Employer Alert – Court Sets Aside FTC’s Non-Compete Rule; Rule Will Not Take Effect

As ES Law previously reported, the Federal Trade Commission issued a rule that would have taken effect on September 4, 2024 banning general non-competes nationwide. A federal court in Texas has now invalidated that rule. The court’s ruling applies nationwide; thus, the rule will not take effect. Many of our employer clients had been working to ensure their non-compete agreements would be compliant. We encourage employers to reach out to legal counsel to understand the full ramifications of this legal ruling and how the future landscape of this area is being shaped.

Nebraska Supreme Court Ruling on COVID-19 Workers' Compensation Claim

In the recent decision, Thiele v. Select Medical Corp., the Nebraska Supreme Court overturned the denial of a woman's workers' compensation claim for a COVID-19 infection.

Christine Thiele contracted COVID-19 in April 2020 while working as a nurse liaison at a critical care recovery hospital in Omaha. Thiele filed a Petition in the Nebraska Workers' Compensation Court alleging that COVID-19 is an occupational disease caused by her work and that she is entitled to benefits as a result of her exposure.

"Occupational disease" is defined in Section 48-151(3) as "disease which is due to causes and conditions which are characteristic of and peculiar to a particular trade, occupation, process, or employment, and excludes all ordinary diseases of life to which the general public is exposed."

Initially, the Nebraska Workers Compensation Board denied her claim, ruling that COVID-19 was not to be considered an occupational disease. However, Thiel appealed, and the Nebraska Supreme Court reversed the dismissal of her case, finding that COVID-19 was still rare enough to be considered a particular risk for healthcare workers at the time of symptoms' contraction.

The Court's decision was split 4-3, with three justices endorsing one opinion considered the lead opinion; the result was that the trial judge should not have dismissed Thiel's claim and allowed the case to proceed to trial. Three justices dissented with the reasoning and result of the lead opinion. Ultimately, this decision does not resolve the ongoing debate about whether COVID-19 can be considered an occupational disease under the Nebraska Workers' Compensation Act.

The lead opinion introduced a new legal principle. It argued that when determining whether an illness is an 'ordinary disease of life,' the focus should be on the period of exposure prior to contraction or onset of symptoms, rather than the circumstances at the time of the hearing. In Thiel's case, this meant that the trial judge should have considered when she contracted the virus in 2020, a time when healthcare workers faced a heightened risk of exposure, rather than when the Petition was filed in 2022.

On the other hand, the three justices who dissented emphasized that COVID-19 has always spread in the same way; any person-to-person interaction carries the risk of contracting COVID-19 and found that COVID-19 cannot be considered anything other than an ordinary disease of life, regardless of the time period.

Thiel's case, while not providing binding authority or clarity on whether COVID-19 should be considered an occupational disease, does offer a starting point for future cases. The Court's opinion suggests that when determining if an illness, specifically COVID-19, is an ordinary disease of life, one must focus on the period of exposure. This interpretation could potentially influence future workers' compensation claims related to COVID-19.

Compliance Update for Employers and Employees – Non-Competes under the Federal Trade Commission

Yesterday, the FTC issued a significant rule regarding non-compete agreements. This is a nationally applicable rule.

In a nutshell, the FTC's rule aims to bring more transparency and fairness to non-compete agreements, ensuring they're used appropriately and not to stifle competition or restrict an employee's ability to change jobs. While this is a new rule nationally, any stricter rules under state law will still apply to those under such a state's jurisdiction.

Here are the basics to know about the new federal rule:

• Non-competes must be tailored to protect legitimate business interests.

• They should be disclosed before a job offer is accepted.

• Employees should have ample time to review and seek legal advice.

• Unreasonable restrictions could face scrutiny.

• Employers should review past non-compete agreements and may need to notify employees of the new rule's effect on them.

The rule goes into effect in 120 days. We expect legal challenges to be filed in federal courts to invalidate or limit this new rule, so stay tuned!

Nebraska employers who are abiding by Nebraska legal requirements for their non-compete and non-solicitation agreements are likely already compliant with this new federal rule. Nebraska has long required that non-competes be narrowly focused, permitting employers to prohibit from soliciting customers, clients, vendors, and employees for a limited period after their departure. Nebraska courts will not enforce generalized non-competes that amount to industry bans. Of course, some nuances could affect a particular employer or employee differently, and legal advice should always be sought.

The FTC's press release is available here: FTC Announces Rule Banning Non-competes | Federal Trade Commission.

At ES Law, we're committed to helping you stay compliant and navigate these changes smoothly. Contact us today to ensure your non-compete agreements align with the latest regulations.

Nebraska Paid Sick Leave Initiative: What Employers Need to Know

As the 2024 elections approach, several ballot initiatives are gaining momentum in Nebraska, with one particular initiative standing out - the Paid Sick Leave for Nebraskans. This initiative, if passed by the majority of Nebraska voters in November 2024, would significantly impact employers across the state. Here's what employers need to know to prepare for this potential change.

Key Provisions of the Paid Sick Leave Initiative:

1. Accrual of Paid Sick Leave: Under this initiative, all Nebraska businesses would be required to offer paid sick leave to employees. Employees would earn one hour of paid sick leave for every 30 hours worked.

2. Carryover of Unused Leave: Employees may carry over unused paid sick leave to the following year, but it should not exceed the maximum number of hours specified in the policy.

3. Protection from Retaliation: The initiative would put into law the ability for employees to earn and use paid sick days without retaliation.

4. Effective Date: If passed, paid sick leave would go into effect on October 1, 2025.

5. Exemptions: This policy would not interfere with collective bargaining agreements, contracts, or policies that provide employees with more generous paid sick time. It also does not apply to federal, state, or county employees.

Who Benefits:

Paid sick leave is aimed at benefiting working families and businesses alike. It ensures that employees do not have to choose between their paycheck and their family's health. It applies to full-time, part-time, and temporary employees. Businesses can benefit because paid sick leave may help attract a qualified workforce to the many open jobs across Nebraska, including appealing to workers from other states.   

Leave Entitlements:

Under the proposal, the amount of paid sick leave employees would earn varies depending on the size of the employer:

• For employers with fewer than 20 employees, workers may earn up to five days of paid sick leave per year.

• For employers with 20 or more employees, workers may earn up to seven days of paid sick leave per year.

Funding and Support:

The Paid Sick Leave for Nebraskans initiative has gained significant funding support, raising more than $1.7 million since its launch in July. The Sixteen Thirty Fund, a national organization supporting social change goals, has contributed over $1.6 million to the campaign. Local groups such as the Nebraska Appleseed Action Fund, the Women's Fund of Omaha, the Civic Engagement Table, the ACLU of Nebraska Foundation, and Raise the Wage Nebraska have also supported the campaign.

Implications for Employers:

Employers in Nebraska should be aware of the potential changes brought about by the Paid Sick Leave for Nebraskans initiative. If the initiative passes, businesses will need to adjust their policies and practices to comply with the new paid sick leave requirements. This may include implementing a tracking system for accrued leave, ensuring compliance with carryover limits, and updating company policies to prevent retaliation against employees for using paid sick leave.

In conclusion, the Paid Sick Leave for Nebraskans initiative has the potential to impact employers significantly. With fundraising support and growing public interest, this initiative could change the landscape of paid leave in the state. Employers should stay informed about the progress of this initiative and be prepared to adapt their policies accordingly if it becomes law in Nebraska.

Tips & Tricks to Keep your Leaders Informed of the Changes in Employment Law

Keeping your leaders informed about changes in employment law is crucial to ensure your organization remains compliant and minimizes legal risks. This month, ES Law released our first quarterly newsletter to ensure you stay updated with legal insights and updates you can find here. Here are some tips and tricks to help you effectively communicate and educate your leadership team about employment law changes:

Establish a Regular Update Schedule:

• Create a consistent schedule for providing updates on employment law changes. This could be monthly, quarterly, or as needed based on the frequency of legal changes in your jurisdiction.

Use Multiple Communication Channels:

• To disseminate information, utilize various communication channels such as email, newsletters, meetings, and intranet portals. Leaders may prefer different communication modes, so ensure information is accessible in multiple formats.

Tailor Information to Their Needs:

• Customize your updates to the specific needs and interests of your leadership team. Highlight how employment law changes may impact their departments or areas of responsibility.

Provide Clear Summaries:

• Condense complex legal jargon into clear, concise summaries that are easy for non-legal professionals to understand. Use bullet points, charts, and examples to illustrate key points.

Include Real-life Scenarios:

• Share real-life case studies or scenarios demonstrating how employment law changes can impact the organization. This can make the information more relatable and actionable.

Offer Training and Workshops:

• Organize training sessions or workshops focused on employment law updates. Invite legal experts or consultants to provide in-depth explanations and answer questions.

Create a Resource Library:

• Maintain a central repository of resources related to employment law changes. This could include legal documents, reference guides, and links to relevant government websites.

Encourage Questions and Discussion:

• Foster an environment where leaders feel comfortable asking questions and discussing concerns related to employment law changes. Create a designated point of contact for inquiries.

Provide Legal Updates in Context:

• Explain how employment law changes fit into the broader legal landscape and organizational goals. This can help leaders see the relevance and importance of staying informed.

Highlight Potential Risks and Mitigation Strategies:

• Clearly outline any potential risks or liabilities associated with non-compliance and suggest mitigation strategies.

Stay Proactive, Not Reactive:

• Don't wait until a legal issue arises to inform your leaders. Provide updates proactively so they can take preventive actions.

Seek Legal Counsel:

• Work closely with your organization's legal counsel or an employment law expert. They can provide guidance on which updates are critical and how to communicate them effectively.

Feedback Loop:

• Encourage leaders to provide feedback on the effectiveness of your communication and training efforts. Use this feedback to improve your approach continually.

Stay Updated Yourself:

• As the person responsible for communicating employment law changes, ensure you stay up-to-date with the latest developments. Attend legal seminars, subscribe to legal newsletters, and network with other HR professionals.

Legal Compliance Alerts:

• Consider subscribing to legal compliance alert services that provide timely notifications of changes in employment law. These can be invaluable for staying ahead of legal updates.

By implementing these tips and tricks, you can help ensure that your leaders are well-informed about changes in employment law and that your organization remains compliant and prepared for any legal challenges. If you find this list helpful, you can sign up for more insights delivered directly to your inbox quarterly by visiting our Employment Newsletter page.

Nebraska Minimum Wage to Increase January 1, 2023 – Must Know Info for Employers

Nebraska voters approved a ballot measure in November to increase the minimum wage in steps each January 1 from 2023 through 2026. On January 1, 2023, the minimum wage will increase from its current $9.00 per hour to $10.50 per hour. Employers must be aware of this change and must comply with it in paying their employees.

The minimum wage for Nebraska employees will increase according to the following schedule:

• January 1, 2023, will increase to $10.50 per hour

• January 1, 2024, will increase to $12.00 per hour

• January 1, 2025, will increase to $13.50 per hour

• January 1, 2026, will increase to $15.00 per hour

This increase in Nebraska’s minimum wage standards follows a trend among many states throughout the country of raising their minimums. Moving forward, Nebraska’s minimum wage will be tied to the consumer price index, or CPI, which measures the average change over time in prices paid by urban consumers for consumer goods and services, influencing inflation.

There are minimal exceptions to the minimum wage, and compliance with wage laws can get complicated. Given penalties and liability risks for non-compliance, it is vitally important that employers understand these laws and have clear policies to meet them. Bonnie Boryca and E|S’s employment attorneys are well-versed in these laws and happy to assist in compliance reviews for employers in Nebraska. Bonnie can be reached at 402-397-2200 or boryca@eslaw.com.

Severance Packages- What You Should Know Before You Agree

Attorney Bonnie Boryca breaks down what is included in a severance agreement and what you should know before you sign on the dotted line.

Topics discussed include

• What is a Severance Agreement?

• What Are the typical key parts of a Severance Agreement?

• Can I receive more money?

• Do I need a lawyer to review it?

Conduct, and Not Added Prejudice, is Sufficient to Show Waiver of an Arbitration Clause.

In May 2022, the Supreme Court of the United States (“SCOTUS”) unanimously held that an arbitration contract is to be treated “just as the court would any other [contract].” Morgan v. Sundance, Inc., 596 U.S. ___ at 6 (2022). The decision resolves a circuit split among appellate courts and vacates an Eight Circuit holding that the treatment of arbitration clauses require a bespoke procedural rule not present in the review of other contracts.

Robyn Morgan previously worked for Sundance, Inc. at a Taco Bell franchise in Osceola, Iowa. As a part of Sundance’s application for employment, Morgan submitted to an arbitration clause that would shift a dispute from the courtroom to confidential binding arbitration. Id. at 2.

Morgan sued Sundance in federal court for violating the Fair Labor Standards Act, including nonpayment of overtime wages. Id. She asserted that Sundance would take hours worked from one week and shift them to a different week to avoid paying overtime wages. Id.  In response, Sundance did not assert its right to arbitration initially, and proceeded “as if no arbitration agreement existed.” Id. Sundance pursued dismissal of Morgan’s complaint and was denied. Sundance then filed an answer to Morgan’s complaint. In its answer, Sundance asserted many affirmative defenses (fourteen, to be exact), but arbitration was absent from the list. Morgan and Sundance eventually met for mediation and were unable to come to an agreement. Id.

Approximately eight months after Morgan filed suit (and only after an unsuccessful mediation), Sundance requested to compel arbitration as agreed to in Morgan’s original application for employment. Morgan opposed, suggesting Sundance waived its right to arbitration by proceeding with the litigation in the manner and for the length of time it did. Id.

Lower courts applied Eight Circuit precedent that a party waives a contractual right to arbitration if it knew of the right, acted inconsistently with the right, and the inconsistency prejudiced the other party. Erdman Co. v. Phoenix Land & Acquisition, LLC, 650 F.3d 1115, 1117 (CA8 2011). The District Court found prejudice against Morgan before the Court of Appeals disagreed and reversed, landing Morgan in arbitration. Morgan, 596 U.S. ___ at 3.

SCOTUS granted certiorari specifically to address a circuit split and reject the requirement that waiver of an arbitration clause requires a showing of prejudice. Id. at 4. Noting that outside of arbitration, when a federal court discusses the presence or absence of waiver, there is no requirement that the waiver cause prejudice to the other party. Id. at 5. The Court discussed the history and introduction of the requirement, originally by the Second Circuit in 1968, and suggested federal policy favors arbitration. Further, if the opposing party is not prejudiced, courts should permit the reintroduction of arbitration. Id. at 6.

SCOTUS took issue with the added requirement to show prejudice and likened the requirement to an additional procedural rule, not present in other contracts. Id. Further, the Court read the Federal Arbitration Act as clearly stating no additional or custom procedural rules should be created to either favor or disfavor arbitration as a method of resolution. Id. at 7. For this reason, the requirement to show prejudice when assessing if arbitration has been waived should not be necessary.

With the rejection and vacating of the Eight Circuit’s judgment, SCOTUS sent the case back for review of Sundance’s conduct and whether the conduct is a waiver of the arbitration clause. Id.

The holding impacts simple strategic sequencing principles of pretrial procedure. Specifically, to lean on a valid and binding arbitration agreement as a type of fallback or “wait-and-see” option while exploring alternative procedural remedies now comes with increased risk. Arbitration as an option should likely be acknowledged as present, even acted upon, if a party wishes to not risk their conduct presenting as a waiver of an existing contractual right to arbitration.

Steve Lydick, E|S law clerk, assisted in preparing this article.

If you have questions about arbitration clauses in employment contracts, contact Heather Veik or any of the E|S employment attorneys at 402-397-2200.

Back to the Basics - No retaliation claim if no protected activity

Retaliation claims are among the most numerous types of employee claims processed through the Equal Employment Opportunity Commission and state EEO agencies. Central to these claims are whether an employee engaged in protected activity and how the employer responded to it. A recent Eighth Circuit case involving Nebraska law on retaliation is exemplary. 

In Walker v. First Care Mgmt. Grp., LLC, the United States Court of Appeals for the Eighth Circuit held that employees’ conduct in response to a facility resident’s abuse upon another facility resident did not constitute protected conduct to support a retaliation claim under Nebraska law.  27 F.4th 600 (8th Cir. 2022). 

Two caregivers employed by a retirement community witnessed a resident sexually assaulting other residents several times.  Per company policy, employees had to report resident abuse immediately, by reporting any incident to a supervisor, completing an incident report, and making a note in the resident’s chart.  The two employees claimed they reported observing the abuse, but on at least one occasion, they waited to make their report until day after the incident. 

The Nebraska Department of Health and Human Services (“DHHS”) responded to an anonymous complaint about the resident’s abuse and made an unannounced site visit of the facility.  Shortly after, a retirement community manager claimed she was unaware of the abuse that led DHHS to the facility.  Several employees stated the manager must have been aware of the abuse because the employees reported such abuse.  Upon completion of the visit and a staff meeting, the two caregiver employees were terminated. 

The employees filed suit alleging, among other claims, unlawful retaliation after engaging in a protected activity.  The retirement community moved in the District Court for summary judgment, which was granted, resulting in a judgment against the employees and dismissing their claims.  The employees appealed. 

On appeal, the Eighth Circuit considered whether the lower court erred in granting the retirement community’s motion for summary judgment.  Under Nebraska law, an employer may not discriminate against an employee who opposed or refused to carry out any unlawful action of the employer.  Neb. Rev. Stat. § 48-1114(1)(c).  In other words, employees claiming retaliation must demonstrate that they opposed an unlawful practice of their employer. 

The two employees alleged engaging in the following activities: the report made to DHHS, internal complaints to supervisors about the abuse, and confronting a manager about her alleged ignorance of their report of abuse.  However, none of these acts were found to have opposed unlawful activity of the retirement community. Nor did they amount to acts of refusing to carry out an unlawful action. Thus, there was no protected activity on which to base a retaliation claim.  Accordingly, the Eighth Circuit upheld the summary judgment because the employees’ conduct in response to the abuse of the facility resident did not constitute protected conduct under Nebraska law. 

Obviously, the facts of the case suggest egregious acts of abuse. However, a retaliation claim is closely focused on the activities of employees and the response of the employer. Any time an issue arises, employers are cautioned to involve their attorneys at an early stage to avoid or minimize potential claims of retaliation and to appropriately respond to abuse, to complaints, or to protected activity of employees.

Thanks to Rob Toth, current law clerk and joining E|S as an associate attorney in the fall of 2022, for assistance in preparing this article.

Bonnie Boryca and E|S employment attorneys can be reached at 402-397-2200.

Law or equity – whether a jury decides the claim in light of the equitable ‘clean up’ doctrine

In Schmid v. Simmons, the Nebraska Supreme Court held that the common law “clean up” doctrine is still good law, discussed when a party is entitled to a jury trial on civil disputes, and clarified how a litigants may waive the right to jury trial on legal claims.  311 Neb. 48 (2022).   

The Nebraska Constitution guarantees the right to trial by jury. However, on civil matters, which are generally disputes about money or other non-criminal matters, the state Constitution allows the Legislature to modify this right to allow juries less than 12 to decide matters in courts inferior to the District Courts, and, in such cases, the decision may be rendered by five-sixths majority of the jury.  Neb. Const. art. I, § 6.

 Litigants still have a right to seek a jury trial on legal claims—those involving disputes over specific real or personal property and money damages—but not on equitable claims, which may be tried “to the bench” without a jury.  Whether a claim is legal or equitable rests upon the “main object” of the claim, which is shown by the issue the lawsuit seeks to resolve.  

 Under the “clean up” doctrine, a court may determine equitable issues and then “clean up” other legal issues in the case, even where a defendant asserts a legal claim as a defense or counterclaim.  The purpose of this doctrine is to preserve judicial efficiency by allowing the same court to hear and determine all disputed issues in a single lawsuit. 

Applied to the facts, the Court found proper the district court’s decision to resolve plaintiff’s equitable claims (quiet title, declaratory judgment, LLC accounting, and judicial dissolution) and then “clean up” defendant’s amended counterclaims seeking damages for breach of contract, a legal claim.  Because the District Court retained jurisdiction to quiet title and determine rights of LLC members, and because the parties agreed the matter before the court was equitable, the District Court correctly applied the “clean up” to resolve any remaining legal claims all equitable claims were decided.  

The Court further clarified the manner in which parties may waive the right to trial by jury on a breach of contract action, or with the court’s agreement in other actions, finding that waiver could be accomplished in three ways: (1) by consent of a party where the other party fails to appear, (2) by written consent delivered to the clerk of court, or (3) by oral consent in open court on the record.  Neb. Rev. Stat. § 25-1126.

 E|S attorneys are experts in civil trials, whether to a jury or to a judge, whether in equity or common law. Bonnie Boryca and E|S litigators can be reached at 402-397-2200. 

Thanks to E|S law clerk Ross Serena for contributing to the above article.

Nebraska Updates Vaccine Mandate Legislation

On February 25, 2022, the Nebraska Legislature passed LB 906, which addresses COVID-19 vaccine mandates implemented by Nebraska employers.  It allows for certain exceptions for employees who complete a form prepared by the Nebraska Department of Health and Human Services for medical or religious objections, and also permits employers to require wearing of masks and periodic testing at employer expense.  The bill has an emergency clause which means that as soon as it is signed by the Governor, it becomes fully effective.  The details of this new legislation are set out below.

The new COVID-19 vaccine mandate legislation applies to all private Nebraska employers regardless of size, as well as the State of Nebraska, government agencies and all political subdivisions.  However, it should be emphasized that Nebraska employers in the healthcare industry are already subject to the Federal vaccine mandate applicable to healthcare employers, which will take precedence over the new Nebraska COVID-19 legislation.  It should also be emphasized that LB 906 only applies to COVID-19 vaccinations, and no other employer mandated vaccinations. 

The new law does not apply to the United States and other Federal agencies, Indian tribes, and bona fide private membership clubs exempt from taxes under the Internal Revenue Code.

It requires the Nebraska Department of Health and Human Services to develop a vaccine exemption form for individual employees to submit to claim an exemption from receiving a COVID-19 vaccine.  The form is required to contain two separate potential declarations:  (1) that a certified healthcare practitioner has provided the individual with a signed written statement that receiving a COVID-19 vaccine is medically “contraindicated for the individual”, or that “medical necessity” requires the individual to delay receiving a COVID-19 vaccination; or (2) receiving a COVID-19 vaccine would conflict with the individual’s “sincerely held religious belief, practice, or observance.”

Once this new law takes effect, any Nebraska employer that requires applicants or employees to be vaccinated against COVID-19 must allow for an exemption to the COVID-19 vaccine requirement for any individual who provides the employer with the completed vaccine exemption form, and for any individual claiming the exemption based upon the statement of a healthcare practitioner, a copy of the health practitioner’s signed written statement.

Nebraska employers may require any employee granted an exemption under this new law to be periodically tested for COVID-19 at the employer’s expense, and to wear and use masks or other personal protective equipment provided by the employer.

This differs substantially from recently proposed Federal vaccine mandate legislation as well as the current Federal vaccine mandate applicable to healthcare employers.  Specifically, other vaccine mandates and proposed legislation provide(d) that an employee seeking to avoid the vaccination mandate and be granted an exception would assume the cost of periodic testing in order to be exempt from the vaccination requirement.  Nebraska employers who desire to exercise their right to mandate COVID-19 vaccinations are now faced with bearing a considerable cost of periodic testing for employees who submit the exemption form.  Business organizations and the Chambers of Commerce were opposed to this provision, but were unsuccessful in keeping it out of the final version of LB 906. 

Given that the COVID-19 outbreak is waning, and with much of the population already vaccinated, or immune due to having had COVID, this Legislation may just be a solution in search of a problem.  However, the Legislation passed by a vote of 37-5, with 5 abstentions, so there was obviously a strong feeling among the majority of Senators in the Nebraska Legislature that a law limiting employer COVID-19 vaccine mandates was required at this time.

It will be interesting to see how this new law develops, and how many Nebraska employers determine that they will either implement or continue an existing COVID-19 vaccination requirement.  Employers in the healthcare industry are still covered by the Federal vaccine mandate applicable to healthcare organizations. 

One interesting aspect is the fact that any employee who seeks to declare a religious exemption must simply fill in the form stating that receiving a COVID-19 vaccination would conflict with their “sincerely held religious belief, practice or observance.”  There is no threshold requirement to establish such beliefs, which differs considerably from the law in the area of religious discrimination in employment, which requires that any individual seeking to assert a religious discrimination claim establish or prove that they are actually a member of a particular religion, and an active participant in the particular religion’s practices and activities.  For purposes of the new law on COVID-19 vaccinations in Nebraska, it is clear that an employee seeking an exemption must simply fill out the form and include that particular section in seeking an exemption.

As noted above, LB 906 has an emergency clause, so it will go into effect as soon as it is signed by the Governor, which will likely be early in the week of February 28th.  Therefore, any Nebraska employer that currently has a COVID-19 vaccination mandate or is considering implementing one, should take immediate steps to comply with this new Nebraska law.

Arbitration versus Litigation

The terms ‘arbitration’ and ‘litigation’ are often paired off against each other. When or if a dispute arises, we recommend knowing the general differences and similarities between these procedures.  

Litigation is a lawsuit filed in a court of law. People may be self-represented, but more often, attorneys represent their clients in moving through the phases of litigation. Phases include filing a complaint (or petition, depending on the court and type of issues involved), answer, discovery, motions, and may eventually involve a trial to a judge or jury.

 Arbitration is like litigation in that it is a process to resolve a dispute between two or more parties. It is a private means of resolving disputes. Arbitration may occur non-publicly. It usually takes place when parties have agreed in advance, through a written contract, to arbitrate future disputes on a specified subject matter, in lieu of bringing a lawsuit in court. The arbitrators are paid by the parties to assist in resolving the matter. Pros of arbitration can be that it moves more quickly, can be less expensive, and results in a final resolution earlier.  A major con for some is that there is no means of appeal or review after an arbitrator enters an award. The exception to that would require showing deceit or fraud or major errors in the fairness of the process, within very limited circumstances.

 More and more, large employers may require new employees to enter arbitration agreements in the onboarding process at start of employment. They will often cover possible future employment-related disputes. Employees should think carefully about rights they give up doing so. Employers should think carefully about how to draft these kinds of agreements and about how to present them to employees for their review and agreement. Courts and policy makers in our legislatures continue to consider how, whether, and to what extent these kinds of arbitration contracts should be enforced.

 If you are faced with arbitration in lieu of litigation, or are considering entering an agreement to arbitrate claims, or would like to craft a valid arbitration clause for your business, an attorney may be able to help. An experienced attorney can ensure your rights are fully addressed and you are fully informed about what you give up and what you gain in arbitration versus litigation.

 Bonnie Boryca and Erickson | Sederstrom, PC’s team of attorneys are well-versed in these issues. 

Supreme Court Blocks Employer Vaccine Mandate but Allows Health Care Mandate

On January 13, the United States Supreme Court, in a 6-3 decision, ruled that the OSHA ETS (Emergency Temporary Standard), requiring private employers with 100 or more employees to impose vaccine and testing mandates, is unlawful and exceeds OSHA’s authority. The Supreme Court allowed a vaccine mandate for health care facilities that accept Medicare or Medicaid payments to remain in effect.

In an unsigned opinion, the Court said “Although Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly.” “Requiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the latter category,” the court wrote. Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented. “In the face of a still-raging pandemic, this Court tells the agency charged with protecting worker safety that it may not do so in all the workplaces needed,” their dissent said.

Separately, the Court issued an opinion addressing the administration’s vaccination rules for health-care workers. A 5-4 majority upheld the health care worker vaccination rules. In another unsigned opinion, the Court said “We agree with the Government that the Secretary’s rule falls within the authorities that Congress has conferred upon him.” Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett filed a dissent.

Following the decision, the Biden administration encouraged employers to voluntarily enact COVID-19 vaccination and testing requirements.

Erickson | Sederstrom’s experienced employment and labor law attorneys are ready to help manage COVID-19 vaccination issues in the workplace. Please do not hesitate to contact one of our attorneys. Erickson|Sederstrom’s employment law attorneys can be reached at (402)397-2200.

December 20 Update Regarding Vaccine Mandates

Erickson|Sederstrom provides this update regarding the status of various vaccine mandates issued by the Biden administration.  These mandates have been the subject of court challenges with varying results.  It continues to be crucial for employers to remain up to date regarding the current status of vaccination requirements that affect their businesses, as the litigation will continue to move through the courts, leading to unpredictable outcomes until final resolution is reached, likely in the Supreme Court of the United States. 

In a key development, an injunction against enforcement of the large business mandate was lifted on December 17.

Large Business Mandate

Businesses with 100 or more workers must require employees to be vaccinated.  Unvaccinated employees must be tested weekly and wear masks while working.  The rule contains exceptions for employees who work alone or mostly outdoors.

This rule had been enjoined nationwide.  On Dec. 17, a three-judge panel of the 6th U.S. Circuit Court of Appeals allowed the mandate, lifting the injunction against enforcement.  Multiple cases from across the country had been consolidated into the 6th Circuit, which was selected at random through a court lottery system.

OSHA has announced that it will not issue employer citations before Jan. 10 for its vaccination mandate or before Feb. 9 for its testing requirement.

Health Care Worker Mandate

A wide range of health care providers that receive federal Medicare or Medicaid funding were to require workers to receive the first dose of a COVID-19 vaccine by Dec. 6 and be fully vaccinated by Jan. 4. The rule would affect more than 17 million workers in thousands of health care facilities and home health care providers.

The rule is enjoined in Nebraska and adjoining states.  A Missouri-based federal judge issued an injunction Nov. 29 barring the rule from enforcement in 10 states that had originally sued in federal court in Missouri.  There are injunctions in place in some other states based on separate lawsuits. 

The Biden administration is appealing these court rulings in separate appellate courts.  At this point, the cases have not been consolidated into any one federal appellate court. 

Federal Contractor Mandate

Contractors and subcontractors for the federal government are required to comply with federal workplace safety requirements, which require that new, renewed, or extended contracts include a clause requiring employees to be fully vaccinated Jan. 18.  There are limited exceptions for medical or religions reasons.

A federal judge in Georgia issued an injunction December 7 prohibiting enforcement of the requirement for contractors.  The ruling applies nationwide.  An appeal is expected.

Nebraska Employees Terminated for Refusing to Receive a COVID-19 Vaccination Pursuant to An Employer Instituted Vaccine Requirement Eligible for Unemployment Compensation

The Nebraska Department of Labor (NDOL) recently issued a guidance memorandum regarding unemployment benefit eligibility for employees terminated for refusing to receive a COVID-19 vaccination.  The guidance memorandum posted very quietly on the NDOL website is advisory in nature, but is binding on the NDOL, including its claims examiners and appeals tribunal, and Administrative Law Judges, unless or until amended by the NDOL.  Let’s examine the new guidance to determine its full effect on Nebraska employers.

Background.

The guidance memorandum posted in late November, 2021 is intended to provide individuals and Nebraska employers with an understanding of how the NDOL will interpret the definition of “misconduct” as applied under the Nebraska Employment Security Law to determine a separated employee’s eligibility for unemployment compensation benefits.  It has become settled law in Nebraska that, when an employee is involuntarily terminated from employment, the employee is eligible for unemployment compensation benefits unless the reason for the termination amounts to “misconduct”.  Misconduct is defined under the Nebraska Employment Security Law as conduct “not in the best interests of the employer.”  As a practical matter, employees terminated for unsatisfactory performance are not disqualified from receipt of unemployment compensation benefits, and there must be some clear violation of a critical employer interest, policy or rule to constitute misconduct.  Employees found to have engaged in misconduct that is gross, flagrant, willful or unlawful receive a more lengthy disqualification for eligibility for unemployment compensation benefits. 

New Guidance.

The NDOL’s recent guidance implements the following rule to be followed within the agency in employee separations due to the employee’s refusal to receive a COVID-19 vaccination.

“For all individuals who began work for an employer prior to an employer instituting a COVID-19 vaccine requirement:

--  an individual who is discharged from employment for refusing to receive a vaccination against Covid-19, shall be deemed to have been discharged for reasons other than misconduct and not be disqualified for unemployment benefits on account of such discharge; and

--  impact to an employer’s experience account will be determined under Neb. Rev. Stat. § 48-652.”

In short, the guidance indicates that employees who are already employed when the employer implements a new COVID-19 vaccination mandate will receive unemployment compensation benefits, and those benefits will be applied against the employer’s unemployment compensation tax account.  Since the guidance is expressly limited only to those employees who became employed prior to the employer-instituted vaccination requirement, any employee accepting employment with an employer when the COVID-19 vaccination requirement has already been instituted, and who then refused to get a vaccination, would be subject to disqualification from receipt of unemployment compensation benefits due to violation of a known policy, i.e., conduct not in the best interests of the employer.

As a practical matter, however, it is not likely that any applicant who is going to refuse a COVID-19 vaccination in order to comply with the employer’s mandate would accept such employment in the first place, and it is not likely that this will become a major issue. 

Moreover, the recently issued COVID-19 vaccination requirements at the federal level are not currently being implemented or enforced, as the OSHA mandate covering private employers with more than 100 employees, the CMS rule requiring mandatory COVID-19 vaccinations for healthcare workers, and the federal mandate for all employees of employers with federal contracts, have all now been blocked by Federal Courts with the result that all implementation and potential enforcement has been terminated at the federal level for the time being. 

The NDOL apparently felt that this guidance memorandum and advisory was necessary since some employers are implementing COVID-19 vaccination mandates on their own.  Indeed, in issuing the guidance, the NDOL expressly recognized that under Nebraska law employers may institute COVID-19 vaccination requirements, while also expressly recognizing that Nebraskans have individual responsibility and personal freedom of their healthcare decisions and that the decision to receive a COVID-19 vaccination is a personal choice involving medical, religious, and other personal factors.  Based on these statements and the recognition that requirements may be issued by employers regarding COVID-19 vaccinations which may not have existed at the time individual employment was accepted, apparently caused the NDOL to believe that a policy guidance pronouncement was in order.

Time will tell how these issues will play out in Nebraska and at the federal level, and we will keep you updated on any further developments in this area.

Erickson | Sederstrom PC’s employment attorneys are well-versed in the COVID-19 pandemic-related changes in the legal and HR landscape. They can be reached 402-397-2200.

Holiday Party Tips for Employers

The end of the year brings various obligations for employers and also opportunities to spread holiday cheer to employees, whether through end-of-year bonuses, holiday time off from work, or, as discussed here, employer-hosted holiday parties.

Examples of disputes with employers arising out of holiday parties are not hard to find. Holiday parties can give rise to claims, sometimes more than other environments because of the festive atmosphere that encourage one to “eat, [drink,] and be [too] merry.” The following tips are offered to help avoid troublesome situations that could give rise to a claim.

Be open to all viewpoints in hosting your party.

When planning and inviting employees to your holiday party, it is a good idea to call it just that, a holiday party, rather than tying the event to a particular holiday, like Christmas or Chanukah. The purpose of doing so is to ensure that employees of all religions and backgrounds are equally encouraged to participate in the out-of-office event. Even if supervisors are aware that a particular employee’s beliefs prevent him or her from celebrating, everyone should be welcomed to attend.

But don’t make attendance at holiday events mandatory.

With that said, everyone should be welcomed to attend, but no one should be required to attend. If attendance is mandatory, then the party may be considered work-time, in which an employer has to pay wages for non-exempt employees. Also, employees who do not celebrate holidays should not be required to attend and celebrate. Numerous cases have been litigated against employers in which an employee alleged she was required to participate in a holiday event that was contrary to her religious beliefs. Encourage employees to come, but do not require that they do.

Consider how to restrict excess consumption of alcohol.

Many problems that arise at out-of-office events, whether harassment or injuries, stem from over-indulgence of alcohol. A proactive employer should think about how to limit excessive drinking by employees, both to protect employees and to protect itself from potential liability.

For catered events or parties held at event centers, it can be a good idea to have a cash bar, rather than an open bar. Another way to try to limit excess consumption is to ask bartenders to be aware of who they are serving and decline to serve anyone who appears inebriated.

Also, serve appetizers, dinner, and dessert if you intend to have alcohol available throughout the evening. Employers may also want to have taxis or shuttles available for employees who need assistance getting home at the end of the evening. A party held over an extended lunch hour can also discourage excessive drinking and may be appreciated by employees who often have multiple family, church or other events to attend in the evenings during the holiday season.

Review policies with employees in advance of any party.

Your anti-harassment, dress code and other employee conduct policies apply to an out-of-office holiday event. It is a good idea to review these with employees a couple of weeks in advance of an event, by way of e-mail or memorandum summarizing the relevant policies.

Another idea to avoid inappropriate attire at parties is to hold the party right after business hours. This can encourage employees to come in their ordinary work attire, which can be a reminder that conduct at the party reflects on their professional lives.

Check your insurance coverage.

Good to do any time of year, but particularly when planning any large scale event for employees, is checking in with your insurer on the scope of your coverage. Does your policy contain exclusions for off-site events, or attendance-optional events held after hours? Does serving alcohol trigger any exclusion? Always best to be prepared.

Be vigilant and ask your team leaders to set a good example of conduct.

While you surely want everyone to spread the holiday cheer, consider asking your team leaders or supervisors to keep any eye on their teams at the party. If your business’s leaders set a good example at the party, other employees are likely to act professionally and still have fun.

Have fun!

And, of course, encourage everyone to have a good time. End of year celebrations can be a great way to encourage team building and boost morale for a great start to the New Year. 

Bonnie Boryca is an employment law attorney at Erickson | Sederstrom, PC. She can be reached at (402) 397-2200.

Court Blocks COVID-19 Vaccination Mandate for Health Care Workers

On November 29, 2021, U.S. District Judge Matthew Schelp of the Eastern District of Missouri issued an Order granting a preliminary injunction against implementation of a federal government mandate for health care workers to receive COVID-19 vaccinations.  Judge Schelp’s order was issued in a lawsuit brought against the federal government by Nebraska and nine other states (Alaska, Arkansas, Iowa, Kansas, Missouri, New Hampshire, North Dakota, South Dakota, and Wyoming).  The Order applies to health care workers in these ten states.

The vaccine mandate was issued by the federal Centers for Medicare and Medicaid (CMS) earlier in November and applies to all Medicare and Medicaid certified medical providers.  Judge Schelp concluded that CMS had issued the mandate improperly and had to get approval from Congress. 

The preliminary injunction will remain in place unless and until there is a further court order modifying or removing the injunction.  It is anticipated that the federal government will appeal Judge Schelp’s Order.

Employers should consult with counsel to obtain further information and guidance about the most current circumstances.  Erickson|Sederstrom’s employment law attorneys are available to assist.