US Regional Employment 2022 Comparisons

Employers in all states, including Georgia, were affected by the COVID-19 pandemic. Previously, the US experienced limited viral outbreaks (such as SARS, MERS, H1N1), but those outbreaks were limited to certain geographic clusters. In contrast, the COVID-19 pandemic affected all parts of the country. The response to the pandemic varied widely across various levels of state and local governments, and employers with facilities in multiple jurisdictions had to adapt to differing guidelines and restrictions. This was true in Georgia, as the state and local mandates varied dramatically. This meant that the issues faced by employers responding to the COVID-19 pandemic were impacted by varying state and local responses to the pandemic, with many states having radically different requirements relating to face coverings, limits on the number of individuals permitted in indoor spaces, etc.

After vaccines became available, the states, and employers in those states, faced additional issues related to vaccine hesitancy as well as the politicization of the vaccines. While the vast majority of employers relied on education and awareness campaigns to encourage their employees to get vaccinated, the spread of COVID-19 variants among unvaccinated populations led some employers to give more serious consideration to mandatory vaccination policies.

The COVID-19 pandemic raised a myriad of legal and employee relations issues for employers. As the various states began lifting their shelter-in-place restrictions, many employers faced staffing shortages, as employees chose to stay home rather than returning to work, an option that was attractive to some employees given the more generous unemployment benefits available to workers during the pandemic. This led many employers to consider more aggressive recruiting and retention efforts, including higher starting wages/salaries, more generous benefit packages and non-traditional employment “perks”.

Remote Working and Reduced Business Travel

Some employers have faced downturns, closures and reductions in force; others have struggled to keep up with consumer demand and to overcome worker shortages. Employers have:

• adapted to repeated updates to federal, state and local laws addressing pandemic-related financial assistance, leave, accommodation, safety processes and screening;
• changed the way workers interact with each other in traditional, shared workspaces and non-traditional remote locations (ie, home workspaces); and
• moved to remote means of handling employee onboarding, training, transfer of information, supervision, investigations and other processes.

Many employers projected their corporate workforces and staff would return to work in the fall of 2021, although the continued spread of COVID-19 variants and the rise and fall of case numbers impacted many return-to-office plans. This raised considerable employee relations challenges for many employers as rank-and-file hourly employees in areas such manufacturing, distribution, transportation and maintenance had been reporting to work on site throughout the pandemic in essential industries.

The workplace appears to have permanently changed. Remote work and hybrid remote work/work-in-person arrangements are becoming more common given the success many employers had in maintaining productivity and service while engaging in remote work. In addition, employees became accustomed to working from home, with no commute and a more relaxed working environment. Other employees report feeling they are missing out on mentoring, and the social aspects of working with colleagues. Many employers remain eager to have their employees return to work in person, given some see their office culture being negatively impacted by a lack of face-to-face interactions. These efforts, however, may cause additional staffing issues, as employees appear to be more aggressively seeking out employers that offer flexible work arrangements, including some type of remote work to avoid or limit long commute times, public transit, or even relocations.

The COVID-19 pandemic forced large global employers to limit or ban travel (both within their own countries, as well as internationally). Even as travel restrictions were lifted, with the success of video-conferencing on such platforms as Zoom and WebEx, it is expected that global entities will revisit their travel budgets for sales, recruiting and other functions that have traditionally been performed face to face.

Safety and Health

The impact of the COVID-19 pandemic is also likely to have long-term implications for safety and health. In response to the pandemic, most employers developed or updated existing infection control and sick leave policies, and evaluated additional protective measures for their workforces, including physical barriers, additional spacing and staggered shifts. Obviously, one size does not fit all with respect to reconfiguring workplaces, and employers must remain in compliance with federal and state laws protecting older workers, workers with disabilities, and other employment-related laws.

Employers in Georgia were generally able to decide the best course for their employee populations on their own. The Governor of Georgia issued a shelter-in-place order early in the pandemic, but a large portion of the business community was exempted from that order due to their status as an “essential business.” The restrictions of the shelter-in-place order were rolled back for most Georgia residents approximately one month after the order was issued; and the shelter-in-place order was lifted in its entirety in spring 2021. The state did not adopt any state-wide face-covering requirements for employers. However, Georgia did encourage employers to follow existing Centers for Disease Control and Prevention (CDC) guidance. Unlike other states, Georgia does not have a separate Occupational Safety and Health Administration (OSHA)/workers’ safety state agency, and therefore Georgia private sector employers followed the federal OSHA guidance.

Global entities, including those operating in Georgia, continue to take a hard look at anti-discrimination and anti-harassment policies, and commitment to social justice and diversity in light of events in Georgia and elsewhere that highlight ongoing issues in these areas. Increased polarization and politicization of issues are a challenge to employers as well.

On an increasingly illuminated stage, with pressure to be transparent, employers are re-examining how they manage their workforces and interact with their local and broader communities.

Many employers have long been on a path of reframing how they view sensitive issues, with many shifting the focus from simply preventing illegal conduct to adopting a proactive approach in promoting a more respectful and inclusive work environment. Now global businesses have taken their commitment to diversity, inclusion and equity beyond their own walls, emphasizing their commitment to societal change.

Traditional training has focused on legal requirements, civility, respect and bias (including unconscious bias) and on educating workers on multiple avenues to identify concerns to employers.

Impact of Social Justice Movements

Recent social justice movements have pushed global entities, including those operating in the US, to take a hard look at anti-discrimination and anti-harassment policies, and commitment to social justice and diversity. Employers have been re-examining how they manage their workforces and how they interact with their communities. Indeed, global employers that are not committed to these initiatives – including a commitment to make it clear that they oppose racism, sexism and other forms of discrimination – risk damaging their global image, and damaging their ability to recruit and retain employees, particularly a diverse workforce. The pervasiveness of social media brings scrutiny and rapid societal response, implicating companies and employees who can be tied to them.

Racial and social justice movements have placed a spotlight on discriminatory actions and practices, including systemic racism and implicit bias, leading employers to provide additional support and training to their existing workforces in an effort to mitigate or eliminate bias, thereby enhancing their abilities to recruit, hire and develop diverse workforces.

While US employers have adopted and implemented long-standing policies prohibiting harassment based on legally protected characteristics, the attention placed on this issue by the "Me Too" movement and the publicity generated in recent high-profile cases have initiated a seeming cultural shift from preventing conduct that is illegal to promoting a respectful and inclusive work environment. This shift can be seen in training being provided by employers (more focused on civility training and respect), as well as the focus of anti-harassment policies. The promotion of environments that encourage reporting and offer multiple avenues to bring concerns forward, coupled with an appropriate response to the behaviors at issue, are important components of such a program.

The "Gig" Economy

Before the COVID-19 pandemic, some employers had already warmed to the "gig" economy approach, sometimes relying heavily on transient, temporary, and short-stint workers, many focused on particular projects or ventures. The pandemic also forced employers to revisit a historical resistance to remote work concepts given the various shelter-in-place orders that were implemented at the beginning of the pandemic. While some employers, primarily in the technology sector, had already embraced the concept of remote work, the COVID-19 pandemic forced most employers to adopt and/or implement remote work policies, make greater use of video-conferencing, and develop alternative methods for in-person meetings, particularly with larger groups.

All of these changes had enormous socio-economic and legal implications. First, not all employees had the computer hardware and internet access necessary for remote work and employers had to put these in place. Employers also had to ensure their technology infrastructures and IT security supported the same. In addition, remote work policies, IT security policies, and wage-hour policies had to be reviewed to confirm their legality and that they adequately addressed the myriad types of work now being performed away from the employer’s usual work location.

With the steady increase in the gig economy, employers must understand the challenges and risks of contracting for services and promoting contracted services, as well as the unique issues raised by remote work. While the economy has drastically changed, applicable US law has not.

Misclassification of workers

Employers (or entities contracting for services or personnel) must consider the costs, savings and potential risks related to particular choices in this framework. Misclassifying workers as "independent contractors" who should be classified as "employees" leads to the following potential legal issues: collective bargaining, taxes, wage and hour compliance, benefits, and anti-discrimination laws.

Independent contractors typically have no such protections under federal and most state employment laws. The question of whether a worker or group of workers is properly classified can easily lead to disputes before administrative agencies and state and federal courts. See more detailed information on the independent contractor relationship in 2.1 Defining and Understanding the Relationship.

In August 2020, a court in California ruled that Uber and Lyft drivers were misclassified as independent contractors by the companies and the drivers must be classified as full employees under California law. The suit was brought by the California Attorney General under California statute AB5, which came into effect on January 1, 2020, and adopted the “ABC” test. Under the ABC test, a worker is only considered an independent contractor if all three of the following conditions apply:

• the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
• the worker performs work that is outside the usual course of the hiring entity’s business; and
• the worker is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

In early July, 2022, the US Supreme Court declined to review a lower court ruling that federal law does not preempt California’s independent contractor law.

During the Trump administration, the federal Department of Labor (DOL) had implemented a regulation that would have made it easier for employers to classify their workers as independent contractors. In May 2021, the Department of Labor attempted to withdraw that rule, stating it was inconsistent with precedent under the Fair Labor Standards Act (FLSA) and other employment statutes. However, in April of 2022, a federal district court vacated the DOL’s attempt to withdraw the Trump administration rule, so it remains in effect until the full rulemaking process is followed. In early June, 2022, the Department of Labor announced it plans to engage in rulemaking on determining employee or independent contractor status under the FLSA and that it “remain[s] committed to ensuring that employees are recognized correctly when they are, in fact, employees so that they receive the protections the FLSA provides.”

Technological Advances

Technology has allowed employers to be flexible with their workforce, allowing employees to address work issues outside of the traditional office environment. However, hourly workers not exempt from the requirements of the FLSA will likely need to be paid for work performed after hours. US employers need to have clear policies that address their compensation policies with respect to the use of these devices and after-hours work.

Union membership has been in decline in the United States for decades, with private sector union membership hovering around 6.5%. Their ranks remain strongest on the coasts. Most companies prefer to operate union-free for various reasons, such as avoiding limitations on dealing directly with their employees, general workplace flexibility and minimizing the risk of work stoppages. 

In the wake of the outbreak of the COVID-19 pandemic, there was an uptick in worker militancy across the country, some of which was related to union organizing and some of which was grass-roots action by employees related to worker safety. Unions have attempted to capitalize on worker concerns during the pandemic, promoting themselves as a vehicle to ensure that employers address worker safety issues.

However, the pandemic also created a number of obstacles to union organizing, with face-to-face meetings becoming more challenging. In addition, for a short period during the pandemic, the National Labor Relations Board (NLRB) put a temporary hold on processing union election petitions, which was lifted as of April 2020. The number of representation petitions filed was limited after the hold was lifted, but union activity has increased dramatically as logistical challenges to organizing due to the pandemic have eased. According to the NLRB, “During the first nine months of Fiscal Year 2022 (October 1 – June 30), union representation petitions filed at the NLRB have increased 58% – up to 1,892 from 1,197 during the first three quarters of FY 2021. 

Unions have had recent success in organizing employers that had long seemed either not a target of organizing or that had a long history of remaining union free. For example, it is reported that unions have now successfully organized at 200 Starbucks locations. Also, a union successfully organized a massive, 5,000-employee Amazon warehouse on Staten Island, NY.

As a benefit to organized labor, the NLRB also began conducting more mail ballot elections. Unions have frequently sought mail ballot elections over manual (in-person) elections because unions believe manual elections, which almost always take place on the employer’s premises, gives employers an unfair advantage during representation elections.

Georgia has one of the lowest private sector union membership rates in the country, although the unionization rate increased slightly from 4.6% to 4.8% in 2021. This has spurred investment and development in the automotive, manufacturing and other business sectors in the state. Georgia was a very early adopter of right-to-work laws, making it illegal to require employees to join a union as a condition of employment.

Pro-union Initiatives

With the change from a majority Trump-appointed to a majority Biden-appointed NLRB, the NLRB is undertaking several initiatives that are clearly pro-union. For example, the NLRB’s general counsel has urged regional offices to consider consequential damages as a possible make-whole remedy in certain circumstances. In June 2022, the NLRB released its regulatory agenda where it noted that it will pursue rulemaking to potentially change the “joint employer” standard. This standard has important implications because two nominally separate entities could have legal responsibility for the others’ employees under the National Labor Relations Act (NLRA) if they are found to be joint employers.

Memorandum of Understanding with the Federal Trade Commission

According to a recent press release from the NLRB, the agency has signed a Memorandum of Understanding with the Federal Trade Commission (MOU) which will allow them to closely collaborate, share information, conduct cross-training for staff at each agency, and partner on investigative efforts within each agency’s authority. The statement then goes on to describe specifically how the agencies will be targeting the gig economy: “The MOU identifies areas of mutual interest for the two agencies, including: labor market developments relating to the ‘gig economy’ such as misclassification of workers and algorithmic decision-making; the imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions; the extent and impact of labor market concentration; and the ability of workers to act collectively.”

Ban on "captive audience" meetings

Another example of pro-union actions by the NLRB involves an employer’s ability to influence workers about the unionization process. The NLRB’s general counsel recently issued a memo taking the position that employer “captive audience” meetings – where an employer requires employees to attend a meeting in which it shares information on union issues – are unlawful. Such meetings, which have been lawful for more than half a century, serve as a vital tool for employers during a union organizing campaign. According to the memo, the general counsel will seek to make even one-on-one conversations unlawful where an employee “is cornered by management while performing their job duties”.

The “Great Resignation” is a term coined in May 2021 by Anthony Klotz, a business professor at Texas A&M. Klotz predicted a mass exodus of employees from jobs and careers they no longer wanted to pursue as a result of the pandemic. Klotz’s prediction turned out to be accurate, as The Wall Street Journal estimates that the percentage of employees leaving their jobs is the highest in a generation – with an estimated 40% of the workplace considering changing employment this year.

During and Following COVID-19

During and following the pandemic, the unemployment rate in the United States soared to 14.7%, the highest rate since the Great Depression. Georgia experienced a comparable uptick in unemployment, with the unemployment rate peaking at 12.3% in April 2020 – up from 3.6% immediately before the pandemic was declared a national health emergency in March 2020. The unemployment rate nationally and in Georgia has since declined significantly and demand for employees soared as businesses re-opened. The demand is based on a combination of businesses re-opening and employees failing to return to their former positions, instead seeking new positions or opportunities. As of the date of this publication, there remain 10.7 million job openings in the United States. As of May 2022, the US Department of Labor estimated an average of 416,667 monthly job openings in Georgia – the fourth highest number of openings in the country, underscoring that demand for employees remains extremely high. In contrast, Georgia averaged 245,333 monthly job hires, highlighting the significant gap between labor supply and demand. The job openings vary by industry. For example, leisure and hospitality businesses, where workers face low wages and greater volatility in their working conditions due to the effects of COVID-19, have a job openings rate of 10.57%. Workers have been reluctant to return to certain industries, using the Great Resignation as an opportunity to improve their wages, benefits and working conditions by finding alternative employment. As a result of the Great Resignation, employees have found themselves with more power to seek improved employment conditions.

Short-Term Effects of the Great Resignation

The full effects of the Great Resignation may not be understood for years. Over the short-term, however, the demand and competition for labor has resulted in higher wages, improved benefits and more flexible working arrangements demanded by employees. Time magazine reported that employees who switched jobs averaged an 8% wage increase. This is exemplified by the fact that although the minimum wage has remained at $7.25 per hour, cooks at fast food restaurants now routinely make above $11.00 per hour, with many employers offering a minimum of $15.00 per hour as a starting wage for menial or entry-level positions that earned minimum wage pre-pandemic. 

There are different types of service arrangements in the USA. As a result, it is important that the parties agree on the terms and conditions at the outset of their relationship, and ensure that the agreement reached is consistent with applicable law. Failing to do this properly at the commencement of the engagement not only creates unnecessary uncertainty, it increases the organization’s legal exposure with regard to future disputes.

The COVID-19 pandemic made employers more comfortable and reliant upon independent contractor relationships. In addition, the pandemic forced employers to revisit the acceptability of remote work for some or all of its workforce, particularly for positions historically performed at corporate offices.

Employment

The default service relationship in the USA is that of employer and employee. Most states, including Georgia, are "at-will" employment jurisdictions, meaning either party (the employer or the employee) can terminate the relationship at any time and without having to provide a reason – provided, of course, that the termination decision is not prohibited by law (ie, due to discrimination or retaliation). Georgia Statute O.C.G.A. § 34-7-1 provides that an at-will employee generally may be terminated for any reason, and the employee may not recover from the employer in tort for wrongful discharge. In some situations, employees may have contracts specifying the terms and conditions of their employment. Such contracts are not required in the USA, but may be warranted depending on certain factors, such as the type of employee (ie, an executive).

Barring a formal written contract, terms regarding the employment relationship are typically relegated to documents such as offer letters, job descriptions, employment policies, or employment handbooks. To avoid any unintended obligation to employment for a specific term or for termination only under certain circumstances (eg, “good cause”), employers should incorporate a carefully crafted disclaimer throughout employment documents.

Joint Employment

The NLRB issued a new rule in February 2020 over the issue of joint employment. Under the rule, to be a joint employer, a business must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees. The rule defines key terms, including what are considered “essential terms and conditions of employment”, and what constitutes “direct and immediate control” regarding each of these essential employment terms. The rule also defines what constitutes “substantial” direct and immediate control, and makes clear that control exercised on a sporadic, isolated or de minimis basis is not “substantial”.

Evidence of indirect and/or contractually reserved control over essential employment terms may be a consideration for finding joint-employer status under the rule, but it cannot give rise to such status without substantial direct and immediate control. Importantly, the rule also makes clear that the routine elements of an arm’s-length contract cannot turn a contractor into a joint employer. As noted in 1.5 National Labor Relations Board, both the NLRB and the Department of Labor have indicated recently they will revisit this issue via new rulemakings.

Independent Contractors

The importance of control in a relationship also extends to the determination of whether a worker is an independent contractor. The law in this area is rapidly evolving and there are no rigid rules for determining whether a person is an independent contractor or an employee. Various jurisdictions and administrative agencies in the USA have adopted different tests to determine whether an individual is an independent contractor. Georgia passed a new law effective July 1, 2022 changing the statutory definition of “employee” for the purposes of unemployment compensation. Under Georgia Act 809, it is likely more workers will qualify as “employees” based on the more expansive definition. An individual will qualify as an “employee” unless the employer demonstrates the individual is free from control or direction over the performance of services and is customarily engaged in an independent trade, occupation, profession or business. The Act sets forth seven factors to be considered in making this determination regarding whether an individual:

• is not prohibited from working for other companies or holding other employment contemporaneously;
• is free to accept or reject work assignments without consequence;
• is not prescribed minimum hours to work or, in the case of sales, does not have a minimum number of orders to be obtained;
• has the discretion to set their own work schedule;
• receives only minimal instructions and no direct oversight or supervision regarding the services to be performed, such as the location where the services are to be performed and any requested deadlines;
• when applicable, has no territorial or geographic restrictions; and
• is not required to perform, behave or act or, alternatively, is compelled to perform, behave or act in a manner related to the performance of services for wages which is determined by the commissioner to demonstrate employment, in accordance with this Code section and such rules and regulations as the commissioner may prescribe.

Exceptions and provisions

There are exceptions under the Act for music industry professionals such as a recording artist, songwriter, lyricist, composer, composition proofer, recording producer, recording director, musical engineer, musical mixer, musician, or vocalist; a music publicist; a radio promoter; or a photographer who works on recording photo shoots, album covers, or for other press or publicity purposes. 

There are also special provisions in the Act related to “ride sharing” and similar gig-economy providers. Such providers must have a written contract with an individual that expressly provides that the company shall not:

• unilaterally prescribe specific dates, times of day, or a minimum number of hours during which an individual is required to be logged into the network company's online enabled application or platform;
• terminate such contract for not accepting, and shall not require an individual to accept, any specific transportation service request or delivery service request for services as a condition of maintaining access to the company's online enabled application or platform; provided, however, that such company may require, as part of such contract, a certain percentage of transportation service requests or delivery service requests to be accepted;
• restrict an individual from performing transportation or delivery services through other companies, except while the individual is performing services through the first company; and
• contractually restrict an individual from working in any other lawful occupation or business.

In addition, as noted in 1.3 "Gig" Economy and Other Technological Advances, the Biden administration has signaled its approval of the California ABC test, which, if implemented by the Department of Labor, would make it more challenging for employers to classify their workers as independent contractors. If adopted by the Department of Labor, it is likely that such an interpretation would be followed by the Georgia federal courts tasked with interpreting federal employment laws.

Internships

Internships have been the subject of considerable scrutiny in the past few years, notably from the standpoint of whether private businesses can rely on unpaid interns. The US Department of Labor’s Wage and Hour Division has developed a test for evaluating whether an individual constitutes a "trainee" (intern) for the purposes of the FLSA. The following factors are considered in determining whether a for-profit employer can lawfully utilize an unpaid intern:

• the extent to which the intern and the employer clearly understand that there is no expectation of compensation – any promise of compensation, express or implied, suggests that the intern is an employee – and vice versa;
• the extent to which the internship provides training similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions;
• the extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit;
• the extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar;
• the extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning;
• the extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and
• the extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

See Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act.

The COVID-19 pandemic continues to negatively impact the ability of employers to attract and retain foreign nationals. The pandemic, and the federal government’s response, disrupted virtually every aspect of the US immigration system. The processing of immigration benefits by US Citizenship and Immigration Services (USCIS) has dramatically slowed, and visa processing abroad by the US Department of State (DOS) has been impacted by lack of available appointments.

Corporate Structure and Relationships

Employers are finding it increasingly difficult to sponsor foreign nationals for employment in the US. Increased scrutiny by USCIS and DOS has resulted in lengthy delays in the adjudication process and greater rates of visa denials. The pandemic has resulted in even longer delays due to the temporary closure of local immigration offices for in-person services and the suspension of routine visa services by DOS.

Employers often consider the H-1B and L visa when sponsoring foreign nationals for employment in the US. However, due to increased scrutiny and changes in the immigration processes for the above visa classifications, employers may also wish to consider the H-1B1, E, and TN visas in addition to the H-1B and L.

H-1B visa

The H-1B visa is generally reserved for specialty occupations – positions requiring the theoretical and practical application of a body of highly specialized knowledge that requires the attainment of a bachelor’s degree or higher in a specialty, or its equivalent, as a minimum for entry into an occupation in the US. New H-1B petitions are sometimes subject to an annual lottery due to high demand and USCIS has conducted a lottery in recent years. In 2020, the lottery underwent a significant processing change that resulted in the implementation of an additional fee for employers. This classification has experienced increased scrutiny in recent years, resulting in lengthy processing delays and increased rates of denial. Of note, while several presidential proclamations have limited the ability of foreign nationals to enter the US on various visa classifications, Presidential Proclamation 10052 specifically restricted the ability of employees on the H-1B visa to enter the US to initiate or resume employment.

L visa

The L visa is generally reserved for international companies seeking to transfer executives, managers or specialized workers to the US. As with the H-1B visa, the L visa has experienced heightened scrutiny, resulting in lengthy processing delays and increased rates of denial. In addition, a change in the immigration process for renewals has added to the length of time required for a renewal and increased costs.

Due to the challenges of securing visa sponsorship for foreign national employees through H-1B or L visa classifications, employers are exploring alternatives to include the H-1B1, E, and TN visa classifications.

H-1B1 visa

The H-1B1 visa is reserved for citizens of Chile and Singapore. As with the H-1B visa, the H-1B1 is generally restricted to specialty occupations. Similar in many respects to the H-1B visa, the H-1B1 is attractive to many employers due to the relative ease and reliability of the H-1B1 sponsorship process. This visa classification is generally a more reliable and faster option than the H-1B visa,

E visa

Another option for sponsorship of foreign national employees is the E visa. The E visa category includes treaty traders (E-1), treaty investors (E-2), and Australian specialty occupation workers (E-3). To qualify as an employee of a treaty trader or treaty investor, the employee must share the same nationality as the employer, and the employee must be engaged in the duties of an executive, manager or specialized worker. The E-3 visa applies to Australian nationals performing services in a specialty occupation similar to the H-1B visa category but is more easily attainable.

TN visa

The TN (NAFTA) visa allows employers to sponsor citizens of Canada and Mexico for employment in the US in a professional capacity. While the North American Free Trade Agreement (NAFTA) has been replaced by the United States-Mexico-Canada Agreement (USMCA), USMCA retains the TN visa classification. To be eligible for this, the profession must be noted on the treaty (list) and the foreign national employee must satisfy the qualifications for eligibility for employment in that profession. 

As noted above, the unions have dramatically increased their organizing activity post-pandemic. Unions are organizing and seeking to organize companies that historically have not been targets of organizing attempts or that have traditionally been non-union, such as Starbucks, Apple and Google.

Support for Unions

With respect to organizing campaigns, it is expected that unions will continue to attempt to capitalize on worker militancy and concerns over health and safety issues. The pandemic may have caused younger workers in particular to re-evaluate the things that they value the most. Several observers have noted that much of the recent union success is with workforces consisting of younger, college-educated workers in service-sector jobs, feeling they are overworked and underpaid. Public sentiment has swung back towards unions as well. A recent survey found that about 66% of Americans now say they support unions, the highest approval rating since 1965. Unions are big businesses, with combined revenues in 2020 of $18.3 billion (85% from membership dues), according to a recent study.

To the extent the company desires to remain union-free, the importance of hiring strong HR and employee relations staff who can establish a positive culture and get buy-in from the managers cannot be overstated. The vast majority of union campaigns start because of perceived toxicity in the workplace (eg, favoritism or no outlets for employees to express their views). Being union-free vests the organization with the autonomy to make decisions about policies and other terms and conditions of employment.

Time Taken to Reach a Collective Bargaining Agreement

Reaching a collective bargaining agreement with a union after being organized can also be a lengthy process. According to a recent analysis by Bloomberg Law, on average, it takes 409 days between the time a union is certified and the time a collective bargaining agreement is finalized with the employer. During this period, employers are not permitted to make unilateral changes in employee wages, hours and working conditions. Accordingly, many employers strive to remain union-free in order to enjoy maximum flexibility.

Purchasing a Unionized Business

If an entity acquires a business in which employees are represented by a union, the entity may have options under the NLRA, depending on the nature of the transaction. If the acquisition is a stock transaction, a stock purchaser is almost always bound by the existing collective bargaining agreement with the union. If, however, the acquisition is an asset purchase, the purchasing entity generally has the right to assume or not assume the existing collective bargaining agreement. If there is continuity in the "employing industry" (with the most significant factor being the continuity of the workforce), the purchasing entity of the assets becomes a "successor" with an obligation to recognize and negotiate with the union. Depending on the specific facts, a successor may be able to establish "initial terms and conditions" of employment prior to negotiating with the union.

The pre-hire and interviewing process is a significant opportunity for employers to identify and hire the strongest candidate for the positions in question. Before the employment interview, employers should consider requiring applicants to complete an employment application that accurately describes prior educational and work history, reasons for leaving prior employment, references, and any special skills. Additional considerations should be made early on in the process as to the job description, and in particular, whether the position is remote, on-site or hybrid to assess position criteria.

Application Information

As a best practice, the employment application should include a certification by the applicant that they provided complete, accurate and truthful information on the application. The employment application should also contain an affirmation of the at-will nature of the employment relationship, and employers should refrain from making verbal or written assurances of "long-term" or "permanent" employment, or other statements that could adversely affect the employer’s ability to successfully assert that the employee was employed at-will at a later time. In addition, to the extent that any post-offer testing is to be conducted, employers should include that information in the employment application to ensure that applicants are aware of the requirements and allow them to request reasonable accommodations, if needed.

The employment application and the interview process, as a best practice, should not ask questions or elicit information about legally protected characteristics such as age, national origin/race, religious practices, pregnancy or desire to have children, sex, sexual orientation or gender identity, or medical conditions or disabilities and similarly should avoid questions that would elicit this type of information.

Background Checks and Physical Assessment

Criminal checks

A common aspect of the hiring process is a limited criminal background check for the successful candidate. While this due diligence provides benefits for employers, such as a defense to a negligent hiring claim and the avoidance of a high-risk hire, this is an area of the law that is currently evolving on the national, state and local level. The Equal Employment Opportunity Commission (EEOC) has taken the position that, given that minorities are disproportionately adversely affected with regard to convictions and arrests, criminal convictions should only be considered if they relate to the position being sought. Employers should consider doing a case-by-case analysis, and review the type of conviction, the date of the conviction, the nature of the job in question, and any exceptional circumstances before making a decision about employment based on a criminal conviction. At the same time, employers in industries such as childcare/education, mortgage and banking have stricter requirements related to background checks, prohibiting the hiring of employees with felonies. Employers in these industries need to navigate through both state law and EEOC concerns.

Employers using background checks (including credit reports and criminal records) to make employment decisions – including hiring, retention, promotion or reassignment – must comply with the federal Fair Credit Reporting Act (FCRA) administered by the Federal Trade Commission (FTC).

Physical checks

The Americans with Disabilities Act (ADA) also imposes restrictions on employers with regard to what information can be sought or discussed during the hiring process. The ADA generally prohibits employers from any pre-employment inquiries about an applicant’s medical condition. Thus, the employer may not ask any questions to elicit medical information prior to a conditional job offer being made.

After a conditional offer of employment has been made, the employer may conduct a post-offer medical examination, provided that this is required of all applicants for the position. However, to withdraw an offer of employment, the employer must be able to demonstrate that the individual is unable to perform the essential functions of the job in question, even with reasonable accommodations. Thus, to the extent that post-offer testing is to be completed, employers should ensure that the components of the test directly correlate to the essential functions of the position.

Employers may also require physical agility testing. Depending on how these tests are constructed, they may or may not be considered a "medical examination" under the ADA. For example, if an agility test simply requires an employee to pick up products and carry them a certain distance, such a test would not be a medical examination. However, if the tester measures the employee’s physiological response to the activity (eg, pulse and blood pressure), the test may be considered a medical examination subject to the ADA restrictions on such testing. Even these agility tests must be job-related and consistent with business necessity; in essence, accurately depicting the physical demands of the position in question. As this is a highly technical area of the law, employers are well advised to seek legal assistance with these determinations.

The Genetic Information Nondiscrimination Act (GINA) similarly imposes restrictions on employers during the hiring process (and afterward), making it unlawful for employers to request genetic information with respect to employees. Because genetic information is defined broadly to include family medical history, employers should ensure that any post-offer medical examinations, even those conducted by occupational doctors, do not elicit this information.

Finally, the ADA requires employers to provide reasonable accommodation to disabled applicants to permit them to participate equally in the hiring process. While reasonable accommodations may take many forms, such as having an interpreter for a hearing-impaired applicant or administering a test in an accommodated format, the employer is not required to "carve off" essential functions of the position in question.

COVID-19 Creates New Issues

The COVID-19 pandemic has not changed this basic process, but it has raised a host of new issues that might arise during the interactive process as well as cause employers to revisit what are the essential functions of a job. For example, an applicant may have an underlying condition (asthma, diabetes) for which they seek reasonable accommodations that may not have been discussed pre-pandemic. In addition, while attendance at the workplace on a day-to-day basis has historically been recognized as an essential function of the job, the success of remote work has forced many employers to revisit whether remote work may serve as a reasonable accommodation for a particular applicant/employee.

The pandemic has also led employers to begin asking basic health questions related to whether an applicant/employee has had symptoms relating to COVID-19 (eg, a fever over 100.4 degrees Fahrenheit) and as the country continues to experience the spread of variants, it seems more likely that some employers will begin implementing mandatory vaccination policies. Inquiring into an applicant's/employee’s vaccination status is permissible. However, the employer would still have a duty to reasonably accommodate non-vaccinated applicants/employees if they have a sincerely held religious belief that prevents them from getting vaccinated, or a disability covered by the ADA.

How AI Is Used in the Hiring Process

The use of artificial intelligence (AI) in the hiring process has become more common for large employers. To understand the potential legal issues posed, however, it is important to understand how AI is used. Employers have been using a type of AI for decades, albeit in a form most people now take for granted – text searching applications or resumes received. This process can now be automated with an algorithm so that a computer culls job applications by performing the text search. Certain online recruiting services such as LinkedIn Recruiter and ZipRecruiter also use algorithms to search the social media profiles of millions of potential candidates. AI can also be used in the interview process through programmed chatbots which automatically ask a candidate a series of pre-programmed questions intended to discern information pertinent to the organization. Finally, AI can also be used to compare the experiences of different candidates and can recommend which candidates to extend offers to, and the salary range to be offered to a candidate. In a nutshell, AI is particularly useful for routine tasks that involve sifting through large quantities of data.

AI's Potential Legal Pitfalls

Although AI is sometimes viewed as a preferred vehicle for eliminating potential bias, such as during job interviews, the reality is that AI has its own set of potential legal pitfalls. First, because AI is programmed by humans, the AI code developed may have the programmer’s bias (conscious or unconscious) built into it as the programmer determines what data or parameters will be used. Courts have allowed claims to proceed under federal employment laws based on unconscious bias if the bias can later be proven to have resulted in intentional discrimination against a protected classification. Similarly, Title VII of the Civil Rights Act of 1964 recognizes a legal claim for disparate impact when a selection criterion adversely impacts a protected class. Back in 2018, Reuters reported that Amazon had scrapped an experimental AI recruiting tool when it determined that the algorithm used by the recruiting tool had learnt to disfavor applicants using the term “women”. An AI-hiring practice could also implicate the ADA if an algorithm made inquiries into an applicant’s physical disability, mental health, or clinical diagnosis. These inquiries are prohibited by the ADA in connection with a pre-employment candidate assessment.

Evolving Legislation

Employers remain eager to harness AI to eliminate potential subjectivity and to automate certain aspects of the recruitment and hiring process. However, the technology is still considered in its infancy and risks are abundant, which likely explains why many states have either passed or are considering legislation to protect candidates. For example, in 2020, Illinois enacted the Artificial Intelligence Video Interview Act effective January 1, 2020. The law imposes limitations on employers that use AI for candidate video interviews. Other states are considering legislation to limit the discriminatory use of AI, or have created task forces to study the issue. This area of law is likely to continue to evolve as more employers turn to AI in the hiring process.

During 2020 and 2021, employers’ use of restrictive covenants to limit their employees’ post-employment competitive activities became a more volatile issue. Presently, there is no federal law governing an employer’s use of restrictive covenants. However, on July 9, 2021, President Biden issued an executive order on “Promoting Competition in the American Economy” which, among other things, was critical of employers’ use of non-compete agreements. The executive order directed the FTC to “consider working with the rest of the Commission to exercise the FTC’s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility”.

As of the time of writing, the FTC had not yet promulgated any regulations addressing this issue. In addition, in early 2021, a bill titled “The Workforce Mobility Act of 2021” was introduced in the Senate which, if passed, would eliminate the use of non-compete agreements in most employment relationships.

State Law

Due to the absence of governing federal law, the enforceability of restrictive covenants in the USA is heavily dependent upon state law, which varies dramatically on this subject. Some states consider non-competition and non-solicitation covenants to be void and unenforceable under almost all circumstances, whereas other states will enforce contractual restrictions, but only if they meet specific criteria set forth by state statute. Other states will enforce such restrictions, but only reluctantly and only if the terms are reasonable and narrowly defined. However, reflecting growing scepticism concerning employers’ use of restrictive covenants, a growing number of states have adopted legislation limiting their use. In the past few years, Illinois, Virginia, Maryland and Massachusetts have adopted legislation limiting employers’ use of non-compete agreements.

In Georgia, post-employment restrictive covenants are governed by state law. The law covers non-competition covenants, customer non-solicitation covenants, and covenants regarding non-disclosure of confidential information. The statute contains detailed requirements about the scope of such agreements, the time period for which they may be effective, the geographic limitation of the restrictive area, and other safe harbor provisions. Georgia employers should discuss the provisions of the statute with legal counsel.

Trade secrets

In the absence of a written covenant, information that comes within the scope of a "trade secret" is protected from "misappropriation", which is defined as the acquisition of a trade secret by a person who knows or has reason to know that the trade secret was acquired by "improper means" (theft, bribery, misrepresentation, breach, or inducement of a breach of a duty to maintain secrecy or espionage) or the disclosure or use of a trade secret without authorization by someone who used improper means to obtain the information or who knew, or had reason to know, that the information was protected by law. Georgia adopted the Trade Secrets Act of 1990. The Georgia version of the law is found at O.C.G.A. § 10-1-761.

Medical Information

COVID-19 has altered the application of some traditional privacy rules. Generally, conducting medical tests or examinations on employees is prohibited. However, in the wake of COVID-19, the CDC and state and local authorities permit reasonable measures – including temperature checks, asking questions regarding potential COVID-19 exposure, and even testing to check if an employee has an active case of COVID-19 – to help curb the community spread of the virus. Indeed, under the ADA, mandatory testing to check for an active case of COVID-19 (but not to check for COVID-19 antibodies) is permissible if “job related and consistent with business necessity”. Early on in the pandemic, the EEOC issued guidance that COVID-19 testing always met this ADA requirement. However, on July 12, 2022, the EEOC issued new guidance providing that COVID-19 testing is no longer automatically compliant with this ADA standard. Instead, employers must  assess whether testing is job-related and consistent with business necessity based on current pandemic and their particular workplace circumstances. The guidance includes a number of factors to be considered, including: (1) current levels of community spread; (2) the vaccination status of the employee population; and (3) the ease of transmission of current variants and the possibility of severe illness from current variants. The current guidance is available on the EEOC’s website: What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws | U.S. Equal Employment Opportunity Commission at eeoc.gov.

Furthermore, while all medical information (including information related to COVID-19) must normally be kept confidential, an employer may discreetly disclose the name of an employee who is COVID-19 positive to a public health agency. Not surprisingly, this has created some tension in the workplace, as employees’ fears have led them to ask whether co-workers they work with have tested positive for COVID-19 or otherwise exhibited symptoms of COVID-19. Despite these understandable concerns, the employer remains obligated to protect the privacy of an employee’s medical information even during contact tracing or notifying employees of possible exposure to COVID-19.

Electronic Equipment

Employers that provide electronic equipment for employees to use in connection with their job duties (ie, laptops and internet access) are generally permitted to adopt policies notifying employees of the right to monitor the use of such equipment and remind employees of their ownership interest in these devices. Employers can also impose reasonable requirements on how the employees can use the equipment. For the most part, these policies have been upheld on the grounds that employees have no reasonable expectation of privacy while using company equipment. On December 17, 2019, the NLRB ruled that an employer’s rule prohibiting use of its email system for non-business purposes did not violate employees’ rights under the NLRA. The decision in Caesars Entertainment Corp d/b/a Rio All-Suites Hotel and Casino, NLRB Case No 28-CA-060841, overturns the Board’s 2014 decision in Purple Communications, which held that work rules prohibiting employees from using employer-provided email systems for union activity were presumptively invalid.

Surveillance Programs

Monitoring employee activities in the workplace is generally permitted under federal and state law; however, an employer must disclose to employees in writing that they have the right to do so and may do so at their discretion. Moreover, employers should exercise caution in doing so and should make sure that their actions are reasonable. Discreet surveillance programs have long found favor with the courts. The key question is whether the surveillance constitutes an invasion of the employee’s right to privacy. For the most part, the tort of invasion of privacy requires a plaintiff-employee to show an intentional invasion that is highly offensive to a reasonable person and that occurs where there is a reasonable expectation of privacy. Employees typically have no reasonable expectation of privacy on a factory floor. However, the same is not true for a bathroom or locker room. Thus, an employer can conduct video surveillance of work areas, lunchrooms, offices, parking lots and any other areas of its business, with the exception of those areas where employees have a reasonable expectation of privacy from visual observation (such as restrooms and showers).

Laws of the Jurisdiction

Unlike other states, Georgia does not have state-specific laws prohibiting discrimination based on legally protected characteristics. However, most Georgia employers are subject to a number of federal laws that prohibit discrimination, harassment or retaliation based on legally protected characteristics or legally protected activity. Legally protected characteristics include age, gender (potentially including sexual orientation and/or gender identity), pregnancy, race, color, national origin, disability, military or veteran status, genetic information, religion, and citizenship status. In addition to federal laws, many states – as well as local government entities such as cities, counties and townships – have enacted laws that expand the coverage of legally protected characteristics. Thus, it is important to understand and abide by all the laws in the jurisdiction in which the employer is located.

Training

Employers would be well advised to conduct periodic supervisor training that identifies the types of behaviors that are inappropriate in the workplace, the methods to report concerns, their role as a member of the management team (both in communicating with applicants and employees, and in the investigatory process), and how to appropriately document and issue any discipline needed. Employees should also receive training on the applicable policies, the types of behaviors that violate the policies, the mechanism to report concerns, and the non-retaliation provisions of the policies. Many employers are also including diversity training to foster an inclusive and respectful workplace, and to discuss varying perspectives employees may bring to the workplace as a result of their life experiences.

OSHA is the federal agency charged with enforcing all applicable federal safety laws and regulations. Roughly 22 states have applied for, and been granted, authorization to establish state plans to administer and enforce the applicable safety and health compliance program for private employers in their states. Georgia has not been granted authorization for a federal-approved occupational safety and health program, and therefore the safety and health complaints of employees are processed through OSHA. The COVID-19 pandemic has resulted in a large number of employee complaints that their employer is not providing a safe work environment, which has challenged the agency given its current resources. Most of these complaints are processed through the “general duty” clause under OSHA that requires employers to furnish a place of employment free from recognized hazards that are causing, or are likely to cause, death or serious physical harm to employees.

In Georgia, an employer that establishes a “drug-free workplace program” in compliance with state law is eligible for a discount on its workers’ compensation insurance premiums. The program must include all the required provisions in Georgia law.

The provision of employee benefits and the documentation of employee benefit plans is largely a matter of federal law under the Employee Retirement Income Security Act of 1974 (ERISA). Generally, state law is pre-empted as it relates to employee benefit plans.

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is an element of ERISA which requires that administrators of group health plans provide the option of purchasing continued healthcare coverage for employees and their qualified beneficiaries who would otherwise lose coverage as a result of a "qualifying event" such as termination of employment.

Federal courts have jurisdiction to interpret how ERISA applies to employee benefit plans and these interpretations can vary from region to region. The federal courts that have authority to interpret ERISA, as it applies to employers located in Georgia, have generally been more employer-friendly in their interpretations.

The COVID-19 pandemic brought changes to the federal statutory framework governing benefits and benefit plans, enhanced unemployment compensation benefits, and employee leave (paid and unpaid). Georgia, however, did not adopt any legislation, specifically in response to the COVID-19 pandemic, affecting compensation or benefits.

COVID-19

The COVID-19 pandemic has presented a number of additional challenges with respect to terminations. As an initial matter, a number of businesses, particularly in the hospitality or restaurant industry, were forced to immediately shutter operations on a temporary or permanent basis, resulting in layoffs or terminations. This created potential exposure for employers under the federal Worker Adjustment Retraining and Notification Act of 1988 (WARN) governing plant closings. However, unlike some states, Georgia does not have a state-specific “mini-WARN” statute governing plant closings.

In addition, the Families First Coronavirus Relief Act (FFCRA) created new leave mechanisms for qualifying employees, including paid leave for limited amounts of time, and, correspondingly, potential new causes of action for interfering with leave or retaliating against employees for taking it. Additionally, employers who took advantage of Paycheck Protection Program loans and that terminated employees or reduced their work schedules will be obligated to rehire or reinstate employees to the extent they intend to have the loans forgiven pursuant to the terms of the legislation.

Finally, terminating an employee because they have the virus or are suspected of having the virus also raises the spectre of disability discrimination or retaliation claims under federal anti-discrimination statutes. In addition, for employers not covered by the FFCRA, their employees may have requested family and medical leave in connection with having the virus or having a family member for whom they care affected by the virus. Terminating an employee because of an FMLA leave request may result in claims of retaliation under the FMLA, or interference with an employee’s FMLA rights. Therefore, it is imperative that employers properly process and vet these leave requests under the FMLA. Georgia, however, does not have its own state-specific leave act providing for paid or unpaid sick leave.

At-Will Terminations

If an employee is at-will, this should be disclosed to them upfront so there are no surprises if they are terminated at a later point. The employer should – at least – be able to point to evidence documenting that employees were advised of their at-will status at the commencement of employment. Best practice is to ensure that at-will statements are included in the employment application, offer letters, and employee handbooks and acknowledgment forms.

Terminations by Operation of Contract and Severance

If the parties have entered into an employment agreement that addresses how the employment relationship will end, the terms of the agreement will normally govern the situation. Employers would be well advised to pay close attention to the language of the employment agreement, especially where there are defined terms addressing termination for "cause", "change of control" and provisions describing the renewal of the contract. Employees in the USA are typically not entitled to severance unless the employer agrees to provide it pursuant to the terms of an agreement or policy.

Separation Agreements and Releases

In the event employees are offered severance, this will customarily be contingent upon them entering into a release waiving any and all claims they may have against the company. Such release agreements are treated as contracts, and generally will be subject to enforcement in a similar manner. One caveat, however, concerns waivers for employees age 40 or over, pursuant to federal law. The federal Age Discrimination in Employment Act (ADEA) has many procedural requirements in order for a severance agreement to be lawful. Employers should consult employment counsel to ensure compliance.

Beyond federal law, some states require additional provisions to ensure that a release is valid. As such, the current state of the law in the applicable jurisdiction must be reviewed before any release is prepared and presented to an employee.

WARN Obligations

Terminating multiple employees may trigger requirements under another federal law, WARN, if a sufficient number of employees are affected. This law applies to any business that employs 100 or more employees (excluding part-time employees). Under the law, if an employment loss results in a "plant closing" or "mass layoff", a qualifying employer must provide affected employees and certain government officials at least 60 days' advance notice of the event. Employers that fail to provide the requisite notice can be required to pay the affected employees’ back pay for each day of the violation, reimburse them for the loss of benefits and any medical expenses they incurred, and may also have to pay civil penalties.

ADR

The law in the USA generally favors the private adjudication of disputes, including arbitration.

Arbitration can apply to employment disputes and can cover the full range of potential claims that employees can raise against employers, including tort claims and claims based on the violation of federal employment statutes.

Under Georgia law, to constitute a valid contract, there must be, among other things, “the assent of the parties to the terms of the contract” (O.C.G.A. § 13-3-1). A party cannot be required to submit to arbitration any dispute that they have not agreed to submit. The party seeking to enforce an arbitration agreement must prove assent to the contractual terms. Some Georgia courts have interpreted O.C.G.A § 9-9-2(c)(9) as requiring that the clause to arbitrate be initialled by all signatories.

Generally, in Georgia, employees are employed on an at-will basis so that no "breach of contract" claims can be brought against the company upon an employee’s separation. A best practice in Georgia is to have "at-will disclaimers" included in offer letters as well as any employee handbooks/manuals that specify an employee remains at-will unless the company enters into a written agreement stating the contrary.

Certain executives or other employees may have a written agreement that provides for termination “for cause” and “without cause” with the employee’s separation pay impacted by whether the employee was terminated “with cause” or “without cause”. For businesses that temporarily or permanently closed their operations due to the COVID-19 pandemic, and terminated employees as a result, those contracts would need to be reviewed to assess whether that unique business circumstance was covered by the employee’s agreement.

In union environments, the labor agreement between the parties controls employees’ terms and conditions of employment, including termination decisions. Violations of labor contracts are most often adjudicated in arbitration, including disputes over employee discharges.

Damages

Damages for contractual claims are most often tied to the alleged harm suffered. For instance, if an employee had a five-year employment agreement and argued it was terminated improperly three years prematurely, the employee, if successful, would be entitled to three years of pay. It is important to note that some contracts may provide for one or both parties to receive attorney’s fees or other, additional categories of damages in the event they prevail in a dispute under the agreement, which can be significant sums.

Handbook Policies

In some circumstances, it is held that handbooks may create enforceable rights, but many employers include clear disclaimers that the handbook is not a contract, that the employees are employed at-will absent some clear agreement signed by an officer of the company, and that the policies may be changed at any time, for any reason, without prior notice.

While handbooks generally are not construed as contracts, employers should consistently follow the terms of the handbook policies (absent exceptional circumstances) to avoid claims of disparate treatment based on a legally protected characteristic.

Labor Agreements

In a union environment, a labor agreement between the union and employer governs employees’ terms and conditions of employment, including employee terminations. Nearly every such agreement provides (either explicitly or implicitly) that a union employee can only be terminated with "just cause". Just cause is a murky standard that is viewed differently by arbitrators, and union employee discharge cases are most frequently pursued in arbitration. Generally, the employer must show that the reason for the termination was justified, that the employee should have known the misconduct at issue could lead to discharge, and that the company consistently has imposed such penalty for similar violations in the past. In terms of potential damages in labor arbitrations related to employee terminations, generally only back pay and reinstatement are available as potential remedies.

Claims Under Federal Anti-discrimination Statutes

As a result of the COVID-19 pandemic, there has been an increase in claims arising under these federal anti-discrimination statutes. These claims include failure to accommodate disabilities under the ADA and interference or retaliation against employees requesting leave under the FMLA, as well as other discrimination claims if the employer took adverse action based on an employee’s protected characteristic, such as assuming that older workers should remain furloughed during the pandemic.

The FLSA requires that all covered non-exempt employees be paid at least minimum wage and overtime pay at no less than time and one half their regular rate of pay for all hours worked in excess of 40 in a single workweek.

The laundry list of potential wage and hour-related legal issues can seem daunting and includes:

• classification of employees as exempt and non-exempt;
• classification of independent contractors and consultants;
• compensable v non-compensable work time;
• payroll docking policies and practices;
• "off-the-clock" and regular work time;
• meal periods, breaks and on-call time;
• overtime, commissions, bonuses, reimbursements and tip pooling;
• record-keeping and notice obligations;
• payments upon termination of employment;
• compensable time to be included in an employee’s hours; and
• calculation of overtime and deductions from pay.

In addition to the FLSA, states can impose requirements on employers concerning pay.

Collective and Class Actions

Claims under the FLSA are often brought in a class action under Federal Rule of Civil Procedure 23, or a collective action under Section 216(b) of the FLSA. Either framework allows a large number of employees citing similar alleged wage or compensation errors to join together against an employer to make claims for monetary and equitable relief. Potential damages include back pay, front pay, punitive or liquidated damages, and attorney's fees. Additional wage claims and penalties are available on a state-by-state basis.

One way to try to combat the risks and costs of collective and class actions is to require employees to sign class action waivers, requiring employees with disputes to individually adjudicate the dispute in arbitration. Such waivers must be carefully crafted to help ensure enforceability.

Exempt and Non-exempt Employees

As a result of the pandemic, several types of claims are likely to arise. First, as a result of remote work, more employees avoided long commutes and their work was readily accessible at home. For non-exempt employees, employers were facing potential overtime claims as these employees worked in excess of 40 hours. These types of claims are typically avoided by ensuring the employer was carefully tracking hours worked, and requiring accurate reporting of the same by employees. Employers need to confirm they have appropriate policies in place governing the accurate recording of hours worked, as well as management approval of overtime. For exempt employees, there is the possibility that such employees begin performing non-exempt work that, depending on the amount of such work performed, could leave the employer vulnerable to employees challenging their exempt status.

There are a variety of federal and state laws that protect employees who report perceived unlawful acts. Even if it is ultimately determined that the employee’s perception is wrong, the employee generally will still be protected unless the employer can establish that the employee knew they were making a false report. Legal protection is offered to employees for reporting on many types of conduct, including:

• on-the-job safety issues;
• violation of federal or state anti-discrimination laws;
• violation of the Affordable Care Act;
• wage payment violations;
• environmental violations;
• fraud against the government;
• financial misconduct, including false reporting of financial information or tax evasion; and
• misappropriation or misuse of investor funds in a public company.

To successfully defend against such a whistle-blower claim, the employer must typically provide substantial evidence of its non-retaliatory reason for the discipline or discharge. Many statutes give the government entity authorized with evaluating these claims the power to reinstate a terminated employee before making a final decision on whether the termination was lawful.

Pursuit of a Claim

The means by which a worker can present a claim against an employer in the USA are very broad. These can range from internal complaints, to filing claims with government agencies, to participating in arbitration, to a full-blown lawsuit filed in court.

Within the company

During employment, the most common way for an employee to present a claim against the employer is by way of a complaint to their supervisor or manager, or to the HR department (although it should be noted that nothing expressly prohibits an employee from pursuing a claim with a government agency or even filing a lawsuit while employed). This is why it is essential that supervisors/managers are properly trained in how to recognize and respond to such complaints. This is also why it is imperative that employers educate employees on the policies or procedures that apply to such complaints – so employees know how to make the complaints and employers can deal with them promptly. Employers receiving complaints should have HR procedures in place to address them, including interviewing the people in question and taking steps to correct any problems.

The investigation process and the outcome of the investigation should be well documented. There are no rigid rules on what steps an employer should take to investigate a complaint or who should be involved in the investigation. However, the courts have inferred discriminatory motive from the failure to conduct a reasonable investigation. As a result, employers have a vested interest in carefully conducting investigations and dutifully maintaining records of each step in the process. Taking proactive steps to address concerns raised by employees can help fix actual problems in the workplace, can correct perceived bias, and – if nothing else – can be used as evidence that the company took the matter seriously in the event the case does proceed to litigation.

Through arbitration

If the parties have entered into a valid arbitration agreement, the agreement will typically be upheld and the parties will proceed in the forum selected. Notably, some courts have allowed class action waiver provisions in arbitration agreements. These arbitration agreements with class action waiver provisions can sometimes serve as a shield to certain workplace class action claims.

Through mediation

Another ADR procedure that is popular in the USA is mediation. In contrast to arbitration (where the dispute is submitted to one or more individuals to render a decision), a mediator acts as a go-between for the separate parties and tries to structure a resolution. The mediator does not issue a final, binding decision (although the mediator certainly may provide input on how they perceive the relative strengths and weaknesses of the parties’ positions). The benefit of mediation is that it is fast and does not involve protracted litigation or discovery. Additionally, the parties can conduct multiple mediations (with the same or different mediators) if they so choose.

Through an agency

There are both federal and state administrative agencies that present an avenue for employees to pursue claims against an employer. Almost every state has a civil rights agency that can address claims of discrimination, harassment, or retaliation. In addition, multiple cities have also enacted non-discrimination ordinances and have a local agency that can investigate complaints. Employees can also submit workers' compensation claims in the state in which they worked (or where the incident occurred) or file a claim for unemployment in that state if they are terminated. Separate and apart from the state agencies, the federal EEOC has jurisdiction over federal laws regarding discrimination, harassment and retaliation, and employees in any state can file a charge with that agency. Other federal agencies also have jurisdiction to decide employment disputes involving issues within their regulatory authority.

Court Structure and Procedure

There are two parallel court systems in the USA: state and federal. Each state operates its own trial courts (circuit or superior courts). Decisions made by the trial courts are subject to appeal to intermediate appellate courts and, ultimately, each state’s Supreme Court. The federal system operates in a similar manner, with trial courts (federal district courts), then intermediate appellate courts (circuit courts), and finally the United States Supreme Court. Generally, state courts have jurisdiction over claims involving state laws, state residents and actions that take place in the state, whereas federal courts have jurisdiction over federal statutes (which include many employment laws) and disputes over a certain threshold dollar amount involving citizens of different states (diversity jurisdiction).

Actions filed in court are subject to liberal discovery, which permits each side to obtain documents and question witnesses well in advance of the filing of a dispositive motion or trial. After the initial discovery period (which typically takes several months), the parties can file motions requesting that the presiding judge dismiss the case. If the case proceeds to trial, most will be tried before a jury, although in some limited circumstances – or by agreement – the parties can have a trial decided by a judge (a bench trial). Thereafter, the decision of the judge or jury can be submitted to an appellate court for review.

Damages and Remedies

A wide variety of remedies can be recovered by parties in litigation, particularly in employment cases. Most statutes specify the nature of relief that may be recovered for violation of their provisions. Injunctive relief, which involves asking a court to order the other party to do something (or refrain from doing something), is often requested, but less often ordered. Plaintiffs in most employment actions typically seek to recover the actual damages they have suffered as a result of the defendant’s conduct – referred to as back pay. Prospective damages, or front pay, may also be claimed in order to compensate for damages going forward in time that an employee expects to experience. Damages for emotional distress, punitive or exemplary damages to punish the defendant for extreme or outrageous conduct, and attorney’s fees are also typically sought. The damages vary, based on the law under which the claim is brought, and some may not be available in all instances.

In addition to wage and hour claims, certain forms of discrimination claims are often brought in a class action under Federal Rule of Civil Procedure 23. A class action allows a large number of employees citing similar alleged discriminatory practices to join together against an employer to make claims for monetary and equitable relief.

Potential damages vary depending on the statute under which the claim is brought, but may include such items as back pay, front pay, punitive or liquidated damages, and attorney's fees. The court can also order the employer to reinstate/rehire employees found to have been improperly discharged.