Posted July 29th, 2021.
By Mike LaSusa
States have led the way this year in passing major changes to wage and hour law, and while some high-profile proposals failed to advance, experts say lawmakers are likely to reintroduce them in the future — perhaps with greater success.
Here, Law360 looks at four types of legislation that largely failed to cross the finish line this year but could soon make a comeback.
Salary History Bans
Nevada and Connecticut passed laws this year banning employers from asking job applicants about their salary histories. Worker advocates say those inquiries can trap women and people of color in a cycle where past pay discrimination serves as the basis for keeping them at lower salaries.
But at least nine states, including Arizona, Florida and Minnesota, failed to advance restrictions on employers’ ability to ask about and use salary history when evaluating job candidates.
The spate of salary history bans in recent years has been spurred by an increased focus on racial and gender equity, said Kathleen Caminiti, a partner at management-side firm Fisher Phillips.
“It really is a function of the focus on pay equity during the past five-plus years,” she said. “I would envision that they would continue to be reintroduced.”
Some states are bucking the trend, like Michigan and Wisconsin, which have both “banned the ban” by passing laws forbidding local jurisdictions from enacting restrictions on salary history inquiries.
But overall, the momentum seems to be in favor of more protections for workers, particularly at the federal level, where Caminiti expects lawmakers to reintroduce a version of the failed Paycheck Fairness Act.
“I think you’re going to see federal legislation that amends or replaces the Equal Pay Act, and I would expect that one of the components is going to be a salary history ban,” she said.
Just-Cause Firing Protections
Lawmakers in several states introduced bills this year that would bar employers from firing workers at will. Instead, the bills would require terminations to be based on “just cause,” such as breaking company policies or shirking job duties.
Montana is the only state that currently has a similar standard for terminations, but some cities have begun adopting such legislation in recent years. New York City adopted just-cause protections for fast-food workers this year, while Philadelphia gave just-cause protections to parking industry workers in 2019.
Although no state has passed such legislation recently, advocates are hopeful that momentum will continue to grow, said Paul Sonn, the state policy program director at the nonprofit National Employment Law Project.
“It’s still in its early phase, but we think it has a lot of legs,” Sonn said of the movement for enacting just-cause protections. “We think they’re long overdue to be expanded more broadly.”
The COVID-19 pandemic has fueled support for bolstering worker protections and providing greater job security, said M. Nieves Bolaños of Potter Bolaños LLC.
“There’s no reason why we wouldn’t see a continuing movement to protect the right to make a living,” she said.
Scott Mallery, counsel at employer-side firm Seyfarth Shaw LLP, agreed statewide legislation to implement just-cause protections is likely to succeed somewhere at some point. But Mallery said it could take a few years, and the legislation will probably target certain industries rather than ending at-will employment writ large.
“To change from an at-will to a just-cause employment standard would be basically reformulating the entire regulatory and legal landscape that we’ve been working with,” he said.
Since 2016, more than a half-dozen states have passed laws barring contract provisions that restrict low-wage workers’ ability to accept a job offer from their employer’s competitors. And the list keeps growing.
This year, Nevada outlawed noncompete agreements for hourly workers, while Oregon and Illinois passed restrictions on the use of such agreements.
However, an attempt to enact an all-out ban on noncompetes failed in Illinois and less-aggressive proposals failed to advance in several other states.
Russell Beck, a partner at Beck Reed Riden LLP who tracks noncompete legislation, said lawmakers had a lot on their plates this year and some bills may have failed because other priorities got in the way.
“I wouldn’t take it as an indication that the legislature doesn’t think it’s a good idea,” he said.
Noncompetes can serve to protect sensitive business information in certain circumstances, Beck said. While all-out bans will face stiff resistance from employers, protections aimed at low-wage workers may be more likely to gain traction, he said.
“In most instances, [low-wage workers] are not going to have access to critical company information,” Beck said. “For those people, generally other tools are available to make sure any information they may have is protected.”
Private Attorney General Laws
A handful of states considered legislation this year that would follow in the footsteps of California’s Private Attorneys General Act, which allows workers to bring employment suits in the name of the state.
In Maine, such a proposal passed both houses of the Legislature before being vetoed this month by the governor. Similar legislation failed to become law in Washington and Oregon, and proposals in Massachusetts and New York seem unlikely to pass this year.
Chris Wall, a Seattle-based partner at employer-side firm Stoel Rives LLP, said the Washington proposal was “aggressive” and could be reintroduced in a watered-down form. While it’s not certain a pared-back version would pass, the bill’s supporters are unlikely to give up, he said.
“It’s very clear that the effort to pass legislation like this will continue,” Wall said.
The same is true in Maine, said Jeffrey Young of Solidarity Law, a worker advocate who backed the vetoed legislation.
“It’ll definitely continue to be a hot issue,” he said. “We’re not letting go of it.”
California’s PAGA, beyond being a source of state revenue and a way to supplement government enforcement of employment law, has become a mechanism for workers to take claims of violations to court even if they signed arbitration agreements, said Michael Palmer of Sanford Heisler Sharp LLP.
Courts have held that workers can still sue under PAGA because the state is not a party to the arbitration provisions. That has employers worried about the passage of similar laws and the likely accompanying increase in wage and hour litigation, Palmer said.
“Because of that issue, there is a significant resistance now by companies,” he said. “And that is one of the reasons that it has been hard to adopt similar laws in other states.”
What’s more, the possible passage of a federal ban on forced arbitration agreements, like the one contained in the Forced Arbitration Injustice Repeal Act, could take some wind out of PAGA proponents’ sails, Palmer said.
“I’m sure that there would continue to be backers of these laws, but I don’t think there would necessarily be such as push as there has been over the last few years,” he said.
–Editing by Aaron Pelc and Roy LeBlanc.