Workforce Bulletin

As featured in #WorkforceWednesday®: This week, we’re spotlighting the Federal Trade Commission’s (FTC’s) decision to withdraw from a federal labor pact; the Equal Employment Opportunity Commission’s (EEOC’s) report on alleged underrepresentation in science, technology, engineering, and mathematics (STEM)-related jobs; and an appellate court’s affirmation of the National Labor Relations Board’s (NLRB’s) McLaren Macomb decision.

In a win for businesses, the Massachusetts Supreme Judicial Court (“SJC”) has ruled that individuals in true franchisor-franchisee relationships are independent contractors. In Patel v. 7-Eleven, Inc., the SJC found that defendant franchisor 7-Eleven, Inc. (“7-Eleven”) did not misclassify certain franchisees in violation of the Commonwealth’s independent contractor statute, M.G.L. c. 149, § 148B, which presumptively considers an individual “performing any service” for a putative employer to be an employee of said putative employer, rather than an independent contractor, unless: (1) the individual is free from control and direction in connection with the performance of the service; (2) the service is performed outside the usual course of the business of the employer; and (3) the individual is customarily engaged in an independently established trade, occupation, profession or business of the same nature at that involved in the service performed.

In a long saga to determine whether 7-Eleven properly classified certain franchisees as independent contractors, the United States Court of Appeals for the First Circuit (“First Circuit”) certified two questions to the SJC. On the first question back in 2022, the SJC ruled that where a franchisee is an “individual performing any service” for a franchisor, the independent contractor statute applies to the relationship between the franchisor and the franchisee. The decision here involved a second question that the First Circuit certified to the SJC related to the threshold determination of the independent contractor statute:

Do the plaintiffs perform any service for 7-Eleven within the meaning of the independent contractor statute, where, as here, they perform various contractual obligations under the Franchise Agreement and 7-Eleven receives a percentage of the franchise’s gross profits?

As featured in #WorkforceWednesday®: This week, we’re interpreting the U.S. Department of Labor’s (DOL’s) recently updated cybersecurity guidance for all employee benefit plans covered under the Employee Retirement Income Security Act (ERISA).

The DOL recently clarified that its 2021 cybersecurity guidance applies to all ERISA-covered employee benefit plans, including health and welfare plans. This clarification raises important questions for employers regarding compliance and security.

Epstein Becker Green attorneys Brian G. Cesaratto and Samuel C. Nolan provide their analysis of the key cybersecurity considerations and best practices for risk mitigation that employers should consider in light of the updated guidance.

As featured in #WorkforceWednesday®: This week, we take a closer look at the U.S. Court of Appeals for the Fifth Circuit’s decision to strike down the Department of Labor’s (DOL’s) tip credit rule but to uphold the agency’s authority to set a minimum salary threshold for overtime exemptions.

The Fifth Circuit recently struck down the DOL’s tip credit rule, finding that the agency had exceeded its authority under the Fair Labor Standards Act. However, that same court later upheld the DOL’s authority to set a minimum salary threshold for overtime exemptions.

Epstein Becker Green attorney Paul DeCamp, who represented the restaurant plaintiffs in the tip credit case alongside Kathleen Barrett, offers his interpretation of these significant court decisions and what they mean for employers.

The widespread availability of Artificial Intelligence (AI) tools has enabled the growing use of “deepfakes,” whereby the human voice and likeness can be replicated seamlessly such that impersonations are impossible to detect with the naked eye (or ear). These deepfakes pose substantial new risks for commercial organizations. For example, deepfakes can threaten an organization’s brand, impersonate leaders and financial officers, and enable access to networks, communications, and sensitive information.

In 2023, the National Security Agency (NSA), Federal Bureau of Investigations (FBI), and Cybersecurity and Infrastructure Security Agency (CISA) released a Cybersecurity Information Sheet (the “Joint CSI”) entitled “Contextualizing Deepfake Threats to Organizations,” which outlines the risks to organizations posed by deepfakes and recommends steps that organizations, including national critical infrastructure companies (such as financial services, energy, healthcare and manufacturing organizations), can take to protect themselves. Loosely defining deepfakes as “multimedia that have either been created (fully synthetic) or edited (partially synthetic) using some form of machine/deep learning (artificial intelligence),” the Joint CSI cautioned that the “market is now flooded with free, easily accessible tools” such that “fakes can be produced in a fraction of the time with limited or no technical expertise.” Thus, deepfake perpetrators could be mere amateur mischief makers or savvy, experienced cybercriminals. 

We previously wrote about a Michigan Supreme Court decision to reinstate two voter initiatives – the Wage Act and the Earned Sick Time Act (ESTA) – and state agency responses to that decision (the “Original Order”), which included the filing of a motion asking the court to clarify the Original Order. On September 18, 2024, the Michigan Supreme Court responded, granting the request for immediate consideration and issuing a thirteen-page Order (the “Clarification Order”).

New Details on Coming Adjustments to Michigan Wage Rates

Tip Credit Phase Out

The substantive portion of the Clarification Order re-writes a lengthy and important footnote in the Original Order, including an extension of the gradual phase-out of the tip credit and a clearer definition of the annually increasing percentage amount. Instead of merely saying “The tip credit will be [XX]% of minimum wage,” the Clarification Order provides that “tipped workers’ minimum hourly wage rate must be at least [XX]% of the general minimum wage rate, and the tip credit can be used to satisfy the balance owed to such workers.”

In other words, the Clarification Order spells out that, for example, “80%” means that tipped workers must be paid a base rate that is at least 80% of the general minimum hourly wage rate.

In recent years, advocates and lawmakers have been pushing to expand the reach of “ban-the-box” measures designed to remove job barriers for individuals with criminal convictions. “Ban-the-box” laws, also called “fair chance laws,” are designed to prevent employers from excluding applicants based on their criminal history alone, by prohibiting employers from immediately inquiring into an applicant’s criminal history before evaluating their qualifications.

Ban-the-box laws have been adopted federally (for federal agencies and federal contractors acting on their behalf) and in numerous states and local jurisdictions. These laws generally contain broad carve-outs for employers or positions where background checks are required, including within the financial services industry. Some changes are coming to narrow those exemptions. On December 23, 2022, President Biden signed into law the Fair Hiring in Banking Act (FHBA), which substantially revised Section 19 of the Federal Deposit Insurance Act (FDIA) to reduce hiring barriers within the financial services sector.

Over the past several years, the number of states with comprehensive consumer data privacy laws has increased exponentially from just a handful—California, Colorado, Virginia, Connecticut, and Utah—to up to twenty by some counts. Many of these state laws will go into effect starting Q4 of 2024 through 2025.

We have previously written in more detail on New Jersey’s comprehensive data privacy law, which goes into effect January 15, 2025, and Tennessee’s comprehensive data privacy law, which goes into effect July 1, 2025. Some laws have already gone into effect, like Texas’s Data Privacy and Security Act, and Oregon’s Consumer Privacy Act, both of which became effective July of 2024. Now is a good time to take stock of the current landscape as the next batch of state privacy laws go into effect.

As featured in #WorkforceWednesday: This week, on our Spilling Secrets podcast series, our panelists delve into the implications for employers following the recent blockage of the Federal Trade Commission’s (FTC’s) non-compete ban.

On August 20, 2024, the U.S. District Court for the Northern District of Texas invalidated the FTC’s non-compete ban, deeming it arbitrary and capricious and beyond the scope of the agency’s statutory authority.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer, Erik W. Weibust, and Paul DeCamp tell us more about the court’s decision to block the ban, what legal challenges remain, and the key considerations for employers moving forward. 

As featured in #WorkforceWednesday®: This week, we’re highlighting a few state-level employment issues, including the legal challenges faced by Staples Inc. regarding the Massachusetts lie detector ban; New Jersey’s implementation of a gender-neutral dress code for businesses; and the varying voting leave policies across states in preparation for the November election.