Labor and Employment Law: Protecting Your Business from Every Risk

An employer that classifies workers as independent contractors must be prepared to defend that classification against challenge by the IRS, the DOL, state tax and labor agencies, and private plaintiffs, and independent contractor agreements counsel advising on worker classification must evaluate whether the working relationship satisfies the economic realities test applied by the DOL, the ABC test applied by California and other states that have adopted it, and the common law control test applied by the IRS.

A company that uses staffing agencies, subcontractors, or franchisees may be exposed to joint employer liability under the NLRB's standards if it exercises sufficient control over the essential terms and conditions of employment of those workers, and labor laws counsel advising on joint employer risk must evaluate whether the company's contracts with staffing agencies and subcontractors clearly allocate employment responsibilities in a manner consistent with maintaining the contractor's status as the sole employer and whether any day-to-day operational practices create the kind of indirect or direct control that triggers joint employer status.

An employer that is defending a charge of discrimination based on race, sex, religion, national origin, or color must demonstrate that the challenged employment decision was made for legitimate, non-discriminatory reasons and that those reasons were not a pretext for discrimination, and workplace discrimination counsel defending a Title VII claim must evaluate whether the employer's investigation of any underlying complaint was conducted promptly and objectively and whether the documentation of the employment decision accurately reflects the business reasons that motivated the employer's action.

An employer that uses an AI-powered applicant tracking system, automated resume screening tool, or algorithmic candidate ranking system must ensure that these tools do not produce selection rates for protected groups that are substantially below the selection rates for other groups, and discrimination and harassment counsel advising on AI hiring compliance must evaluate whether the employer has conducted a pre-deployment adverse impact analysis on the AI system, whether the vendor's terms of service include representations about the system's compliance with anti-discrimination law, and whether the employer retains sufficient human oversight of the AI system's recommendations.

An employer that classifies employees as exempt from the FLSA's overtime requirements must ensure that those employees satisfy both the salary basis test and the applicable duties test, and wage and hour counsel advising on FLSA exemption classification must evaluate whether the company has conducted a systematic analysis of each exempt employee's actual job duties as performed rather than as described in the job description and whether any changes in the company's operations have altered the job duties of employees classified as exempt in a manner that might defeat the exemption.

An employer operating in California that is subject to PAGA claims must develop a defense strategy that addresses the threat of large civil penalties payable to the state, and employment litigation and consulting counsel advising on PAGA defense must evaluate whether the employer has a valid arbitration agreement that covers the individual plaintiff's claims, whether the arbitration agreement was properly executed and contains a representative action waiver, and whether any cure provisions in the employer's PAGA notice response are sufficient to limit the employer's penalty exposure for the alleged violations.

An employer that terminates an at-will employee must ensure that the termination decision is documented in a manner that will support the employer's legal position if the employee subsequently files a claim of discrimination, retaliation, or breach of an implied contract, and wrongful termination counsel advising on termination risk management must evaluate whether the documentation in the employee's personnel file accurately reflects the performance or conduct issues that led to the termination decision and whether the termination decision is consistent with how the company has treated similarly situated employees.

An employer whose departing employees may take trade secrets or customer relationships to a competitor must evaluate whether the circumstances support an application for emergency injunctive relief that can halt the competitive harm before it becomes irreversible, and restrictive covenants counsel advising on post-employment enforcement must evaluate whether the employer's non-compete, non-solicitation, and non-disclosure agreements are enforceable under the law of the state where the employee worked and whether the scope of each restrictive covenant is narrowly tailored enough to survive judicial scrutiny given the FTC's evolving limitations on non-competes.