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In the Matter of Trustees of Dartmouth College & Service Employees International Union, Local 560, Case 01-RC-325633 (2024), the Regional Office of the National Labor Relations Board (the “NLRB” or the “Board”) has provided yet another expansion of the Board’s on-going interpretation of “employee” under the National Labor Relations Act (the “Act”) in the midst of an unprecedented string of pro-union decisions.

In the February 5, 2024 decision, Regional Director of the NLRB Laura Sacks declared for the first time that student athletes should be considered employees under the Act. The decision focuses on Regional Director Sacks’s determination that the institution compensates the athletes and exerts control over the work they perform.

Dartmouth College argued the athletes should not be deemed employees within the Act because they do not receive compensation in exchange for the work they perform, focusing mainly on the fact that Dartmouth does not provide athletic scholarships to the players. Dartmouth further emphasized that the College does not receive any profit generated from the basketball team, and the players do not receive paid time off, W-2s, or complete I-9s.

Relying heavily on the Board’s opinion in Columbia University, 364 NLRB 1080 (2016), Regional Director Sacks reasoned that “it is appropriate to extend statutory coverage to students working for universities covered by the Act unless there are strong reasons not to do so.” Regional Director Sacks further underscored the broad definition of “employee,” stating “so long as an individual meets the broad Section 2(3) definition of ‘employee,’ they are a statutory employee, regardless of whether their employer is an educational institution, or they are also students while employed.”

Ultimately agreeing with the union’s arguments, Regional Director Sacks found the men’s basketball team performed work that benefited the College, regardless of the actual profitability, by generating alumni engagement, financial donations, and publicity. In addition, Regional Director Sacks found that the College exercised significant control over the players’ work because the athletes are required to provide their services only to Dartmouth and the athletes are required to sign and abide by a players’ handbook (which Sacks equated to an employee handbook). Further, she noted that Dartmouth determines the players’ schedules, such as practices, games, film review, alumni engagement, travel plans, and other team-related activities.

Last, Regional Director Sacks concluded that the players did receive compensation in exchange for their participation on the basketball team, despite the lack of athletic scholarships. Specifically, the compensation was found to be in the form of “early read” for admission, as well as receipt of equipment, apparel, tickets to games, lodging, meals, and benefits from Dartmouth’s Peak Performance Program. Additionally, Regional Director Sacks noted the numerous fringe benefits the athletes receive, such as academic support, career development, sports and counseling psychology, sports nutrition, leadership and mental performance training, strength and conditioning training, sports medicine, and integrative health and wellness.

Although the basketball players were found to be employees under these specific circumstances, it is important to note that the definition of “employee” excludes managers, professional employees, and supervisors as defined in the Act.

Dartmouth College is expected to appeal the Regional Director’s decision to the full Board. We will continue to monitor any announcements with respect to the appeal and will keep you posted as to any future decision on the matter.

In the meantime, please contact a member of Mirick O’Connell’s Labor and Employment Law Group with any questions regarding this Legal Update.

Over the last several years, in an effort to close the gender pay gap, several states and localities across the country have enacted pay transparency laws that, generally, require employers of certain sizes with employees in those locations to disclose salary and hourly wage ranges on job advertisements/postings and, in certain circumstances, to current employees seeking transfers or promotions.

How Prevalent Are Pay Transparency Laws?

As of this writing, pay transparency laws have been enacted in Colorado (the first state to do so), Maryland, Connecticut, Nevada, Rhode Island, Washington, California, and New York (effective September 17, 2023), as well as in several localities, including New York City. Notably, this legislative movement is not showing any signs of slowing down. Indeed, pay transparency laws are currently being considered in at least 15 states, including Massachusetts, Alaska, Georgia, Hawaii, Illinois, Kentucky, Missouri, Montana, New Jersey, Oregon, South Dakota, Vermont, Virginia, West Virginia, and Maryland, as well as Chicago and Washington, D.C.

In addition, two United States Representatives recently introduced a bill in the United States House of Representatives entitled the “Salary Transparency Act” that proposes to amend the Fair Labor Standards Act to require employers to disclose in any public or internal employment posting the wage or wage range for the employment opportunity. The Salary Transparency Act defines “wage range” as “the range of wages, or salaries and other forms of compensation, that the employer providing such employment opportunity anticipates in good faith relying on in setting the pay for such employment opportunity.”

What Should an Employer Do to Ensure Compliance?

Given that nearly half of the country has enacted or is considering enacting pay transparency laws, it is imperative that multi-state employers be aware of their pay transparency obligations. Although pay transparency laws typically require employers to disclose salary and hourly wage ranges on job advertisements/postings, the specific requirements often vary in scope and detail. As a result, before advertising for a position, multi-state employers are well-advised to review whether there is a state-specific pay transparency law in their jurisdiction(s) and, if necessary, tailor their job advertisements/postings and practices accordingly.

What Are Some Specific Examples of Pay Transparency Laws? 

In Colorado, employers with one or more employees in the state must include on a job posting: (1) the hourly rate of salary compensation (or range thereof) being offered for the position; (2) a general description of any bonuses, commissions or other forms of compensation; and (3) a general description of the benefits the company is offering for the position. Benefits that must be generally described include health care, retirement benefits, paid days off, and any tax-reportable benefits.

Significantly, if a business with even a single employee in Colorado advertises a job as a remote opportunity that can be performed outside of Colorado, the law still applies and employers must include the compensation and benefits in the job posting. The Colorado Department of Labor & Employment takes the position that if the job is “capable of being performed in Colorado, including remote work,” then employers are required to disclose the compensation and benefits. Moreover, an employer cannot avoid its disclosure obligations under the law by explicitly stating that it will not accept Colorado applicants. As a result, employers that have even one employee in Colorado may need to comply with Colorado’s pay transparency law.

In California, as of January 1, 2023, an employer with fifteen or more employees, at least one of whom is physically located in California, must include the “pay scale” for the position in the job posting. California defines pay scale to mean the salary or hourly wage range (including commissions or piece rate, if applicable) the employer reasonably expects to pay for a position. In addition, like Colorado, the pay scale must be included in the job posting if the position may ever be filled in California, either in-person or remotely. Unlike Colorado, however, employers in California are not required to post “any compensation or tangible benefits provided in addition to a salary or hourly wage” (although employers may include this information if they so choose).

In New York State, starting on September 17, 2023, employers with four or more employees must disclose the compensation or a range of compensation in an advertisement for a job, promotion, or transfer opportunity, as well as the job description for the job, promotion, or transfer opportunity (if such a description exists). A range of compensation means “the minimum and maximum annual salary or hourly range of compensation for a job, promotion, or transfer opportunity that the employer in good faith believes to be accurate at the time of the posting of an advertisement for such opportunity.” If a position is to be paid solely on commission, then any advertisement shall indicate the compensation shall be based on commission.

Unlike Colorado and California, New York State’s law applies to advertisements for jobs that will be physically performed, at least in part, in New York, as well as jobs that will be physically performed outside of New York, but only if the position will report to a supervisor, office, or other work site in New York.

Employers in New York State that have employees in New York City must also ensure compliance with New York City’s Salary Transparency Law.

What About Massachusetts?

Here in the Commonwealth, two bills are currently pending in the Legislature – one in the Senate and the other in the House – that would require public and private employers employing fifteen or more employees in Massachusetts to “disclose the pay range for a particular employment position within the advertising or posting of the position.” Covered employers would also be required to provide the pay range to a current employee who is offered a promotion or transfer to a new position. The legislation currently pending in the House defines “pay range” as the “annual salary range or hourly wage range or other compensation that the employer reasonably and in good faith expects to pay for such position at that time.”

Given the strong legislative push across the country to enact pay transparency laws, it is reasonable to believe that Massachusetts – a state that generally sets the pace for new employment laws (e.g., paid sick time, paid family medical leave) – will soon adopt a pay transparency law of its own. Employers may wish to take this opportunity to review their compensation systems to ensure they can identify the pay range for each position.

We will continue to monitor any developments in the area of pay transparency and update you as they happen. Should you have any questions about pay transparency laws or require assistance tailoring job applications or postings to ensure compliance with applicable laws, please reach out to any member of the Labor & Employment Group here at Mirick O’Connell.  

As many employers well know, it is customary to include non-disparagement and confidentiality provisions in severance agreements that prohibit departing employees from (i) making disparaging, critical, or otherwise detrimental comments concerning the employer and (ii) disclosing information concerning the substance, terms, or existence of the severance agreement and/or the discussions or negotiations relating to the severance agreement. A recent decision from the National Labor Relations Board (“Board”), however, makes clear that overly broad non-disparagement and confidentiality provisions run afoul of private sector employees’ rights under the National Labor Relations Act (“NLRA”). In light of the Board’s recent decision, private sector employers are well-advised to review their existing non-disparagement and confidentiality restrictions in their severance agreements to ensure compliance with the NLRA. 

A Precedent-Altering Decision from the Board

In the case – McLaren Macomb, 372 NLRB No. 58 (2023) – the employer offered severance agreements to 11 permanently furloughed employees. In addition to releasing claims against the employer, the severance agreements contained broad non-disparagement and confidentiality provisions. The non-disparagement provision restricted employees from making statements to the employer’s employees or to the general public “which could disparage or harm the image of the [e]mployer….” The confidentiality restriction prohibited employees from disclosing the terms of the severance agreement to any third party, other than the employee’s spouse or professional advisor, or unless compelled to do so by law. In exchange for signing the severance agreement, employees were offered monetary consideration.

In its analysis, the Board considered whether these two provisions ran afoul of an employees’ rights under Section 7 of the NLRA, which protects employees’ rights to engage in “concerted activities for the purpose of… mutual aid or protection…,” including the right to discuss the terms and conditions of employment. Section 7 of the NLRA also protects current and former employees’ rights to “improve their lot as employees through channels outside the immediate employee-employer relationship” by communicating with third parties on a range of issues impacting the employment relationship. Against this backdrop, and analyzing the plain language of the non-disparagement and confidentiality provisions referenced above, the Board held that each provision had a reasonable tendency to interfere with, restrain, or coerce employees’ Section 7 rights and, therefore, was unlawful. 

The Board’s General Counsel Issues Guidance on McLaren Macomb

After receiving many inquiries to her office, the Board’s General Counsel recently issued a memorandum with guidance on the scope and effect of the McLaren Macomb decision, a copy of which can be found here. Although the memorandum does not carry the force of law, it does provide significant insight into how the Board might handle a case asserting Section 7 violations due to overbroad severance agreement provisions. Some of the more salient points from the General Counsel’s memorandum are as follows:

• The decision does not outlaw severance agreements; rather, the decision restricts employers from utilizing overly broad provisions in severance agreements that have an adverse impact on employees’ rights to engage in concerted activity protected by Section 7 of the NLRA.

• Even if an employee does not sign a severance agreement containing an overbroad restriction, an employer violates the NLRA merely by proffering a severance agreement containing overbroad non-disparagement and/or confidentiality provisions.  

•  Except under limited circumstances, supervisory employees generally fall outside the scope of the Board’s decision.

• If confronted with a severance agreement containing overbroad provisions, the Board is not likely to move to strike the entire severance agreement. Rather, the Board would likely seek to have the unlawful provisions severed.  

• The decision has retroactive application and applies to overbroad provisions currently existing as part of severance agreements. Thus, if, for example, an employer entered into a severance agreement in June 2022, and tried to enforce an overbroad confidentiality clause in April 2023, such action would be unlawful. 

What Should Employers Do Now?

In light of McLaren Macomb, employers should review their non-disparagement and confidentiality provisions in severance agreements to ensure compliance with the Board’s decision. In addition, for situations in which an employer suspects a former employee of violating a non-disparagement or confidentiality provision in a severance agreement that pre-dates McLaren Macomb, we recommend that the employer seek advice of legal counsel prior to initiating any action to enforce the non-disparagement and/or confidentiality provisions.  

Should you have any questions concerning the McLaren Macomb decision or would like assistance reviewing and/or revising your current severance agreement model, please contact any member of the Labor & Employment Group.  

In September 2015, Executive Order 13706 was signed, requiring employers that enter into covered contracts with the federal government to provide covered employees with up to seven days (56 hours) of paid sick leave annually, including paid leave allowing for family care.  The passage and requirements of the Executive Order did not receive widespread attention, but the Department of Labor has begun audits of covered employers to ensure compliance.

Covered Contracts:

Under the Executive Order, paid sick leave requirements apply to a new contract (beginning on or after Jan. 1, 2017) that is:

1. a procurement contract for construction covered by the Davis-Bacon Act (DBA);
2. service contracts covered by the Service Contract Act (SCA); or
3. contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

The Executive Order does not apply to contracts that are subject only to the Davis-Bacon Related Acts (81 FR 67613).

Covered Employees:

The Executive Order applies to employees that are: (1) working “on” or “in connection with” a covered contract; and (2) whose wages are governed by the DBA, SCA, or FLSA, including employees who qualify for an exemption from the FLSA’s minimum wage and overtime provisions.

An employee who works only “in connection with” covered contracts and spends less than 20% of their time in any workweek doing so does not accrue paid sick leave in that workweek. 29 CFR 13.4(e)

Accrual and Usage:

All employees, in the performance of the covered contract or any subcontract thereunder, must earn at least 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract, up to a total of 56 hours. 

Paid sick leave earned under this order may be used by an employee for an absence resulting from:

1. physical or mental illness, injury, or medical condition;
2. obtaining diagnosis, care, or preventive care from a health care provider;
3. caring for a child, a parent, a spouse, a domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or needs for diagnosis, care, or preventive care described in paragraphs (1) or (2) of this subsection or is otherwise in need of care; or
4. domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes otherwise described in paragraphs (1) and (2) of this subsection, to obtain additional counseling, to seek relocation, to seek assistance from a victim services organization, to take related legal action, including preparation for or participation in any related civil or criminal legal proceeding, or to assist an individual related to the employee as described in paragraph (3) of this subsection in engaging in any of these activities.

The use of paid sick leave cannot be made contingent on the requesting employee finding a replacement to cover any work time to be missed.

Paid sick leave accrued under the Executive Order carries over from year to year and shall be reinstated for employees rehired by the employer within 12 months after a job separation. Contractors may limit employees’ accrued amount of paid sick leave at any point in time to 56 hours.

The paid sick leave required by the Executive Order is in addition to an employer’s obligations under 41 U.S.C. chapter 67 (Service Contract Act) and 40 U.S.C. chapter 31, subchapter IV (Davis-Bacon Act), and employers may not receive credit toward their prevailing wage or fringe benefit obligations under those Acts for any paid sick leave provided in satisfaction of the requirements of the Executive Order.

Notice Requirements:

The Executive Order requires an employer to inform each employee, in writing, of the amount of paid sick leave that the employee has accrued but not used at least once each pay period or each month, whichever interval is shorter, as well as upon a separation from employment and upon reinstatement of paid sick leave.

An employer’s existing procedure for informing employees of their available paid time off, such as notification accompanying each paycheck, or an online system an employee can check at any time, can be used to satisfy or partially satisfy these requirements provided it is written (including electronically) and clearly indicates the amount of paid sick leave an employee has accrued separately from indicating amounts of other types of paid time off available.

In addition, employers must post a notice at the worksite informing employees of the Executive Order’s paid sick leave requirements.

Employers who have (or will) entered into covered contracts should also ensure that their paid sick leave policies are compliant with the Executive Order and the Massachusetts Earned Sick Time Law. 

Please contact a member of our Labor, Employment and Employee Benefits Group if you have any questions about Executive Order 13706.

Government boards and committees should review their public comment policies following a decision this week by the Supreme Judicial Court holding that a “civility code” violated the Massachusetts Constitution’s Declaration of Rights and the Massachusetts Civil Rights Act.

In Barron v. Kolenda, resident Louise Barron attended the Southborough Select Board’s public meeting on December 4, 2018, which was led by acting chair Daniel Kolenda. Before allowing public comment, Kolenda reminded attendees of the Town’s civility code, which provided:

“All remarks and dialogue in public meetings must be respectful and courteous, free of rude, personal, or slanderous remarks. Inappropriate language and/or shouting will not be tolerated. Furthermore, no person may offer comment without permission of the [c]hair, and all persons shall, at the request of the [c]hair, be silent. No person shall disrupt the proceedings of a meeting.”

Following Kolenda’s reminder, Barron stood up holding a sign stating “Stop Spending” on one side and “Stop Breaking Open Meeting Law” on the other. Barron critiqued proposed budget increases, opining that the town “ha[d] been spending like drunken sailors” and was “in trouble.” Barron further critiqued the board for Open Meeting Law violations and told Kolenda to “stop being a Hitler.” Kolenda told Barron to refrain from any further comments and recessed the meeting. During the recess, Kolenda told Barron she was “disgusting” and would have her “escorted out” of the meeting if she did not leave.

Article 19 of the Massachusetts Declaration of Rights provides:

“The people have a right, in an orderly and peaceable manner, to assemble to consult upon the common good; give instructions to their representatives, and to request of the legislative body, by the way of addresses, petitions, or remonstrances, redress of the wrongs done them, and of the grievances they suffer.”

The SJC found that the text of Article 19 encompassed Barron’s statements and the civility code sought to, impermissibly, control the content of her public comments.

The Court explained that public bodies may impose reasonable restrictions on the “time, place, or manner of protected speech and assembly” provided the restrictions are content-neutral, “narrowly tailored to serve a significant governmental interest,” and that there are “ample alternative channels for communication of the information.”

In addition, the SJC found that the civility code violated Article 16 of the Massachusetts Declaration of Rights, which provides: “The liberty of the press is essential to the security of freedom in a state: it ought not, therefore, to be restrained in this commonwealth. The right of free speech shall not be abridged.” The SJC determined the civility code was undeniably directed at political speech because it regulated speech in a public comment session of a meeting of the board. It further decided the civility code was content based because it required that the SJC examine what was said.

In finding that the Town’s civility code violated Article 16, the SJC explained the code’s requirement that the speech directed at government officials “be respectful and courteous, [and] free of rude … remarks” constituted “viewpoint discrimination: allowing lavish praise but disallowing harsh criticism of government officials.” That is, it was not content-neutral.

Finally, the SJC concluded that Kolenda violated the Massachusetts Civil Rights Act by interfering with Barron’s constitutional rights under Articles 19 and 16 via “threats, intimidation or coercion” when he shouted “you’re disgusting,” and threatened to escort her out of the meeting.

The Barron decision follows other recent decisions (Mirick O’Connell Public Education e-Alert (constantcontact.com); Mirick O’Connell e-Alert (constantcontact.com)) holding that policies prohibiting remarks during the public comment portion of meetings for being disrespectful, rude, improper, or abusive are unconstitutional infringements upon individuals’ First Amendment rights. Although this decision prohibits certain restrictions on public comment, the SJC emphasized that government bodies may still require public comment sessions be conducted in an “orderly and peaceable” manner, including designating when public comment is allowed, the time limits for each person speaking, and rules preventing speakers from disrupting others, and removing those speakers if they do.

Of note, the Barron decision did not squarely address whether a public body must allow public comment at meetings. Under the Open Meeting Law, the public must be allowed access to observe the work of public bodies at meetings, but public comment is only permitted at the discretion of the public body and its chair.

Any policies governing public comment at meetings must comply with the holding in Barron and may include reasonable time, place, and manner restrictions so long as they are content-neutral.

Please contact any member of our Public Education or Municipal Law Group if you have any questions about this legal update. 

            Beginning January 1, 2023, changes to the Massachusetts Minimum Wage Law, retail premium pay, and Massachusetts Paid Family and Medical Leave Law take effect.

Changes to Minimum Wage & Premium Pay

• Minimum wage increased from $14.25 an hour to $15.00 an hour (applies to non-agricultural workers and workers that do not receive tips).
• Minimum wage for tipped employees increased from $6.15 an hour to $6.75 an hour.
• The Retail Premium Pay mandate for Sundays and holidays (Massachusetts Blue Laws) is eliminated.

Changes to Paid Family and Medical Leave (PFML)

• The earnings requirement to be eligible for PFML increased to $6,000 during the last four completed calendar quarters.
• The maximum weekly benefits under PFML increased from $1,084.31 to $1,129.82.
• Employer contribution rates (i.e., the tax rate to fund paid leave benefits under PFML) are reduced as follows:
• Employers with 25 or more covered individuals will now need to pay .63% of eligible employee wages.
• Employers with fewer than 25 covered individuals will see their contribution rate fall to .318%.

Employer Reminders

While entering the new year, employers are encouraged to review all employee classifications to ensure that employees are classified correctly under the federal Fair Labor Standards Act and Massachusetts Wage and Hour law.

If you have any questions about your organization’s employee classifications, or questions regarding the 2023 changes, please contact a member of our Labor, Employment and Employee Benefits Group.