers.
Under Wisconsin law, this new notice must be posted in locations “where employees will easily see it. The notice is available here.
It is recommended that all Wisconsin employers review their postings and replace their old Unemployment Insurance Notice with this new notice.
This week Wisconsin became the 25th state to pass “right to work” legislation. Wisconsin’s new law prohibits employers from requiring employees to join a union or pay union dues as a condition of employment.
- The law will apply to collective bargaining agreements renewed, modified or extended on or after March 11, 2015.
- Employers may not require as a condition of obtaining or continuing employment an individual to:
- Refrain or resign from membership in, voluntary affiliation with or voluntary financial support of a labor organization;
- Become or remain a part of a labor organization;
- Pay any dues, fees, assessments or other charges or expenses of any kind or amount, or provide anything of value, to a labor organization; or
- Pay to any third party an amount that is in place of, equivalent to or any portion of dues, fees, assessments or other charges or expenses required of members of, or employees represented by, a labor organization.
- When the law is applicable to the employer, they may not deduct union dues from an employee unless that employee has presented the employer with a personally signed order, even if there is an all-union agreement in effect and will not need to give the labor organization notice if an employee has decided to terminate the deduction of labor organization dues or assessments from their earnings.
- Employees may, nonetheless, have to follow union bylaws in order to resign from the union.