Workforce Bulletin

On August 9, 2024, Illinois Governor J.B. Pritzker signed HB 3773 into law, amending the Illinois Human Rights Act (IHRA) to expressly regulate the use of artificial intelligence (AI) for employment decisions. HB 3773 is the second Illinois law that regulates workplace AI.  As we previously reported, in August 2019, Illinois enacted the first of its kind statute, the Artificial Intelligence Video Interview Act (AIVIA), which requires employers who use AI-enabled video interviewing technology to provide applicants advanced notice of the use of the AI, information regarding how the AI works and the characteristics evaluated, and obtain prior consent from applicants. And, while not necessarily directed exclusively at workplace AI tools, as we also previously reported, an employer’s use of AI-powered facial expression and screening technology could also implicate the requirements of the Illinois Biometric Information Privacy Act (BIPA).  

HB 3773 has a potentially broader application than either AIVIA or BIPA.  HB 3773 provides two new definitions:

Artificial Intelligence                      

A machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments.

Artificial intelligence also includes generative artificial intelligence.

Generative Artificial Intelligence   

An automated computing system that, when prompted with human prompts, descriptions, or queries, can produce outputs that simulate human-produced content, including, but not limited to, the following:

To honor the 34th anniversary of the Americans with Disabilities Act (ADA), on July 26, 2024, the U.S. Department of Justice (DOJ) signed a long-awaited final rule to improve access to medical diagnostic equipment (MDE) for people with disabilities (the “MDE Regulations”). Stressing that accessible MDE is essential for people with disabilities to have equal access to medical care and avoid poor health outcomes, the MDE Regulations, which were published by the Federal Register on August 9, 2024, amend Title II of the ADA (“Title II”) and apply to hospitals and health care clinics operated by state or local governments. The MDE Regulations create enforceable minimum standards for accessible design (as initially issued by the U.S. Access Board) covering MDE, including examination tables, weight scales, dental chairs, x-ray machines, mammography machines, and other radiological equipment commonly used for diagnostic purposes by health care professionals.

In full, the MDE Regulations and the accessibility standards they incorporate stand well in excess of 100 pages. To help our clients more readily understand what the MDE Regulations do and do not require, we are answering some of the most commonly asked questions here.

The Michigan Supreme Court has written the latest, and perhaps last, chapter of an ongoing saga affecting most Michigan employers. In Mothering Justice v. Attorney General, the Michigan Supreme Court fully restored sweeping minimum wage and paid sick leave laws, bringing finality to a legal controversy that has been churning since the laws were first proposed in 2018. Pursuant to that decision, the laws will take full effect in their original form, about six months from now, on February 21, 2025.

How We Got Here

In 2018, labor advocacy groups presented the Michigan legislature with two voter initiatives related to minimum wage (the Improved Workforce Opportunity Wage Act (IWOWA)) and paid sick leave (the Earned Sick Time Act (ESTA)) through the state’s citizen initiative process. Michigan’s constitution allows voter initiatives to propose legislation, and the legislature may take one of these three actions: (1) adopt “without change or amendment”; (2) reject and place the proposed legislation on the ballot; or (3) reject and propose an amendment, placing both on the ballot. As we previously explained, the Legislature quickly enacted amended versions of the IWOWA (2018 PA 368) and the ESTA, which was renamed the Paid Medical Leave Act (PMLA) (2018 PA 369), with significant changes. As we detailed here, the amended versions of these laws were less burdensome to employers.

The legislature’s actions led the initiatives’ advocates to file a legal action challenging the lawmakers’ authority to modify a voter initiative so quickly and dramatically through a process labeled “adopt and amend.”  That lawsuit has wended its way through Michigan’s courts, with the final outcome decided on July 31, 2024, echoing that of the initial holding issued in 2022: the Michigan legislature’s adoption-and-amendment of the two initiatives violated the State constitution’s provision on voter initiatives. Hence, those amendments are void as unconstitutional and the laws as originally conceived should take effect.

As featured in #WorkforceWednesday: This week, on our Spilling Secrets podcast series, our panelists discuss the ongoing legal challenges to the Federal Trade Commission’s (FTC’s) nationwide non-compete ban and what the future may hold for employers:

On July 23, 2024, a federal judge in Pennsylvania denied a motion to enjoin the FTC’s non-compete ban. This ruling is in direct opposition to one by a district court in Texas that enjoined the ban in early July.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer, A. Millie Warner, and Paul DeCamp look into their crystal ball and make their own predictions for how the FTC’s non-compete ban may or may not survive in the courts.

On July 11, 2024, after considering comments from insurers, trade associations, advisory firms, universities, and other stakeholders, the New York State Department of Financial Services (NYSDFS) issued its Final Circular Letter regarding the “Use of Artificial Intelligence Systems and External Consumer Data and Information Sources in Insurance Underwriting and Pricing” (“Final Letter.”) By way of background, NYSDFS published its Proposed Circular Letter (“Proposed Letter”) on the subject in January 2024. As we noted in our February blog, the Proposed Letter called on insurers and others in the state of New York, using external consumer data and information sources (“ECDIS”) and artificial intelligence systems (“AIS”), to assess and mitigate bias, inequality, and discriminatory decision making or other adverse effects in the underwriting and pricing of insurance policies. While NYSDFS recognized the value of ECDIS and AI in simplifying and expediting the insurance underwriting process, the agency—following current trends—wanted to mitigate the potential for harm. 

And if the opening section of the Final Letter is any indication, the agency did not back down. It continued to insist, for example, that senior management and boards of directors “have a responsibility for the overall outcomes of the use of ECDIS and AIS”; and that insurers should conduct “appropriate due diligence and oversight” with respect to third-party vendors. NYSDFS declined to define “unfair discrimination” or “unlawful discrimination,” noting that those definitions may be found in various state and federal laws dealing with insurance and insurers.

The New York City Council recently amended Sections 8-109 and 8-502 of the New York City Administrative Code, directly affecting employment agreements.  

Under the New York City Human Rights Law (NYCHRL), employees have one year to file a complaint or claim with the New York City Commission on Human Rights (NYCCHR) for unlawful discriminatory practices or acts of discriminatory harassment or violence. Employees have three years to file a claim of gender-based harassment. The statute of limitations for commencing a civil action under the NYCHRL is three years.

Effective May 11, 2024, the amendments to Sections 8-109 and 8-502 of the NYCHRL prohibit provisions in employment agreements that shorten these statutory periods for filing complaints or claims with the NYCCHR or commencing civil actions under the NYCHRL. Below we outline the key implications of this new law for employers.

As featured in #WorkforceWednesday®: This week, we’re examining a Texas court's recent decision that questions the constitutional authority of the National Labor Relations Board (NLRB):

Last week, a Texas district judge challenged the constitutionality of the NLRB’s structure. Judge Albright of the U.S. District Court for the Western District of Texas issued a preliminary injunction in favor of SpaceX, suggesting that the president’s inability to dismiss NLRB administrative law judges and board members could be unconstitutional. Epstein Becker Green attorneys Steve Swirsky and Erin Schaefer provide their analysis of this ruling, its implications for employers, and the potential for similar challenges to arise across other jurisdictions.

As featured in #WorkforceWednesday: This week, on our Spilling Secrets podcast series, our panelists discuss the current state of the Federal Trade Commission’s (FTC’s) nationwide non-compete ban amid ongoing legal challenges:

The FTC’s ban on non-competes will go into effect on September 4, 2024, but legal challenges remain. So, how can employers prepare?

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer, Erik W. Weibust, and Paul DeCamp tell us more about how the U.S. Supreme Court’s overruling of the Chevron doctrine might affect the FTC’s ability to regulate non-competes. They also discuss a Texas court’s preliminary injunction against the FTC’s non-compete ban* and how various legal challenges have led to a somewhat anticlimactic atmosphere in the employment landscape related to the ban.

*On Tuesday, July 23, after this episode was recorded, a federal judge in Pennsylvania reached the opposite conclusion and declined to temporarily halt the FTC’s non-compete ban.

As featured in #WorkforceWednesday®: This week, we’re delving into the U.S. Supreme Court’s recent overturning of the Chevron doctrine and how this landmark decision is opening the floodgates for challenges against federal agencies.

On July 12, 2024, in a keenly awaited decision, the U.S. District Court for the Northern District of California determined that Workday, Inc. (“Workday”), a provider of AI-infused human resources (HR) software, can be held liable under Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act of 1967 (ADEA), and the Americans with Disabilities Act (ADA) (collectively the “Anti-Discrimination Laws”) as an agent of the corporate clients that hire Workday to screen and source candidates for employment by utilizing its AI-infused decision-making tools.  In noting that “[d]rawing an artificial distinction between software decisionmakers and human decisionmakers would potentially gut anti-discrimination laws in the modern era,” the court underscored the EEOC’s admonition, which we discussed in our previous post, that employers delegating their hiring protocols to AI must do so cognizant of the potential discriminatory impacts of such use.  See Opinion at 10.  Thus, the court allowed plaintiff Derek Mobley’s disparate impact claim to proceed, finding that Mobley’s allegations supported a plausible inference that Workday’s screening algorithms automatically rejected his applications based on protected characteristics rather than his qualifications.

Prior Proceedings

Mobley filed his initial complaint as a putative class action on February 21, 2023, alleging claims against Workday as an “employment agency” for disparate impact and intentional discrimination under the Anti-Discrimination Laws.  His complaint centered on his allegation that he applied for “at least 80-100 positions that upon information and belief use Workday, Inc. as a screening tool for talent acquisition and/or hiring” and “has been denied employment each and every time.”  Complaint at 10.