Featured in #WorkforceWednesday:  As employers plan for workers to return to work, utilizing COVID-19 liability waivers is one idea that businesses are thoroughly considering. Attorney Jimmy Oh discusses the risks and effectiveness of these waivers.

Video: YouTubeVimeoMP4Instagram.

 

The beginning of the school year has added to a mire of uncertainty of how to manage work and family in our current COVID-19 world. Some schools have reopened to full-time in-person classes, while others have adopted full-time remote learning; still others have opted a hybrid model that mixes the two, and some give parent the choice of whether to send their children to school or have them login. Added to this, decisions once made are subject to reversal, if new COVID-19 cases enter the picture.  So now, on top of everything else that the COVID-19 crisis has affected, working parents must try to figure out how to manage their children’s education, while trying to maintain their financial security. And, as always, employers need to remain mindful of their compliance obligations.

In response to such concerns, on August 27, 2020, the U.S. Department of Labor added three Frequently Asked Questions (“FAQs”) on the Families First Coronavirus Response Act (“FFCRA”) to its FAQs webpage, addressing some circumstances under which a working parent may –or may not—be entitled to paid leave under the FFCRA. In short, an otherwise eligible employee may be entitled to paid FFCRA leave due to a COVID-19-related school closing to care for a child only if (i) the child’s school is closed; (ii) the employee must “actually care” for the child “during that time,” and (iii) “no other suitable person is available” to care for the child. Although not stated in the new FAQs, eligibility for FFCRA also requires that the employee not be able to work onsite or through telework.

FAQ #98 states that when a child is on a school-mandated hybrid schedule, which designates certain days for in-school attendance and the other days for remote learning, the school is effectively “closed”  to the child on the days the child is not permitted to attend school in-person. Accordingly, a parent who satisfies the second and third criteria listed above is entitled to paid FFCRA leave for the child’s remote-learning days. FAQ # 99 explains, however, that where a parent is given the choice between full-time, in-school instruction and remote learning, and elects remote learning for their child, the parent is ineligible for FFCRA “school closure” paid leave because the child’s school is open and remote attendance was the employee’s choice.  The FAQ  notes, however, that the parent of a child who is under a quarantine order or has been advised by a health care provider to self-isolate or self-quarantine, may be entitled to FFCRA child care benefits, regardless of whether the child’s school is open (as previously explained in the DOL’s FAQ 63).

FAQ #100 confirms that parents, whose children’s schools have not reopened to in-person instruction yet, may take FFCRA leave while the school remains closed.

Keep in mind that an employee’s entitlement to FFCRA leave has limits. As we previously reported, the FFCRA allows covered employees (i.e., employees who work for an employer with fewer than 500 employees, and, for purposes of expanded family leave benefits, have worked for the employer for at least 30 days) to take paid emergency sick leave for a maximum of two weeks (80 hours), capped at $200 per day and $2,000 in the aggregate, and to receive expanded family leave benefits for a maximum of 12 weeks, with the first two weeks unpaid and the remainder paid at a rate of 2/3 of the employee’s regular rate of pay, capped at $200 per day and $10,000 in the aggregate. Considering the lengthy school closings for the last four months of the previous school year, many employees may have already exhausted their FFCRA benefits. Currently, there is no indication that the U.S. Congress is considering any expansion of these paid leave benefits.

On May 28, 2019, Connecticut Governor Ned Lamont signed Public Act 19-4, An Act Increasing the Minimum Fair Wage (the “Act”), which gradually increases the minimum wage in Connecticut over the next several years.  The first increase took place on October 1, 2019, when the minimum wage increased to $11.00 per hour. The next increase will take effect on September 1, 2020, when Connecticut’s minimum wage will increase to $12.00 per hour.

Additional increases will take place on an annual basis:

  • $13.00 per hour on August 1, 2021
  • $14.00 per hour on July 1, 2022
  • $15.00 per hour on June 1, 2023

Beginning on October 15, 2023, and each October 15th thereafter, the Labor Commissioner will announce the new minimum wage that will become effective on the January 1st immediately following.  Beginning on January 1, 2024, and no later than January 1st each year thereafter, the minimum wage shall be adjusted by the percentage change in the employment cost index for wages and salaries for all civilian workers, as calculated by the United States Department of Labor.

Part 2 of a series featuring our video Rules of the Road: Return to Work in the Time of COVID-19. 

Who would have believed that months into this global pandemic, after the innumerable and unspeakable loss to human life, to global economies, and to our own sense of selves and normalcy – that the relatively straightforward issue of whether to wear a mask to curb the spread of this virus would remain such a hot button topic.  And yet, here we are.

The overwhelming science – yes, science – reported and confirmed by scientists, physicians, and leading health experts across the globe – is that wearing a mask, along with social distancing and frequent handwashing, is probably one of the most important measures each and every person can take.

So as employers, who have a major role to play in this next phase, begin to develop and implement plans for reopening and staff return to the workplace, they should be mindful of their rights and responsibilities around mask-wearing.  What follows is some helpful information on current health findings regarding the efficacy of wearing masks, examples that typify the sorts of state-imposed obligations regarding masks, employer rights and tips on how to approach mask-wearing in the workplace, and a discussion of key mask-related Americans with Disabilities Act (“ADA”) accessibility issues for employers operating public accommodations.

CDC and Health Guidance

As we are all now certainly aware, the Centers for Disease Control (“CDC”) has called on all Americans to wear masks in order to help stop the spread of COVID-19.  On July 14, 2020, the CDC published an editorial piece in the Journal of the American Medical Association (“JAMA”), which discussed the latest science on the efficacy of wearing masks to curb the spread.

As discussed in a press release, studies have shown that “adherence to universal masking policies reduced [COVID-19] transmission.”  One of the studies revolved around two particular hair stylists who tested positive for COVID-19 and continued to see clients for several days while symptomatic.  The salon where they worked “had a policy requiring both stylists and their clients to wear face coverings, consistent with the local government ordinance.”  At the salon, 98% of clients wore a face covering, as did the stylists who were studied.  The study found that 90 days after each clients’ appointment, “none of the interviewed customers [84% of the relevant customers] developed [COVID-19] symptoms … [and] [a]mong [the] customers who volunteered to be tested [48% of the relevant customers], all [] tested negative for the virus that causes COVID-19.” The CDC provided that the study “adds to a growing body of evidence that cloth face coverings provide source control – that is, they help prevent the person wearing the mask from spreading COVID-19 to others.  The main protection individuals gain from masking occurs when others in their communities also wear face coverings.”

Based on the CDC’s recommendations and the latest scientific findings, it is clear that wearing masks and face coverings can be an incredibly effective tool to help prevent the spread of COVID-19.

Employer Responsibilities Regarding Masks

Various states and municipalities have implemented requirements for businesses to impose mask policies for both staff and patrons.  Note that states and municipalities often provide different industry-specific requirements for return-to-work safety measures and procedures.  Some examples of state workplace mask requirements include:

  • In California, face masks are generally required for employees engaged in work, whether at the workplace or while performing work off-site, unless certain exemptions apply. California employers must provide and ensure workers use all required protective equipment, including masks.  Employers must provide, at no cost to workers, safeguards, such as face coverings, when such safeguards are reasonably necessary to render the work and worksite safe and healthful.  Employees are required to wear masks when interacting with a member of the public, working in any space that is visited by members of the public, working in or walking through common areas, or in any room where other people are present and social distancing cannot be maintained.  Employers must take reasonable measures to remind workers that they should use face coverings.  Certain exceptions apply, in relevant part, including to those with medical conditions, the hearing impaired, and those to whom mask-wearing would pose a safety risk.
  • In New York, face coverings are required both in and out of the workplace for those who are able to medically tolerate a face covering when in public and unable to maintain social distancing. Employers must advise workers and visitors to wear face coverings in common areas including elevators, lobbies, and when moving about the office.  Further, employers must provide face coverings to employees and visitors as needed.  Masks must be worn in the workplace whenever social distancing of six feet is not possible.  Additionally, employers are required to post signage about properly storing, and when necessary, discarding personal protective equipment, including face coverings.  Employers must train employees on how to adequately don, doff, clean, and discard personal protective equipment, including face coverings.
  • Similarly, Illinois requires that employers ensure that employees wear face coverings when six feet of social distancing is not possible. Illinois employers are required to provide face coverings to all employees who cannot socially distance.  It is recommended that Illinois employers require visitors and vendors to also wear face coverings and to post signage regarding face covering requirements at office entrances.  All workplace safety policies, including the requirement to wear face coverings, “must be applied and enforced equally to all employees, except for those who have informed their employer that they have a medical reason or disability that prevents them from wearing a face covering.”

Employer Rights Regarding Masks

Employers in the hospitality, retail, and other customer-facing industries should be aware that they have certain rights when it comes to enforcing state and local mask requirements.  In the interest of ensuring the health and safety of their workers, and avoiding any government-imposed penalties, employers can take certain steps to enforce mask requirements at their businesses.  Specifically, employers should post clear signage and even pop-ups on their website to underscore the expectation that everyone that is on the premises wear a mask.  Some employers may even consider handing out masks as a branding opportunity.  Employers may also want to have a worker assigned to stay around the entrance of the premises to remind customers of the employer’s mask-wearing policy and provide masks to visitors.  It is best to bestow a trained manager with this responsibility, in the event that they encounter resistance from visitors or customers.

In the event that a customer refuses to or cannot comply with the mask requirement, employers should be prepared with alternative means to serve the customer.  This can include offering curbside pick-up service, or even handing out coupons and promotions for online shopping instead.

Employers should ensure that staff is trained to immediately call a manager, and potentially law enforcement, for help in the event that a mask-related incident escalates.  Ensure that staff is trained to understand that they will never be asked to put themselves in harm’s way to enforce a mask policy.  Managers should be trained on this important point as well.  No matter what approach employers choose to take, they should ensure that they maintain security cameras to document any potential incidents, and to help mitigate the risk of or potentially defend a litigation.

Key Mask-Related ADA Accessibility Issues

As our colleagues previously reported, businesses should keep in mind some of the many accessibility issues that have sprung up in this era of the new normal.  Businesses that require customers to cover their faces as a safety measure when entering their physical locations in order to curb the spread must be aware of the ADA implications of such mandates.

While many businesses generally can, and currently do, maintain facially neutral policies of refusing service to a customer who refuses to wear a face mask, businesses must also consider that there may be situations where a customer cannot wear a mask due to a legitimate health reason, such as a respiratory condition that does not allow them to have their breathing restricted.  Lawsuits against businesses that require patrons to wear masks are a potentially ripe new area for litigation.  In order to minimize this risk, it is imperative that businesses be aware of the specific state and local rules in the jurisdictions in which they are operating that may create or limit their obligations, options or defenses to requiring masks in public accommodations.  These requirements often differ on how businesses should respond to individuals who cannot wear masks because of a disability or medical condition.

To address businesses’ obligations under Title III and state and local counterparts, and avoid legal risk, it is more important than ever that staff working in public accommodations are trained regarding accessibility policies and proper sensitivity and etiquette so that they know how to respond when a customer says that they are unable to wear a mask, or require an accommodation.

Further, businesses should modify their baseline policies and practices accordingly in order to remain in compliance with state/local orders that may impose additional restrictions or obligations.  Additionally, businesses must remember that under Title III, businesses have an obligation to provide auxiliary aids and services necessary to achieve effective communication for individuals with disabilities.  Due to the current need for employees and patrons to wear masks, businesses may consider the need for alternative methods of effective communication for individuals who are hard of hearing and ordinarily rely on lip reading.  To address this obligation, businesses should consider providing disposable pens and pads, markers and dry-erase boards sanitized between every use, or methods of electronic communication, and disinfecting any shared devices between use.  Finally, to the extent that extra signage is added to help inform patrons of safety rules, like the requirement to wear masks, such information must be communicated in an alternative accessible format for individuals who are blind.

All of these measures, properly adopted and lead by the corporate community, will have a profound and enduring impact on when and how we come out of this period.

This is not controversial.  This is science.

Mask on.


Click here for the full video, “Rules of the Road: Return to Work in the Time of COVID-19.” 

 

Part 1 of a series featuring our video Rules of the Road: Return to Work in the Time of COVID-19. 

As Labor Day approaches, with schools reopening (in some form or fashion), and as we approach the end of our collective bandwidth for Zoom meetings, much time and attention has been spent discussing how and when to finally “return to work.”

But in thinking about that seemingly innocuous phrase – “return to work” – employers would be remiss not to take a moment to pause and re-think what that phrase actually means in a post-COVID-world.  Is work somewhere that you go?  Or is work something that you do?  Or is it some combination in the new normal?  What is the right answer for your organization?

To Rush In or Not Rush In?  That Is the Question.

The answer is – no one knows.  Not Big Tech.  Not Jerry Seinfeld.  Even when we look toward the usual suspects and industry innovators for guidance and inspiration, we are met by cognitive dissonance.  Google, for example, is allowing employees to work remotely until the summer of 2021, while concurrently expanding their physical footprint via the “Google Pier” on the Far West Side of Manhattan.  Compare that with Twitter’s approach of allowing employees to work remotely, indefinitely – or said more directly, forever.  And then we have Facebook, which has extended its work from home policy until 2021, but which just inked a deal for 700,000 square feet of commercial real estate across from Penn Station in the old Post Office Building.

With real estate costs often in the top three line items of any business, organizations should take this opportunity to revisit their real estate model as it relates to their human capital model.  Examine as a case study the pros and cons of remote working over the last several months.  What has worked well?  What has been gained, whether it be productivity, leveraging technology, work-life balance or decreased operating expenses, and which of those gains will be incorporated into the new operating model.  What has been lost – in terms of engagement, creative collisions, or culture, and how does an organization regain those virtues?

And it is easy to suffer from FOMO (Fear of Missing Out, first coined by author and entrepreneur Patrick McGinnis), particularly as reports of “back to work” abound across industries and geographies, and particularly as the labor market continues to suffer.  But we would implore all businesses to take a collective deep breath – and for a brief moment – examine for themselves what the right mix is for their organization.  Consider polling not just the C-suite, but as many clients are doing, also polling the workforce more broadly to take the collective temperature (really, particularly now, no pun intended) of the employee population as to what they want in terms of a return to work model.  Many clients, particularly in professional services, report that they are moving towards a more flexible, agile, hybrid model – permanently, akin to the model recently announced by JPMorgan.  Of course, that same model might not be right for retail or production-based organizations.  It might not be the same answer for a company with an HQ in New York, versus Texas, versus California.  You get the idea.

So before even considering “how” to get back to the office – and before getting swept up in the momentum of returning – take a moment to do a bit of organizational (and real estate) soul searching.

When (and If) Returning, Have a Plan.

If, like the majority of companies, you are planning on returning to a physical workplace at some point and in some capacity – have a plan.  Develop a plan that follows both state and local requirements, and keeps in mind regulatory recommendations, to maintain a safe workplace for all employees amid the COVID-19 pandemic.

Return to work plans are not only essential for maintaining the health and safety of all employees, but may also be required by the state or locality in which the business operates before opening back up.

For example, in New York, employers must create and conspicuously post completed safety plans on site. Employers may use the New York State template or may develop its own safety plan outlining how to prevent the spread of COVID-19 in the workplace. Further, New York employers are required to train employees on how to use, clean, and discard personal protective equipment, including face coverings.

California, by way of further example, has provided specific requirements for both safety plans and employee training, as employees venture back to the physical office, including use of face coverings, frequent handwashing and regular disinfection, and physical distancing, where possible.

With respect to training, many states require or, at a minimum, suggest that employers provide employees with information on the following:

  • policies to reduce the spread of COVID-19;
  • general hygiene;
  • self-screening at home, including temperature and symptom checks;
  • symptoms of COVID-19 and what to do if an employee or visitors becomes sick;
  • cleaning and disinfection of the workplace;
  • use and disposal of face covers; and
  • social distancing.

Even if not a requirement, it is certainly best practice to follow and regularly review the ever evolving guidance from the Center of Disease Control (“CDC”) and the Occupational Safety and Health Administration (“OSHA”), in order to properly prepare the workplace as employees return. According to OSHA, when creating a workplace safety plan, employers should consider where, how, and to what sources of COVID-19 might employees be exposed and employees’ individual risk factors, such as presence of a chronic medical condition. In addition, development of policies and procedures will ensure prompt identification and isolation of employees, should they become sick. Moreover, the CDC states that employers should consider conducting daily in-person or virtual health checks of employees prior to entrance to the building or office. Creating and implementing a plan for what employees should expect prior to entering the office, as well as what to expect once physically back in the office, will ensure that everyone has a set game plan upon arrival.

The needs of each workplace will vary and workplace safety plans and training are not one-size fits all. Thus, employers should review state and local guidance for applicable requirements and review their workplace policies and procedures to ensure that everyone understands the workplace safety plan and to ensure compliance.

What Do We Do Now?

Taken together, our best advice – practically and existentially: don’t rush in – not without a plan, at least.


Click here for the full video, “Rules of the Road: Return to Work in the Time of COVID-19.” 

On August 6, 2020, in Rose’s 1 LLC, et al. v. Erie Insurance Exchange, a District of Columbia trial court granted an insurer’s cross motion for summary judgment on the issue of whether COVID-19 closure orders constitute a “direct physical loss” under a commercial property policy. Plaintiff insureds (“Insureds”) own several restaurants in Washington D.C. that were forced to close and suffered serious revenue losses stemming from the Mayor’s orders to close non-essential businesses and ordering people to stay home. As a result, the Insureds made claims to Defendant Erie Insurance Exchange (the “Insurer”) under their policies that included coverage for “loss of ‘income’ and/or ‘rental income’” sustained “due to partial or total ‘interruption of business’ resulting directly from ‘loss’ or damage” to the property insured. The policy also stated that it “insures against direct physical ‘loss.’”

Dictionary Definitions Open to Interpretation

As the Court framed the issue, “[a]t the most basic level, the parties dispute whether the closure of the restaurants due to Mayor Bowser’s orders constituted a ‘direct physical loss’ under the policy.” To support their argument, the Insureds relied on dictionary definitions of “direct” as “[w]ithout intervening persons, conditions, or agencies; immediate;” and “physical” as pertaining to things “[o]f or pertaining to matter, or the world as perceived by the senses; material as [opposed] to mental or spiritual.” The policy defined “loss,” as “direct and accidental loss of or damage to covered property.”

The Insureds relied on these definitions to make three arguments. First, they argued that the loss of use of their restaurant properties was “direct” because the closures were the direct result of the Mayor’s orders without intervening action. The Court rejected that argument because those orders commanded individuals and businesses to take certain actions and “[s[tanding alone and absent intervening actions by individuals and businesses, the orders did not affect any direct changes to the properties.”

Second, the Insureds argued that their losses were “physical” because the COVID-19 virus is “material” and “tangible,” and because the harm they experienced was caused by the Mayor’s orders rather than diners being afraid to eat out. The Court also rejected that argument because the Insureds offered no evidence that COVID-19 was actually present on their properties at the time they were forced to close and the mayor’s orders did not impact the tangible structure of the properties.

Third, the Insureds argued that the policy’s definition of “loss” as encompassing either “loss” or “damage,” required the insurer to “treat the term ‘loss’ as distinct from ‘damage,’ which connotes physical damage to the property,” and thus “loss” incorporates “loss of use.” The Court rejected that argument and held that the words “direct” and “physical” modify the word “loss” and therefore any “loss of use” must be “caused, without the intervention of other persons or conditions, by something pertaining to matter—in other words, a direct physical intrusion [onto] the insured property.” The Court held that the Mayor’s orders did not constitute such a direct physical intrusion. Continue Reading D.C. Judge Rules COVID-19 Closure Orders Do Not Constitute “Direct Physical Loss”

On July 24, 2020, Connecticut Governor Lamont issued Executive Order JJJ (“E.O. JJJ”), which creates a presumption that employees who contracted COVID-19 in the early days of the pandemic contracted it at work and are eligible for workers’ compensation benefits.

Pursuant to E.O. JJJ, there shall be a “rebuttable presumption” that an employee, who makes a claim for benefits under the Workers’ Compensation Act, and who missed one or more days of work between March 10, 2020 and May 20, 2020, inclusive, due to a diagnosis of COVID-19 or symptoms that were diagnosed as COVID-19, contracted COVID-19 as an occupational disease arising in the course of his or her employment. The following four conditions must be met for the rebuttable presumption to apply:

  1. The employee must have worked, at the direction of the employer, outside the home during at least one of the fourteen days immediately preceding the date of injury, and had not received an offer or directive from the employer to work from home instead of from his or her place of employment;
  2. If the date of injury was more than fourteen days after March 23, 2020, the employee was employed by an employer deemed essential by the Department of Economic and Community Development pursuant to Executive Order 7H, available here;
  3. The contraction of COVID-19 was confirmed by a positive laboratory diagnostic test within three weeks of the date of injury, or diagnosed and documented within three weeks of the date of injury by a licensed physician, licensed physician’s assistant, or licensed advanced practice registered nurse, based on the employee’s symptoms; and
  4. A copy of the positive test is provided to the employer or insurer.

An employer may only rebut the presumption if it demonstrates to the Workers’ Compensation Commissioner, by a preponderance of the evidence, that the employment of the individual was not the cause of his or her contracting COVID-19.  Even if the employee who has contracted COVID-19 is not entitled to the presumption, he or she can still make a claim under the Workers’ Compensation Act.

Furthermore, E.O. JJJ provides that any wage replacement benefits paid under Section 31-307 or 31-308(a) of the Workers’ Compensation Act[1] shall be reduced by the amount of any sick leave available to the employee through the Emergency Paid Sick Leave Act of the Families First Coronavirus Response Act, or through another paid sick leave program specifically available in response to COVID-19, and separate from any accrued paid time off regularly available to the employee.

E.O. JJJ also amends Section 31-290a of the Workers’ Compensation Act[2], to provide for a civil action in superior court if an employer deliberately misinforms or otherwise deliberately dissuades an employer from filing a claim for workers’ compensation benefits.  Employers should therefore be careful not to interfere with the filing of such claims.

This E.O. remains in effect for six months, or until January 24, 2021, unless modified or terminated earlier.

*********************************************************************************************************************************

[1] Section 31-307 provides for  workers’ compensation for total incapacity, and Section 31-308(a) provides for additional benefits for partial permanent disability.

[2] Section 31-290a provides that it is illegal to discriminate against an employee for exercising his or her right to claim or receive workers’ compensation benefits and provides that an employee can bring a claim for a violation of said right to the Workers’ Compensation Commission or in the Connecticut Superior Court.

On August 8, 2020, in response to local meteorology reports of expected temperatures of above 95°F, Luxembourg’s Ministry of Health announced a “red alert warning,” and implemented a Heat Wave Plan. The Heat Wave Plan (i) advises that older individuals, infants, and those with chronic illnesses may be affected by such high temperatures and (ii) offers personal check-in and hydration services by the Luxembourg Red Cross and home care agencies. All such visits must adhere to COVID-19 safety procedures.

Additionally, the Luxembourg Labor and Mines Inspectorate (the “Inspectorate”) has issued employer obligations and recommendations to help ensure the safety of workers during the heat wave. For outdoor work, the Inspectorate directs employers to:

  • Provide or plan for shaded areas that are well ventilated, if possible;
  • Provide sufficient cool drinking water. In order to prevent dehydration, employers must provide approximately three to four liters of water per day, depending on the type of work. The Inspectorate recommends drinking small amounts of water regularly;
  • Reduce the number of work stations that require sustained and prolonged physical activity near or in contact with sheet metal, concrete surfaces, and/or paved surfaces in direct sunlight;
  • Provide additional mechanical assistance for heavy work;
  • Ensure that any personal protective equipment required for certain jobs (e.g., for work that requires handling of pesticides) is suitable for high temperatures; and
  • Ensure that temperature-appropriate clothing is worn:
    • For worksites that do not require personal protective clothing, workers should wear (i) headgear that protects the neck, (ii) loose, breathable, light-colored clothing, and (iii) if necessary, sunglasses and sunscreen;
    • Prioritize the use of air-conditioned vehicles and self-propelled vehicles; and
    • Where possible, adapt work-related personal protective equipment to the heat (e.g., safety shoes rather than heavier work boots).

For all work premises, the Inspectorate directs employers to:

  • Monitor the ambient temperature, particularly in enclosed spaces;
  • Thermally insulate buildings and other worksites (e.g., utilize blinds and shutters on windows and sun protection film on glass walls);
  • Set up heat-producing work equipment in a dedicated, ventilated area, insulate any walls or hot pipes, and/or facilitate the absorption of heat or hot steam emissions;
  • Provide employees with resources to combat the heat (e.g., electric fans);
  • Provide air-conditioned areas in the workplace; and
  • Provide cool drinking water.

Finally, the Inspectorate noted that Luxembourg labor law stipulates that some employers may, under certain conditions, engage in a weather-related layoff scheme. All businesses in the construction sector, civil engineering sector, and related sectors that carry out their normal activity on building sites may apply to the National Employment Agency (Agence pour le développement de l’emploi) for a weather-related layoff scheme in the event that their worksite becomes unfit for work or that the continuation of work is impossible or dangerous due to hot weather conditions.

Epstein Becker & Green continues to monitor workforce management issues in the US and abroad.

As featured in #WorkforceWednesday: As the uncertainty with the COVID-19 pandemic continues, many employers are considering extended or permanent work-from-home (WFH) models. Attorneys Brian G. Cesaratto and Shawndra G. Jones share some tips for employers on cybersecurity and other issues to consider when implementing extended WFH models.

Video: YouTubeVimeoMP4Instagram.

On June 16, 2020, the Court of Appeal for Ontario handed down a decision that will have a profound impact on the enforceability of termination provisions in Ontario employment agreements. In Waksdale v. Swegon North America, Inc., the Court of Appeal held that if the termination provisions governing “cause” of an employment contract violate the Employment Standards Act, 2000 (“ESA”), those provisions are not severable and the entire termination provision of the employment agreement is void and unenforceable.

Factual Background & Procedural History

Benjamin Waksdale (“Waksdale”) began his employment with Swegon North America, Inc. (“Swegon”) on January 8, 2018. He was hired as a director of sales and his total income was approximately $200,000/year. Waksdale’s employment agreement contained the following provisions:

  • A “without cause” termination provision that restricted Waksdale’s termination entitlements to one week of notice or pay in lieu, in addition to ESA minimums, which the parties agreed complied with the ESA;
  • A separate “for cause” termination provision that denied Waksdale termination entitlements when dismissed for cause, which Swegon alleged did not comply with the ESA; and
  • A severability provision that treated an unenforceable provision as severable from the rest of the employment agreement.

The “for cause” termination provision was comprehensive and provided nine grounds of a “for cause” termination, including “any matter recognized by the Courts to justify termination for cause.” Importantly, however, the “for cause” definition did not recognize the ESA’s higher standard of willfulness.

On October 18, 2020, Swegon terminated Waksdale’s employment without cause. Waksdale was paid two weeks’ pay in lieu of notice, as provided in his employment contract.

Waksdale brought a wrongful dismissal claim, claiming that the invalidity of the “for cause” termination clause rendered the entire employment agreement, or at a minimum, the “without cause” clause unenforceable, such that he was entitled to common law reasonable notice. He sought six months of pay in lieu of reasonable notice.

The Motion Judge dismissed the action, concluding that the “without cause” provision was a standalone provision that was enforceable without reference to the invalid “for cause” provision. Because Waksdale was terminated without cause, the fact that the “for cause” provision did not comply with the ESA was irrelevant and did not affect the validity of the “without cause” provision.

Ontario Court of Appeal’s Decision

The Court of Appeal for Ontario overturned the Motion Judge’s decision and found in favor of Waksdale. The Court held that the employment agreement’s termination provisions must be interpreted as a whole and not on a “piecemeal” basis. As such, when determining whether an employment contract’s termination clause is enforceable, courts must consider whether all termination clauses in the agreement, read together, violate the ESA. If any part of a termination clause is invalid, every termination clause in the contract is void and unenforceable, including an otherwise valid “without cause” clause, and even if such clause is not disputed.

To arrive at this decision, the Court of Appeal emphasized the remedial nature of the ESA, noting that the ESA intends to protect employees’ interests due to the power imbalance that exists in the employer-employee relationship. Therefore, the Court stressed that “[c]ourts should thus favor an interpretation of the ESA that encourages employers to comply with the minimum requirements of the [ESA].”

In addition, the Court of Appeal refused to give effect to the employment contract’s severability clause. The Court stated that a severability clause cannot affect clauses that have been made void by statute. Having concluded that the termination provisions must be considered together, the severability clause in this case could not be applied to sever the offending “for cause” portion of the termination provisions.

Swegon is seeking leave to appeal this decision to the Supreme Court of Canada.

Looking Ahead: Implications for Employers

The Waksdale decision likely will have far-reaching implications for Ontario employers and is another reminder that Ontario courts expect employers to draft precise termination clauses. Notably, employers must ensure that termination provisions do not violate minimum ESA requirements. This is important because most termination provisions likely reiterate the common law principle that employment may be terminated without advance notice for cause, without referencing the ESA’s higher standard. Employers also should be mindful that courts likely may continue to consider termination language as a whole, instead of as separate provisions. Finally, the effect of this decision may extend beyond Ontario. As such, all Canadian employers should assess the enforceability of termination provisions in existing employment agreements and should revise non-complying provisions accordingly.