Released May 28, 2024

NEW LAWS ENACTED

  • Washington expands the classes covered by Equal Pay and Opportunities Act (EPOA) effective July 1, 2025. Under the amended EPOA, employers will be prohibited from engaging in wage discrimination based on age, sex, gender, marital status, race, national origin, sexual orientation, gender expression, gender identity, citizenship or immigration status, honorably discharged veteran or military status, and the presence of any sensory, mental, or physical disability, among others. Previously the law only covered sex and gender based pay discrimination.
  • New Mexico passes two bills expanding protections under its Human Rights Act. The first adds “military status” as a protected class. The second revises the definitions of sex, sexual orientation, and gender identity, and adds a new protected category of gender.
  • Utah amends its state Antidiscrimination Act to prohibit an employer from compelling an employee to communicate or otherwise act in a manner that the employee believes would burden or offend the employee’s sincerely held religious beliefs.

PENDING BILLS

  • A bill has been introduced in California which would grant employees the right to disconnect from employer communications during nonworking hours. The proposed legislation aims to give employees the freedom to ignore most employer contacts outside of their designated work hours, with limited exceptions for emergencies or urgent scheduling changes.

COURT & AGENCY NEWS

  • The S. Federal Trade Commission adopts final rule banning non-compete agreements between workers and employers, with only limited exceptions. The rule, set to go into effect 120 days from April 23, 2024, is already facing legal challenges that may delay the enforcement of the Final Rule.
  • The U.S. Supreme Court has issued a unanimous decision on April 17, 2024, in Muldrow v. City of St. Louis, Missouri. The Court held that employees alleging illegal discrimination under Title VII only need to show that the discriminatory action caused “some harm” with respect to an identifiable term or condition of employment. Prior to this ruling, employees were required to show “significant” harm to establish a Title VII claim.
  • The S. Equal Employment Opportunity Commission (EEOC) issued its Final Rule interpreting and implementing the Pregnant Workers Fairness Act (PWFA). The final rule clarifies several key aspects of the PWFA, including the definition of “reasonable accommodation,” “undue hardship,” and “known limitation,” and provides numerous examples of potential accommodations.

For the full stories, keep reading below.

NEW LAWS ENACTED

Beginning July 1, 2025, Washington’s Equal Pay and Opportunities Act will Expand to Cover All Protected Classes

Washington’s Equal Pay and Opportunities Act (EPOA) has been expanded to include all protected classes under the Washington Law Against Discrimination. Governor Jay Inslee signed Substitute House Bill 1905 into law on March 28, 2024, broadening the scope of the EPOA, which previously prohibited sex- and gender-based pay discrimination. Under the amended EPOA, employers will be prohibited from engaging in wage discrimination based on a broader range of protected classes effective July 1, 2025.

The list of protected classes under the revised EPOA includes age, sex, gender, marital status, race, national origin, sexual orientation, gender expression, gender identity, citizenship or immigration status, honorably discharged veteran or military status, and the presence of any sensory, mental, or physical disability, among others. The expanded law now aligns with the broader discrimination protections found in Washington’s anti- discrimination laws.

Additionally, the EPOA amendments grant employees a private right of action, allowing them to bring a civil lawsuit if they believe their rights under the EPOA have been violated. The Washington Department of Labor & Industries (L&I) is tasked with creating educational materials to inform employers and employees about the new changes. The amendments will become effective on July 1, 2025.

Despite these changes, certain elements of the EPOA remain intact. Employers can still establish pay differentials based on factors such as education, training, experience, seniority, merit, productivity, and regional differences in compensation. The EPOA also continues to compare pay and advancement decisions only among “similarly employed” employees, those who perform work requiring similar skill, effort, and responsibility under comparable working conditions.

Many employers will review their compensation and advancement policies to ensure compliance with the expanded provisions of the EPOA ahead of the 2025 effective date. In addition, as a best practice, many will train their supervisors on how they can prevent all types of discrimination—including pay discrimination—as a part of their managerial duties.

New Mexico Amends Human Rights Act to Add New and Update Current Protected Categories to Expand Protections for Employees

New Mexico has amended its Human Rights Act via two bills that expand protections against discrimination. Effective May 15, 2024, the Act now includes military status as a protected characteristic, alongside existing categories such as race, religion, age, sex, sexual orientation, gender identity, national origin, ancestry, pregnancy, and disability.

The first bill that amended the New Mexico Human Rights Act, codified in 2024 N.M. HB 302, defines “military status” as an active membership in the armed forces or state defense force, or being a veteran of these forces. It also covers the spouses and children of active members or veterans. As a result, it will now be illegal for employers, labor organizations, joint apprenticeship committees, and employment agencies to discriminate against individuals based on their military status.

This prohibition applies to hiring, firing, promoting, demoting, compensation, terms, conditions, and privileges of employment. Employers are also prohibited from printing or circulating materials that indicate discrimination based on military status.

Additionally, New Mexico has made other significant changes to its Human Rights Act. House Bill 207 expands the Act to add gender as a new protected characteristic, and also modifies the previous definitions of gender identity, sex, and sexual orientation.

Utah Adds Further Protections for Employees Related to Sincerely Held Religious Beliefs

Utah has amended its state Antidiscrimination Act to expand religious accommodation protections for employees. House Bill 396 (H.B. 396) was signed into law by Governor Spencer Cox on March 19, 2024, and took effect on May 1, 2024. This new legislation prohibits employers from compelling employees to communicate or act in ways that conflict with their sincerely held religious beliefs.

Under the new Utah law, if an employee believes that they are being asked to engage in “religiously objectionable expression,” they may request an accommodation. Employers must then assess whether providing the accommodation would create an “undue burden.” An undue burden is defined as a significant interference with the employer’s core mission or the ability to conduct business effectively and reasonably. It also includes substantial interference with safety or training protocols.

The bill defines “religiously objectionable expression” as any expression, action, or inaction that burdens or offends a sincerely held religious belief. This broad definition encompasses various aspects of workplace conduct, including dress and grooming requirements, speech, scheduling, prayer, and even abstentions related to healthcare.

H.B. 396 builds on the U.S. Supreme Court’s ruling in Groff v. DeJoy (See July 2023 Brief), which clarified that employers must accommodate religious practices unless it causes substantial operational costs or creates an undue hardship on business operations. However, H.B. 396 applies these protections to all businesses in Utah, regardless of the number of employees, unlike federal anti-discrimination law that only applies to companies with 15 or more employees (although employers with less than 15 employees would be exempt from select aspects of the Utah law).

Proactive employers in Utah will evaluate their religious accommodation policies to ensure compliance with these new standards and educate supervisors about how to properly handle accommodation requests.

PENDING BILLS

California Proposes Right to Disconnect Law

California is considering a bill that would grant employees the right to disconnect from employer communications during nonworking hours. The proposed legislation, Assembly Bill 2751 (AB 2751), aims to give employees the freedom to ignore most employer contacts outside of their designated work hours, with limited exceptions for emergencies or urgent scheduling changes. If passed, this bill would be the first of its kind in the United States, although similar “right to disconnect” laws are already in place in several other countries, such as France, Portugal, Italy, and Spain.

Introduced by Assemblymember Matt Haney (D-San Francisco), AB 2751 would require both public and private employers to establish workplace policies that ensure employees can enjoy uninterrupted personal time outside of their working hours. These policies must define “nonworking hours” and outline when employers may contact employees during off-hours, with emergencies and last-minute scheduling changes being the primary exceptions. The bill does not distinguish between exempt and non-exempt employees, suggesting that the right to disconnect would apply to nearly all California workers.

An “emergency” is defined as an unexpected event that disrupts or shuts down operations, causes physical or environmental damage, or threatens the safety of a customer, employee, or the public. However, routine business needs, such as tight deadlines or customer complaints, do not meet this definition, indicating that the bill could significantly limit employer flexibility.

Employers found to have a “pattern of violations” could face fines from the California Labor Commissioner, with employees having the right to file complaints if they can document three or more instances of contact outside of working hours.

While the bill is still in the early stages of the legislative process, many employers will use this time to consider their communication practices and how they might be impacted if AB 2751 becomes law. Additionally, if enacted, employers may wish to provide clear training and guidelines to managers and supervisors to avoid unintended violations.

COURT & AGENCY NEWS

The U.S. Federal Trade Commission Adopts Final Rule Banning Non-Compete Agreements

The U.S. Federal Trade Commission (FTC) has adopted a final rule that prohibits most non-compete agreements between workers and employers, with the rule set to take effect 120 days after its publication in the Federal Register. Approved on April 23, 2024, the rule follows a year-long process, which began with a proposal to ban non-competes in January 2023 and garnered over 26,000 public comments, largely in favor of the ban.

The FTC’s final rule bans new non-compete agreements and invalidates existing non-competes for most workers, defining these clauses as “an unfair method of competition” in violation of Section 5 of the FTC Act. It allows for a very narrow exception for non-competes with “senior executives” entered into before the effective date of the rule, but prohibits entering into or enforcing new non-competes with these executives after the rule takes effect. The rule also requires employers to provide “clear and conspicuous notice” to workers subject to invalidated non-competes that these clauses will no longer be enforced against them. Employers have 120 days from the publication date in the Federal Register to ensure compliance with the rule and to provide required notices to affected workers.

Under the final rule, a “worker” includes employees, independent contractors, interns, apprentices, and volunteers, among others. The rule broadly defines “non-compete clauses” as terms or conditions that restrict workers from seeking or accepting other employment or operating a business in the United States after their employment ends. Employers will be required to cease all forms of non-compete enforcement, including any representations that suggest a worker is bound by a non-compete.

The rule has sparked legal challenges, with lawsuits filed in Texas federal courts. The rule’s effectiveness could be delayed or restricted based on the outcome of these legal challenges.

In light of the new rule, some employers may seek alternative strategies for protecting business interests, such as increasing education and communication around employee obligations to safeguard confidential company information.

The U.S. Supreme Court Lowers Bar for Employees to Bring Discrimination Claims

The United States Supreme Court has issued a significant ruling that lowers the threshold for employees to bring discrimination and retaliation claims under Title VII of the Civil Rights Act of 1964.

In its unanimous decision on April 17, 2024, in Muldrow v. City of St. Louis, Missouri, the Court held that employees challenging job actions as discriminatory under Title VII only need to show that the transfer caused “some harm” with respect to an identifiable term or condition of employment. This ruling effectively removes the requirement to demonstrate “significant” harm to establish a Title VII claim. The oral arguments were covered in a previous edition of The Brief (February 2024) and at the time most commentators had expected a ruling of this fashion.

In Muldrow, Jatonya Muldrow, a sergeant with the St. Louis Police Department, sued the City of St. Louis, alleging that her transfer from the Intelligence Division to a patrol position was discriminatory because it replaced her with a male officer. Although her rank and pay remained unchanged, the responsibilities, perks, and schedule in her new role were less favorable. Both the district court and the Eighth Circuit required Muldrow to demonstrate a “materially significant disadvantage,” a standard she could not meet. However, the Supreme Court rejected this heightened standard, concluding that the language of Title VII requires only that the transfer resulted in some disadvantageous change in employment terms or conditions due to discrimination based on a protected category such as sex.

The ruling’s impact extends beyond job transfers, potentially affecting other employment actions such as scheduling changes, work assignments, or other workplace decisions. Although the Court’s decision addressed discrimination in job transfers, it did not limit its scope to this context. Justice Brett Kavanaugh, in a concurring opinion, pointed out that various aspects of a job could demonstrate “some harm,” including changes in schedule, commuting time, prestige, status, or career prospects.

To mitigate legal risks, savvy employers will ensure their policies and training reflect this new legal standard that actions that lead to “some harm” (rather than “significant harm”) are potentially discriminatory.

U.S. Equal Employment Opportunity Commission Issues Final Rule on Pregnant Workers Fairness Act

The U.S. Equal Employment Opportunity Commission (EEOC) has issued its final rule implementing the Pregnant Workers Fairness Act (PWFA), designed to protect the rights of pregnant workers by requiring employers to provide reasonable accommodations for known limitations related to pregnancy, childbirth, or related medical conditions. The final rule was issued on April 15, 2024, published in the Federal Register on April 19, 2024, and will become effective 60 days later, on June 18, 2024.

The PWFA, which went into effect on June 27, 2023, mandates that employers, employment agencies, and labor organizations make reasonable accommodations for pregnant workers unless doing so would impose an undue hardship on the business’s operation. The EEOC’s final rule clarifies several key aspects of the PWFA, including the definition of “reasonable accommodation,” “undue hardship,” and “known limitation,” and provides numerous examples of potential accommodations.

Under the final rule, a “known limitation” refers to a physical or mental condition related to pregnancy, childbirth, or related medical conditions that has been communicated to the employer, whether or not it qualifies as a disability under the Americans with Disabilities Act (ADA). A “reasonable accommodation” could include modifications such as frequent breaks, flexible work schedules, telework, light duty, or job restructuring. The rule also lists certain accommodations that are generally not considered to impose undue hardship, such as allowing employees to carry water, take additional restroom breaks, or adjust between sitting and standing as needed.

Employers are permitted to request supporting documentation for accommodation requests only when it’s reasonable under the circumstances. The final rule outlines specific situations where it would not be reasonable to require such documentation, such as when the limitation and required accommodation are obvious, or when employees seek common pregnancy-related accommodations like carrying water or taking breaks to eat or drink.

The PWFA also includes provisions to protect employees from discrimination and retaliation, prohibiting employers from taking adverse action against employees for requesting accommodations or for their known limitations. The rule extends protections to employees, job applicants, and former employees, and provides avenues for filing discrimination claims similar to those under Title VII of the Civil Rights Act of 1964.

The EEOC has also released informational resources to guide employers through the requirements of the PWFA and help them understand the specific obligations under the new regulations. See also the July 2023 and November 2023 issues of The Brief for more information about prior EEOC guidance on the PWFA and the proposed version of the rule.

Disclaimer: this information is not intended as legal advice. Please consult with legal counsel to ensure your organization’s compliance with applicable legal requirements.