These Newsletters are not intended as legal advice since each situation depends specifically on the facts presented. Persons reading these Newsletters should seek competent legal advice with regard to the subjects contained herein before making any employment or other decisions.
Inside This Issue
1. NLRB Retains Contract-Bar Doctrine
2. All Employers Should Have A Written Expense Reimbursement Policy
3. The Illinois Freedom to Work Act Was Amended To Prohibit Non-Compete Agreements For Low Wage Workers
4. Employers Must Review Their Handbooks To Insure They Are Lawful
5. Employers Should Revisit Their Practices Regarding Determining Who Is Exempt or Non-Exempt From Receiving Overtime
6. How Has Illinois Cannabis Law Affected Workplace Drug Policies?
7. Is Scienter Required Under the False Claims Act?
NLRB Retains Contract-Bar Doctrine
In a recent case Mountainaire Farms, Inc., the National Labor Relations Board (NLRB) retained its long-standing contract-bar doctrine which provides that the NLRB will not process representation or de-certification petitions (elections) which are filed during the first 3 years of a valid collective bargaining agreement, except for petitions filed during a specified member “window period” before the expiration of the CBA. However, CBAs which are more than three years in length, the same rules apply at the end of the third year.
The majority of the NLRB members reversed the regional director’s finding that the contract-bar did not apply in the Montainaire case because the CBA contained a clearly unlawful union security clause.  The NLRB majority found that the union security clause was capable of lawful interpretation which permitted the contract-bar rule to be applied. One NLRB member dissented.
 In decertification election employees can ask for an election for the 30-day period that begins 90 days and ends 60 days before CBA expiration.
 Union security clauses generally require union membership in fixed industry CBAs after 30 days of employment and in construction contracts after the 7th day of employment.
All Employers Should Have A Written Expense Reimbursement Policy
Under the Illinois Wage Payment and Collection Act, employers are required to reimburse their employees for work-related expenses. All employers should have a written business expense reimbursement policy identifying scope of the policy, the purpose of the policy, policy elements which will include the expenses that will be paid and name the type of documents/receipts needed for possible reimbursement.
The policy should limit reimbursement to “reasonable business expenses” which may or may not be approved. Equally important, the policy should identify the expenses which will not be reimbursed such as room or travel upgrades. Make certain to include a definition of work-related expenses and inform employees if an employee is uncertain as to reimbursement, the policy should direct the employee to obtain prior written approval from HR or the president of the company.
The policy should include a time limit as to when the expense report must be submitted to the company in order to be reimbursed and what will occur if the expense report is late.
We have developed a policy which can be adapted to any of our clients’ wishes. If you would like such a policy developed, please email Stan at email@example.com
The Illinois Freedom to Work Act Was Amended
To Prohibit Non-Compete Agreements For Low Wage Workers
A new version of the law takes effect on January 1, 2022 which imposes restrictions to non-compete and non-solicitation provision for any worker making less than $45,000 annually. Non-solicitation under the new law includes restriction on soliciting other employees for employment, soliciting clients, vendors and most other business relationships in order to impose the non-compete law on any worker making less than $75,000 a year. The annualized earnings minimum is scheduled for increase starting in 2027 through 2037.
Carefully drafted non-competes can be enforceable depending on the scope and the breadth of the non-compete. Under the new law a non-compete provision which is too broad and includes any term that imposes adverse financial consequences on former employees if the former employee engages in competitive activities after termination is unenforceable. The law that takes effect on January 1, 2022 has a special provision which applies to all employees regardless of compensation amount who have been furloughed, laid off or fired because of Covid-19 or similar circumstances to the Covid-19 requiring the employee to be paid throughout the entire period of the covenant not to compete. Employers can avoid this provision by paying the employee throughout the period of the covenant.
Under case law the consideration must be specific to be enforceable and the employee must have worked for the employer at least two years after signing the non-compete or have received separate consideration in the form of other benefits.
Employers should not create any covenants which will apply after January 1, 2022, unless the employer evaluates carefully the impact of any changes this fall or winter before any changes go into effect.
Employers Must Review Their Handbooks To Insure They Are Lawful
A section of a handbook to review concerns lactation and breastfeeding. These are protected under the Illinois Nursing Mothers in the Workplace which gives employees who need to express milk time to do so during break periods and the employee must be given reasonable break time as needed, unless the break will create undue hardships.
As to pregnancy, all Illinois employers must have a pregnancy policy if they have an employee handbook. The policy must provide for reasonable accommodation under the Illinois Human Rights Act.
Employers can have an employee policy restricting the possession or use of weapons on any property owned, leased or controlled by the employer. Employers, however, cannot restrict an employee from lawfully carrying or storing a firearm in their personal vehicle parked in the employer’s designated parking areas. The firearm to be stored in the vehicle is only permissible if the firearm is lawfully possessed by the employee and is in a locked vehicle or locked-in container out of plain view.
As reported in earlier Newsletter, the Illinois Wage Payment and Collection Act requires employers to reimburse employees for necessary expenditures within the scope of employment. Employers can, however, require summation of reimbursement within 30 days of the employee incurring the expense.
Vacation policies should be amended to provide that employees do not accrue vacation when they are out on leaves of absence, layoffs, or not working for the company since the employee is not rendering a service.
The above list is not exhaustive, but is based upon experience of the writer. Remember, employers are NOT required to have a handbook.
Employers Should Revisit Their Practices Regarding
Determining Who Is Exempt or Non-Exempt From Receiving Overtime
The Federal Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Act should be reviewed. The Illinois law generally follows the FLSA.
The following categories are generally exempt from overtime: executive, administrative, professional, computer and outside sales. There is a minimum pay amount of $684 per week for the first four categories, except if a computer expert is paid hourly, the minimum hourly wage is $27.63 an hour. An executive is one whose primary duty consists of management of an enterprise, department or subdivision of a department. Administrative is a person whose primary duty consists of performance of office or non-manual work directly related to management policies or operations of the employer.
A learned professional is one whose primary duties consist of performing work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study and who consistently exercises discretion or judgment.
Estimators in construction immediately come into focus since not all construction estimators acquired a prolonged course of study and exercise discretion and judgment. Estimators in commercial highrise construction would generally be exempt because of the skill needed and such commercial estimators exercise judgment. But, on the other hand, an estimator who does a “takeoff” of how many lineal feet or square feet are calculated and then such estimator applies a dollar amount to prepare an estimate. It would seem if the IRS did an audit of such person, it would be unlikely that the IRS would find such employee as not exempt from overtime.
The same analysis would apply to computer experts since a review is needed in terms of application of how highly specialized is the person’s knowledge of computer systems, programming and software.
It would be prudent for all employers to re-examine who is really exempt from overtime to avoid IRS penalties and interest for misclassification.
How Has Illinois Cannabis Law Affected Workplace Drug Policies?
In January 2020 Illinois legalized recreational marijuana. Shortly thereafter Illinois employees began working remotely from home due to Covid-19, which leads to the first question: Can employers lawfully prevent employees from using legal marijuana when working from home? At this moment, there is no certain answer, but consider that employers may apply zero tolerance as to consuming any cannabis in the workplace, which can be the home.
Employers should amend their employment manuals or drug policies to define workplace as any place used by the employer, under the control of the employer and in all company vehicles, fleet or owned. Anytime an employer tries to regulate an employee’s private space, the employer may encounter employee privacy issues.
Consider drafting a policy which regulates the use of legal marijuana by time and not place. Employers can prevent the use of legal marijuana or impairment from legal marijuana while an employee is performing their job, on call, regardless of where the employee happens to be. Employers should also consider defining ”work” by designated working hours such as 8:00 am to 4:00 pm. Remember, employers cannot limit use of legal substances on an employee’s personal time.
Management employees should be trained to recognize an employee with symptoms or signs of impairment while working. A decrease in the employee’s performance could be such an impairment symptom. Sending an employee for a drug test should be considered, but the policy should reflect that positive tests do not necessarily equate to impairment since cannabis may stay in an employee’s system for days. A lax employer could be subject to lawsuits and workers compensation claims. Beware, a surveillance/enforcement policy may infringe on employee’s privacy.
We have developed a policy which can be adapted to most employers. If you need assistance in drafting a drug policy, please email Stan at firstname.lastname@example.org.
Is Scienter Required Under the False Claims Act?
The 7th U.S. Circuit Court of Appeals looked at a case involving whether someone “willfully” violated the False Claims Act (FCA) and said that someone willfully can violate the FCA if they knowingly submitted a false claim because of false representations made about usual and customary prices.
The FCA places civil liability on any person who “knowingly” presents a false or fraudulent claim for payment by the government. The FCA does not define what makes a claim false or fraudulent.
A defendant who acted on an incorrect interpretation of a law or rule did not act with reckless disregard if the interpretation was objectively reasonable so long there was not authoritative guidance to warn the defendants.
The issue in this case is whether the FCA can impose liability on businesses that submit false claims for government payment where the businesses claim there is some legal ambiguity that kept the businesses from knowing for certain that the claims were false. The majority of the 7th Circuit concluded that the FCA created a safe harbor for what some think is deliberate or reckless conduct. The majority of the 7th Circuit said it is irrelevant whether the defendant Supervalue actually believed and/or relied upon its justifications offered in the litigation. Many authors criticize the holding of this case as it appears to be a stretch and unnecessarily carves out an exception with cause. The dissent severely criticized the holding in the case.
 Sceinter is the legal term for intentional knowledge of wrongdoing.
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