Further, even though the NLRB is focused on employee organizing and the right to collective bargaining and on low- and middle-wage workers, the memorandum suggests a broader reach.

The memorandum is not the federal government’s first attack on non-compete agreements. The Federal Trade Commission (FTC) recently published for comment a proposed rule that would ban all forms of non-competition agreements except in the context of the sale of a business. While the comment period has ended, the FTC has yet to issue its final rule, which is almost certain to face challenge in the courts. Moreover, non-disclosure agreements and statutory trade secret protections would still be available to employers.

In her memorandum, Abruzzo found that “[g]enerally speaking, non-compete agreements between employers and employees prohibit employees from accepting certain types of jobs and operating certain types of businesses after the end of their employment.” She went on to say that “[n]on-compete provisions are overbroad, that is, they reasonably tend to chill employees in the exercise of Section 7 rights, when the provisions could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for based on their experience, aptitudes, and preferences as to the type and location of work.”

The five types of activities protected under Section 7 of the Act that Abruzzo believes are chilled by non-competes are:

• “concertedly threatening to resign to demand better working conditions.”
• “carrying out concerted threats to resign or otherwise concertedly resigning to secure improved working conditions.”
• “concertedly seeking or accepting employment with a local competitor to obtain better working conditions.”
• “soliciting their co-workers to go work for a local competitor as part of a broader course of protected concerted activity.”
• “ seeking employment, at least in part, to specifically engage in protected activity with other workers at an employer’s workplace.”

Abruzzo conceded that there may exist “special circumstances” that justify the infringement of employee rights, however, “a desire to avoid competition from a former employee is not a legitimate business interest that could support a special circumstances defense.” Further, she believes some of the traditional legitimate business interests, such as retaining employees or protecting special investments in training, are unlikely to justify an overly broad non-compete “because U.S. law generally protects employee mobility, and employers may protect training investments by less restrictive means, for example, by offering a longevity bonus.” Finally, Abruzzo stated that “employers’ legitimate business interest in protecting proprietary or trade secret information can be addressed by narrowly tailored workplace agreements that protect those interests.”

Despite the above, Abruzzo concludes her memorandum stating that not all non-compete agreements necessarily violate the Act. While the memorandum does not go into detail, she does say that non-compete agreements may not violate the Act where:

• “employees could not reasonably construe the agreements to prohibit their acceptance of employment relationships subject to the Act’s protection”;
• “provisions that clearly restrict only individuals’ managerial or ownership interests in a competing business, or true independent-contractor relationships”; or
• “a narrowly tailored non-compete agreement’s infringement on employee rights is justified by special circumstances.”

There are, however, a few things employers should keep in mind with respect to Abruzzo’s memorandum.

• The Act only applies to certain categories of employees. For example, employees who fall within the Act’s definition of “supervisor” are not protected by it. Similarly, management employees are generally not within the Act’s coverage.
• Abruzzo’s memorandum merely reflects her opinion of how the NLRB should rule if faced with a case involving a non-compete agreement. The NLRB, a five-member panel that interprets the Act, has not ruled on the matter.
• NLRB decisions are subject to challenge in the federal courts. Thus, if the NLRB chooses to adopt Abruzzo’s position, a court challenge is likely to follow.

In light of Abruzzo’s memorandum and the FTC’s recently proposed rule, what are the action items for employers?

• Employers who have entered into non-competition agreements with employees should closely follow any new developments on these issues.
• Employers who have entered into non-competition agreements with employees should revisit those agreements to determine whether this memorandum and/or the FTC Rule affect them, as it is likely they are impacted by at least one of these.
• Employers who regularly have employees enter into non-competition agreements at the start of their employment should determine whether that is a practice they should continue or if there is some other means to protect their business.
• Where employers decide they will continue to use non-competition agreements, they should revisit those agreements to ensure they are narrowly tailored.
• Employers should review their employee confidentiality agreements to ensure they are written so that they are enforceable as a means of protecting their business and that they are taking the appropriate steps to make sure such agreements are enforceable.
• If employers do not regularly use employee confidentiality agreements, they should determine whether such agreements should be used to help them protect their competitive advantage.

• Enter into or attempt to enter into a non-compete clause with a worker;
• Maintain a non-compete clause with a worker;
• Represent to a worker that the worker is subject to a non-compete clause where the employer has no good faith basis to believe that the worker is subject to an enforceable non-compete clause.

Under the proposed rule, a “non-compete clause” is defined as “a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.” A “worker” includes, without limitation, an employee, individual classified as an independent contractor, extern, intern, volunteer, apprentice, or sole proprietor who provides a service to a client or customer.

Under the proposed rule, as defined, a “non-compete clause” would not include restraints during employment, nor would it include other types of common contractual restrictions such as non-disclosure or confidentiality agreements, agreements for the repayment of training costs, agreements providing for the forfeiture of deferred compensation or benefits by competing workers, or agreements restricting a worker from soliciting clients, customers, or other workers. However, the proposed rule provides for a “functional test” under which such restrictions are prohibited if they act as de facto non-competes by being so broad as to have the effect of preventing workers from seeking or accepting other employment following separation from their employer. As a result, if the proposed rule goes into effect, employers should consider having their current non-solicitation clauses and confidentiality agreements reviewed to ensure that they are enforceable and cannot be interpreted as a means to prevent unfair competition under the proposed rule.

The proposed rule requires that employers take affirmative action to rescind existing non-compete clauses with workers no later than the compliance date set forth in the proposed rule, which is currently 180 days after the publication of the final rule. The employer must provide individual notice to each currently employed worker, as well as former workers for whom the employer retains contact information, that are subject to a non-compete clause, advising that the worker’s non-compete clause is no longer in effect and may not be enforced against the worker. The proposed rule provides suggested language for such notice.

In addition, the proposed rule would supersede any state statute, regulation, order or interpretation that is inconsistent with the rule. Thus, for example, in Illinois, the provisions of the Freedom to Work Act governing non-compete agreements in Illinois would no longer be enforceable.

Not all non-competes are prohibited under the proposed rule. Non-compete clauses that are entered into as part of the sale of a business, sale of all or substantially all of a business entity’s operating assets or as otherwise disposing of all of a person’s ownership interest in a business entity are not affected, provided that the person restricted is a substantial owner, member or partner in the business entity at the time the person enters into the non-compete clause.

Here is a link to the proposed rule: https://www.regulations.gov/document/FTC-2023-0007-0001. Comments are due by March 10, 2023, and may be submitted electronically to Regulations.gov or mailed to Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex C), Washington, DC 20580.

The FTC’s supplementary information indicates that the regulator expects comment letters to focus on (1) whether the rule should impose a categorical ban on non-compete clauses or a rebuttable presumption of unlawfulness, or (2) whether the rule should apply uniformly to all workers or whether there should be exemptions or different standards for different categories of workers – senior executives vs. hourly employees, for example.

We will keep you apprised of future developments.

In addition, if an employer enters into a covenant not to compete or covenant not to solicit with an employee, the Act sets forth certain employee notification requirements. Before the employee enters into an agreement containing either or both covenants, the employer must advise the employee in writing to consult with an attorney. The employer must also provide the employee with a copy of the covenant(s) at least 14 days prior to the start of employment or, if the employee has already started employment, the employer must provide the employee with at least 14 days to review the covenant(s). However, the employee can voluntarily elect to sign the covenant(s) before the expiration of the 14-day period.

Finally, the Act provides that the covenant not to compete and covenant not to solicit are illegal and void unless:

• Adequate consideration is given to the employee;
• The restrictive covenant is ancillary to a valid employment relationship;
• The restrictions in the covenant are no greater than necessary to protect the legitimate business interests of the employer;
• The restrictive covenant does not impose an undue hardship on the employee; and
• The restrictive covenant is not injurious to the public.

Of the points above, maybe the most important is whether the restrictions contained in the covenants are no greater than necessary to protect the legitimate business interests of the employer. The Act provides that the factors to be considered in this analysis include the following:

• The employee’s exposure to the employer’s customer relationships or other employees and the near permanence of the relationships the employer has with its customers.
• The employee’s acquisition, use, or knowledge of confidential information through the employee’s employment.
• The time, place and scope of activity restrictions.

In light of the Act and its codification of Illinois case law that has developed around the reasonableness of restrictive covenants, employers should pay special attention when using restrictive covenants. The Act is clear that each restrictive covenant must be evaluated on the facts of each individual case and that identical restrictive covenants might be reasonable and valid under one set of circumstances, but unreasonable and invalid under another set of circumstances. However, restrictive covenants are still alive and well in Illinois and are a valuable tool in a business owner’s toolbox to protect their competitive edge when drafted appropriately.  

Under the Act, an employer cannot enter into a covenant not to compete with an employee unless that employee’s actual or expected earnings exceed a certain level. Initially, the employee’s annualized rate of earnings must exceed $75,000 per year. However, that amount increases to $80,000 on January 1, 2027, to $85,000 on January 1, 2032, and to $90,000 on January 1, 2037.

Similarly, an employer cannot enter into a covenant not to solicit with an employee unless that employee’s actual or expected annualized rate of earnings exceeds $45,000 per year. That amount increases to $47,500 on January 1, 2027, to $50,000 on January 1, 2032, and to $52,500 on January 1, 2037.

With regard to severance agreements, the Act prohibits an employer from entering into a covenant not to compete or covenant not to solicit with an employee who is terminated, furloughed or laid off as a result of business circumstances or governmental orders related to or similar to the COVID-19 pandemic. However, this prohibition is waived if the employer pays the employee compensation that is equivalent to the employee’s base salary at the time of separation for the period of enforcement minus any compensation the employee earns from subsequent employment during the same period.

If an employee is covered by a collective bargaining agreement under the Illinois Public Labor Relations Act or the Illinois Labor Relations Act, a covenant not to compete is void and illegal. Similarly, a covenant not to compete is void if the individual is employed in construction, unless that person primarily performs management, engineering, architectural, design or sales functions or are shareholders, partners or owners.

In order for a covenant not to compete and covenant not to solicit to be valid, the employer cannot just provide the employee with an agreement to sign that contains the restriction. Employers will have to: (1) advise the employee in writing to consult with an attorney before entering into any agreement containing a restrictive covenant; and (2) the employer must provide the employee with a copy of the restrictive covenant at least 14 days before the commencement of the employee’s employment.

The Act also allows the employee to recover attorney’s fees in any civil action or arbitration that is filed by an employer if the employee is the prevailing party. In addition, if the Attorney General of Illinois believes that a person or employer is engaged in a pattern and practice prohibited by the Act, the Attorney General may initiate or intervene in a civil action to obtain appropriate relief.

The Act also codified what has been set forth in Illinois case law regarding restrictive covenants. While traditionally Illinois courts have had the ability to rewrite an overly broad restrictive covenant, the Act recognizes that a court may choose not to rewrite an overly broad restriction. The Act suggests that a court consider the following factors before deciding whether to rewrite an overly broad covenant: (1) the fairness of the restriction as originally written, (2) whether the original restriction reflects a good-faith effort to protect a legitimate business interest of the employer, (3) the extent of the reformation and (4) whether the parties included a clause authorizing modifications to their agreement. In addition, the Act provides guidance on the factors to consider in determining an employer’s legitimate business and what constitutes adequate consideration to support a restrictive covenant.

Importantly, the Act does not become effective until January 1, 2022. As a result, employers have some time to think about how the Act will affect their business starting in 2022 and will have some time to enter into restrictive covenants with employees before 2022 that will be prohibited under the Act. I will write more about that in a future post.

If you have questions or would like to discuss how the Act will affect your business, please contact Thad Felton at (312) 345-5023 or taf@greensfelder.com.

Who does this affect?

Essentially, the Ordinance applies to all employers and workers in the city of Chicago, including non-employees who are independent contractors and performing services for a company in Chicago. Under the Ordinance, an “employer” means “any natural individual, firm, trust, partnership, association, joint venture, corporation or other legal entity who engages the services of at least one individual for payment.”  The Ordinance defines “worker” as “an individual that performs work for an Employer, including as an employee or as an independent contractor.”

What are the new rules?

Under the Ordinance, regardless of whether the COVID-19 vaccine is voluntarily sought or required by the employer, an employer cannot require that the worker get the vaccine only during the worker’s non-scheduled work hours.  And, if a worker does take time off during the worker’s normally scheduled work hours to get the COVID-19 vaccine, an employer cannot take any adverse action (e.g. discipline or terminate) against a worker for doing so.

Under the Ordinance, if a worker has company-provided paid sick leave and/or other company-provided paid time off accrued or otherwise available, and the worker specifically requests to use that time to get the vaccine, the employer must allow the worker to use the paid leave for that purpose.  

However, if the employer requires that workers get the COVID-19 vaccine, the employer must pay workers for the time, up to four hours per dose, it takes the worker to get the vaccine, at the worker’s regular rate of pay, but only if the vaccine appointment is during the individual’s normally scheduled work hours.  And, if the employer does mandate that workers get the COVID-19 vaccine, the employer cannot require that workers use company-provided paid time off and/or paid sick leave (e.g. under the Chicago Paid Sick Leave Ordinance) for the time off needed to get the vaccine.

An employer that takes an adverse action, such as discipline or termination, against a worker who leaves work during the employee’s normally scheduled work hours to get the vaccine will be deemed to have engaged in retaliation against the worker. It is unclear at this time what, if any, advance notice the worker must provide the employer.

What is the penalty to employers for violation?

An employer who violates the Ordinance is liable for a fine between $1,000 and $5,000 per offense. The Chicago Commissioner of Business Affairs and Consumer Protection or the Director of Labor Standards are vested with authority to take action against the employer by instituting an action in administrative hearings or requesting Chicago Corporation Counsel to take action in court against the employer. In addition to the fine, if the employer fired the worker, the worker is entitled to reinstatement to the same or an equivalent position, damages equal to three times the amount of wages lost, as well as any actual damages incurred, and costs and attorneys’ fees.

If you are an employer and have questions about how these changes affect you, please contact an attorney in Greensfelder’s Employment & Labor Practice Group.

Read the full article here.

In this case, a dermatologist, with no patients, joined the plaintiff’s dermatology practice. After approximately nine years, the dermatologist left the practice to establish his own dermatology practice. To get patients, the dermatologist sent a bulk mail solicitation to 52,000 individuals, targeted by ZIP code and addressed to “postal customer,” that informed the recipient of his new dermatology practice. After the bulk mailing had been sent, 71 patients from the plaintiff’s dermatology practice requested that their medical records be transferred to the dermatologist’s new practice.

The court found that the dermatologist’s bulk mailing was not a solicitation. The court focused on the fact that whether particular client contact constitutes a solicitation depends on the method employed and the intent of the solicitor to target a specific client in need of his or her services. Direct solicitation, as opposed to a general advertisement, suggests a private communication directed at a person or persons, known by the person doing the solicitation to have an immediate or potential need for the services. Conversely, a general advertisement does not constitute solicitation because solicitation implies a personal petition addressed to a particular individual to do a particular thing.

In this case, there was no evidence that the dermatologist had his former employer’s patient address list or that the bulk mailing was specifically targeted, as it was sent to “postal customers” within certain ZIP codes. The court recognized that while the bulk mailing may be more targeted than a general newspaper or radio advertisement, it was still not a “personal petition to a particular individual” to sign up with the dermatologist’s new company and it was not a private communication directed at a person or category of persons known by the dermatologist to have an immediate need for his services.  

The case referred to above is Christie Clinic, LLC v. Jeremy Youse, M.D., et al., 2021 WL 1095332 (C.D. Ill. 2021).

The Illinois Business Corporation Act

SB 1480 amends the IBCA to impose new requirements for domestic and foreign corporations that are organized under Illinois law and are required to file an Employer Information Report EEO-1 (EEO-1) with the Equal Employment Opportunity Commission (EEOC).

The EEO-1 is a report filed with the EEOC and requires that employers report on the racial/ethnic and gender composition of their workforce by specific job categories. All employers that have 100 or more employees are required to file an EEO-1 report annually with EEOC, or if they are covered by Title VII of the Civil Rights Act (i.e. 15 or more employees) and have fewer than 100 employees but are owned by or affiliated with another company and together they have 100 or more employees. Lower thresholds apply to federal contractors. Federal contractors must file EEO-1 repots if they have:

1. 50 or more employees; and
2. are prime or first-tier contractors (which means they contract directly with the federal government); and
3. have a contract, subcontract, or purchase order amounting to $50,000 or more; or
4. serve as a depository of government funds in any amount, or are a financial institution that is an issuing and paying agent for U.S. savings bonds and notes.

Beginning January 1, 2023, all such applicable employers must include in their annual reports to the state of Illinois information that is substantially similar to the employment data reported under Section D of the corporation’s EEO-1 report (i.e. gender, race, and ethnicity of the corporation’s employees). The Illinois Secretary of State will then publish the gender, race, and ethnicity data of each corporation’s employees on the Secretary of State’s website.

The Illinois Equal Pay Act

SB 1480 amends the IEPA to require private businesses with more than 100 employees in the state of Illinois to obtain an “equal pay registration certificate.” Existing businesses must obtain certificates within three years after the effective date of SB 1480 (i.e. March 23, 2024), while new businesses must obtain certificates within three years after commencing operations. Recertification is required every two years thereafter.

To apply for the equal pay registration certificate, the applicable business must pay a $150 filing fee, submit an equal pay compliance statement to the director of the Illinois Department of Labor, submit a copy of the employer’s most recent EEO-1 report (if subject to EEO-1 reporting requirements) for each county in which the business has a facility or employees, and provide the total wages (as defined by Section 2 of the Illinois Wage Payment and Collection Act) paid to each employee during the prior calendar year separated by gender, race, and ethnicity. The director will issue the equal pay registration certificate to a business that submits a statement signed by a corporate officer, legal counsel or authorized agent of the business certifying that:

1. The business is in compliance with Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the IHRA, the Equal Wage Act and the IEPA;
2. The average compensation for its female and minority employee is not consistently below the average compensation for its male and non-minority employees within each of the major job categories in the employer’s EEO-1 report, taking into account factors such as length of service, requirements of specific jobs, experience, skill set, effort, responsibility, working conditions of the job, or other mitigating factors;
3. The business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex;
4. Wage and benefit disparities are corrected when identified to ensure compliance with the acts referenced in subparagraphs (a) and with subparagraph (b) above; and
5. Wages and benefits are evaluated to ensure compliance with the acts referenced in subparagraphs (a) and with _subparagraph (b) above.

The employer must also indicate on its equal pay registration certificate whether, in setting compensation and benefits, the employer uses:

1. a market pricing approach;
2. state prevailing wage or union contract requirements;
3. a performance pay system;
4. an internal analysis; or
5. an alternative approach to determine what level of wages and benefits to pay its employees and it must describe this approach.

An employer who does not obtain an equal pay registration certificate or whose certificate is suspended or revoked after an IDOL investigation is subject to a mandatory civil penalty equal to 1 percent of “gross profits.” And, even if the IDOL issues a registration certificate to the employer, this does not constitute a defense against any IEPA violation found by the IDOL, or a basis to mitigate damages.

Whistleblower Anti-Retaliation Protections Under the IEPA

SB1480 also amends the IEPA to prohibit a business from taking any “retaliatory action” against an employee based on certain protected conduct. “Retaliatory action” means the reprimand, discharge, suspension, demotion, denial of a promotion or transfer, or change in the terms and conditions of employment of any employee of a business taken in retaliation for the employee’s involvement in the following protected activity:

1. Discloses or threatens to disclose to a supervisor or to a public body an activity, inaction, policy or practice implemented by the business that the employee reasonably believes is in violation of a law, rule, or regulation;
2. Provides information to or testifies before any public body conducting an investigation, hearing, or inquiry into any violation of a law, rule or regulation by a nursing home administrator; or
3. Assists or participates in a proceeding to enforce the provisions of the IEPA.

In addition to having to engage in protected activity, an employee claiming retaliation must also establish that the alleged protected activity was a “contributing factor” in the alleged retaliatory action. The employer has a defense to any such claim if it demonstrates by clear and convincing evidence that it would have taken the same unfavorable personnel action even if the employee did not engage in the alleged protected activity. A prevailing employee may be awarded reinstatement, double back-pay with interest and reasonable costs and attorneys’ fees.

If you have questions about how these changes affect you, please contact an attorney in our Employment & Labor Practice Group.

The amendments take effect immediately. This blog post will focus on the amendments to the IHRA, and a subsequent blog post will focus on the amendment to the IBCA and the IEPA.

IHRA Amendments

The IHRA is amended to make it a civil rights violation for an employer, employment agency or labor organization (collectively “employer”) to use a conviction record as a basis to refuse to hire, to segregate or to act with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, privileges or conditions of employment, subject to the exception below. “Conviction record” is defined as “information indicating that a person has been convicted of a felony, misdemeanor, or other criminal offence, placed on probation, fined, imprisoned, or paroled pursuant to any law enforcement or military authority.”  

An employer is permitted to deny employment or take an adverse action based on an individual’s conviction record if there is a substantial relationship between one or more of the previous criminal offenses and the employment sought or held, or the granting or continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public. The IHRA defines “substantial relationship” to mean “a consideration of whether the employment positon offers the opportunity for the same or similar offense to occur and whether the circumstances leading to the conduct for which the person was convicted will recur in position sought or held.”

To determine whether a “substantial relationship” exists, the amendments to the IHRA require employers to consider the following factors in evaluating the “substantial relationship” or risk to property or safety factors noted above:

1. the length of time since the conviction;
2. the number of convictions that appear on the conviction record;
3. the nature and severity of the conviction and its relationship to the safety and security of others;
4. the facts or circumstances surrounding the conviction;
5. the age of the employee at the time of the conviction; and
6. evidence of rehabilitation efforts.

The amendments to the IHRA require employers to engage in an “interactive assessment” for disqualifying an applicant or employee. Specifically, the IHRA provides that after considering the above factors, if the employer initially believes that the individual’s conviction record disqualifies the person from the position sought or currently held, the employer is required to notify the individual of this preliminary decision in writing.

The written notification must contain:

1. notice of the disqualifying conviction or convictions that are the basis for the preliminary decision and the employer’s reasoning for the disqualification;
2. a copy of the conviction history report; if any; and
3. an explanation of the employee’s right to respond to the notice of the employer’s preliminary decision before that decision becomes final.

The notice must also inform the employee that the response may include, but is not limited to, submission of evidence challenging the accuracy of the conviction record that is the basis for the disqualification or evidence of mitigation, such as rehabilitation.

Before the employer can render a final decision, it must give the individual five business days from the date the employee receives the required written notification to respond. While the amendments do not, however, define or give examples of what “evidence” the employer is required to consider and/or accept, the amendments do provide that the employer “shall consider information submitted by the employee before making a final decision.” If an employer makes a final decision to disqualify or take an adverse action solely or in part because of the individual’s conviction record, the employer is required to notify the individual in writing of the following:

1. notice of the disqualifying conviction or conviction(s) that are the basis for the final decision and the employer’s reasoning of the disqualification;
2. any existing procedure the employer has for the employee to challenge the decision or request reconsideration; and
3. the right to file a charge with the Illinois Department of Human Rights.

Notably, an employer who uses a third-party screening company to obtain information about an individual’s credit history, criminal background, references, or other personal information must also follow the procedures set out in the Fair Credit Reporting Act (FCRA). The requirements under FCRA are in addition to what is now required under the IHRA should an employer seek to use an individual’s conviction records as a basis for disqualification.

Because the amendments to the IHRA described above go into effect immediately, Illinois employers currently onboarding applicants who may have criminal convictions that could disqualify, or those that learn/know of criminal convictions that the employer may seek to use as a basis to discipline and/or terminate, must quickly familiarize themselves with the new obligations under the IHRA to avoid a charge of discrimination.

If you have questions about how these changes affect you, please contact an attorney in our Employment & Labor Practice Group.

Read the full article here.

On December 31, 2020, FFCRA’s paid sick and family leave mandate for covered employers subject to FFCRA’s provisions (less than 500 employees) expired. However, after former President Trump signed the Consolidated Appropriations Act (CAA) into law on December 27, 2020, covered employers have the option to voluntarily offer paid sick and/or paid family leave to eligible employees, and may continue to receive a payroll tax credit for such wages beginning January 1, 2021 through March 31, 2021.

The ARP does not restore FFCRA’s paid sick leave and/or paid family leave mandate; rather, whether to offer such paid leave continues to be voluntary and at the sole discretion of a covered employer, just as it is under the CAA. The ARP does, however, extend the payroll tax credit to covered employers who voluntarily choose to provide paid sick and/or paid family leave under FFCRA to qualified employees from March 31, 2021, to September 30, 2021.

Notably, the ARP also expands the reasons in which a covered employer may voluntarily provide paid sick and/or paid family leave to include leave provided to an employee who is (1) getting the COVID-19 immunization shot; (2) recovering from an injury, disability, illness or condition related to getting the COVID-19 immunization shot; or (3) seeking or awaiting the results of a COVID-19 test or diagnosis because (a) the employee has been exposed to COVID; or (b) the employer requested the test or diagnosis. If offered as paid sick leave, employees are to be paid at their regular rate of pay for the duration of the two-week eligibility period. If offered as paid family leave, employees are to be paid at 2/3 their regular rate of pay for the duration of the 12-week eligibility period.

In addition, the ARP expands the reasons that a covered employer can voluntarily offer paid family leave under the Emergency Family Medical Leave Act (EFMLA) to include all the qualifying reasons under the Emergency Paid Sick Leave Act and still receive the payroll tax credit. The ARP also permits employers to pay employees for the first two weeks of paid family leave under the EFMLA (paid at 2/3 the employee’s regular rate of pay) and collect payroll tax credits for that two-week period, whereas under FFCRA, the first two weeks of paid family leave under the EFMLA were unpaid. This raises the maximum payroll tax credit limit for paid family leave under the EFMLA from $10,000 to $12,000 per employee, still capped at $200 per day, and paid at 2/3 the employee’s regular rate of pay for the 12-week period.

Further, employers may now voluntarily provide an additional 10 days of paid sick leave to employees, even if employees previously exhausted their allotted 10 days of paid sick leave prior to April 1, 2021, and the employer previously took tax credit for that paid leave.

Finally, the ARP mandates non-discrimination when a covered employer voluntarily chooses to provide paid sick and/or paid family leave to qualified employees. The ARP disqualifies an otherwise qualified employer from collecting the payroll tax credits on any paid sick and/or paid family leave wages paid in any calendar quarter if the employer discriminates in favor of (a) highly compensated employees (within the meaning of Section 414(q) of the Internal Revenue Code); (b) full-time employees; or (c) employees on the basis of employment tenure.

The ARP also makes temporary but significant changes to Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) coverage. A short (and high-level) summary of these changes is below:

• The federal government will pay COBRA premiums for employees (and their covered family members) who from April 1, 2021, through September 30, 2021, are/remain eligible for COBRA coverage as a result of losing their group health insurance due to an involuntary termination (other than on account of gross misconduct) or reduction in hours in the prior 18 months (on or after November 1, 2019). This subsidy does not apply to those who voluntarily quit their employment.
• Within 60 days of April 1, 2021, a notice of a special enrollment period must be sent to all eligible participants who (1) have not yet elected COBRA coverage by April 1, 2021; or (2) elected COBRA coverage, but then discontinued it. Eligible participants will have until 60 days after receipt of the notice to elect COBRA.
• The Department of Labor is supposed to issue model notices within 30 days (by May 10).
• Any election for these participants would be prospective only (i.e. April 1, 2021, through September 30, 2021), and not retroactive to the date coverage was lost.
• The ARP subsidy does not extend COBRA coverage. Coverage will still expire 18 months after coverage was lost, even if that is in the middle of the subsidy period.
• So, if an employee lost group health benefits on March 1, 2020, due to an involuntary separation, the employee’s 18 months of eligibility would expire on July 31, 2021, and COBRA premiums would be subsidized for five months, namely April 1, 2021, through July 31, 2021. And, if an employee loses group health benefits on July 1, 2021, subsidized COBRA coverage will be available only for the months of July, August and September 2021, even though the employee’s COBRA eligibility period extends 18 months to August 31, 2022.
• Any employee or family member who is or becomes eligible for other group health coverage or Medicare is not eligible for the subsidy. The individual has the obligation to notify the employer if he or she is not eligible or loses eligibility.
• There is no income cap for the subsidy.

Our Employment & Labor Practice Group attorneys are continuously monitoring developments and are available to answer questions related to COVID-19’s many effects on employers.

House Bill 3066 proposes to amend the Illinois Freedom to Work Act to restrict the use of covenants not to compete and covenants not to solicit.  While this bill seeks merely to only allow for the use of restrictive covenants with employees earning over a certain threshold annual amount, one House Bill and one Senate Bill seek to prohibit the use of covenants not to compete in their entirety.

Here is a summary of some of the proposed amendments involving covenants not to compete and covenants not to solicit in House Bill 3066:

Restrictions apply based on employee compensation: The use of covenants not to compete and covenants not to solicit can only be used with employees earning in excess of a certain annual dollar amount.

• A covenant not to compete will not be valid unless the employee’s actual or expected annual compensation exceeds $75,000 per year. The $75,000 threshold will increase to $80,000 on January 1, 2027; to $85,000 on January 1, 2032; and to $90,000 on January 1, 2037.
• A covenant not to solicit will not be valid unless the employee’s actual or expected annual compensation exceeds $45,000 per year. The $45,000 threshold will increase to $47,500 on January 1, 2027; to $50,000 on January 1, 2032; and to $52,500 on January 1, 2037.
• A covenant not to compete will not be valid if an employee is terminated or furloughed as a result of “business circumstances or governmental orders” unless the employee is paid his or her base salary for the term of the restricted period, minus any compensation earned from subsequent employment. A separate House Bill (HB 4007) would require that the employee be paid “full compensation” during this period, including all benefits the employee would have received had employment not been terminated, until the time for the covenant not to compete has expired or the employee gains full-time employment at a commensurate rate of pay and benefits.

Codification of existing Illinois case law: The bills propose to codify existing case law in Illinois regarding restrictive covenants. Specifically, the bills provide that a covenant not to compete or a covenant not to solicit is not valid unless:

• The employee receives adequate consideration, which is defined as (1) the employee working for the employer for at least two years after the employee agreed to the restrictions or (2) the employer otherwise provided consideration adequate to support the agreement, which could consist of the period of employment plus additional consideration or merely other consideration adequate by itself;
• The covenant is ancillary to a valid employment relationship;
• The covenant is no greater than is required for the protection of a legitimate business interest of the employer;
• The covenant does not impose undue hardship on the employee; and
• The covenant is not injurious to the public.

Employee to receive prior notice of restrictions. A covenant not to complete and a covenant not to solicit is not valid unless the employee is provided with a copy of the covenant(s) at least 14 days before the commencement of employment and the employer advises the employee in writing to consult with an attorney before agreeing to the covenant(s).

Employee entitlement to attorneys’ fees: In the event of litigation, if an employee prevails on a claim brought by the employer to enforce a restrictive covenant, the employee shall be eligible to recover from the employer all costs and reasonable attorneys’ fees.

Doing away with covenants not to compete: Unlike the bill outlined above, House Bill 3449 and Senate Bill 1838 would prospectively prohibit the use of covenants not to compete in agreements between employers and employees. This is different from House Bill 3066, which seeks to limit the use of covenants not to compete with employees who earn below a certain threshold amount. The Senate Bill does not currently address covenants not to solicit.

Covenants not to compete and covenants not to solicit play an important role in protecting businesses and allowing for fair competition. While no one wants to prevent someone from earning a living and seeking other employment, there are circumstances in which an employee should not be able to do that if doing so would unfairly injure the previous employer. That is where carefully drafted restrictive covenants are necessary and appropriate. The pending bills seek to draw lines and put unfair one-size-fits-all constraints on employers.

Part of the challenge a business faces in drafting restrictive covenants is trying not to over-reach. A business has a much better chance of having a narrowly tailored restrictive covenant enforced than one that is overbroad. Furthermore, while an overbroad restrictive covenant may have some deterrent effect, if it is invalidated by a court, there could be severe consequences for the business.

For example, non-competition provisions contain geographic restrictions. As opposed to restricting the employee from competing anywhere in Illinois or in the United States (unless such a restriction is appropriate), the employer should spend some time to determine the proper area in which competition should be prohibited by that particular employee. Some of the factors a business should consider in making this determination include (1) where the company does and gets its business, (2) where the employee is located, (3) the employee’s role, (4) where the employee performs his or her job responsibilities, (5) the consequences of what would occur if the employee began competing against the employer and (6) other mechanisms that may be available to curb the employee from competing, such as other restrictive covenants. In addition, the geographic scope that is appropriate for one employee may not be appropriate for another employee. In the end, the narrower and more reasonable the geographic restriction, the more likely the non-competition provision will be enforced by a court.

Similarly, non-solicitation provisions frequently prohibit employees from soliciting customers and potential customers of the company for a period of time after the employee has left the company. However, many times courts are reluctant to enforce non-solicitation provisions against customers or potential customers that the employee has never had any interaction with or about whom the employee does not have any confidential or particular information. To make non-solicitation provisions more enforceable, companies should consider how “customer” and “potential customer” are defined in that provision. Depending on the business and the employee, one consideration may be to define a “customer” to include someone the employee has worked with in the 12 months prior to their departure or a “potential customer” as someone the employee has attempted to sell X to in Y months prior to their departure. 

Finally, non-disclosure provisions generally contain a boilerplate definition of “confidential information.” However, some courts have found that general boilerplate definitions of “confidential information” may not adequately inform the employee of the exact information that company considers to be confidential or a trade secret. Companies should think about including, in addition to the boilerplate definition, a list of specific things the company considers to be confidential and a trade secret.

In addition to the issues identified above, there are many other steps businesses can take to draft restrictive covenants that courts should find to be enforceable. Restrictive covenants are one of many tools a business is able to use to keep its employees from unfairly competing against them when they leave. Instead of recycling old agreements with restrictive covenants or using a one-size-fits-all approach, businesses of any size should make sure the restrictive covenants they use are drafted in such a way that they will be upheld in court.

With regard to competition, the duty of loyalty prohibits employees or officers from improperly competing with their employers, enticing employees away from their employer, soliciting the employer’s customers, diverting business opportunities, exploiting their positions for their own self benefit, concealing important information and/or otherwise misappropriating the employer’s property or funds.  In other words, they have to act in the interest of their employer and not engage in self-dealing.  In addition, they may not take any action that is against the interest(s) of their employer. 

However, with regard to competing against their employer, provided the employee is not bound by any restrictive covenants or has not breached a duty of loyalty, an employee may prepare to compete against their employer.  An employee may form a competing business, enter into a lease or purchase office space, hire employees (provided they are not current co-employees) and otherwise outfit a competing business, all while still working for their employer.  However, that employee may not begin competing against their employer until after they have left their employment. 

Corporate officers are treated a little differently in that they owe a heightened duty of loyalty to their employer.  It has been explained generally that an employee’s duty is one of loyalty and non-competition, while an officer’s duty is not to actively exploit the company for his or her personal gain.  A corporate officer’s duty of loyalty includes (1) not actively exploiting their position within the corporation for their own personal benefit, and (2) not hindering the ability of the corporation to continue its business.  For example, an officer might be found to have breached their duty if they fail to inform the company that employees are forming a rival company or engaging in other fiduciary breaches, solicit business from a customer before leaving the company, use the company’s facilities or equipment to assist them in developing their new business or solicit fellow employees to join a rival business.     

Importantly, an employee or officer’s duty of loyalty to their employer ends once the employment relationship ends.  That is one of the reasons that many employers require officers and key employees to enter into non-competition, non-solicitation and/or non-disclosure agreements and keep those agreements up to date.  These agreements help prevent employees and officers from resigning and the next day starting to compete against their former employer using the knowledge and training gained during their employment.

In Illinois, confidential information has been defined by the courts as particularized information that has been disclosed to an employee during the employer-employee relationship. This information must be (1) unknown to others in the industry and (2) give the employer an advantage over its competitors.

Trade secrets are a subset of confidential information and are defined in Illinois through the Illinois Trade Secrets Act. Under the Illinois Trade Secrets Act, a trade secret is defined as information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers that:

1. is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and
2. is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality.

In addition, while not determinative, courts in Illinois may also look to the following factors to assist them in determining whether information qualifies for protection as a trade secret:

1. The extent to which information is known outside of the business;
2. The extent to which the information is known by employees and others involved in the business;
3. The extent of measures taken to guard the secrecy of the information;
4. The value of the information to the business and competitors;
5. The amount of effort or money expended by the business in developing the information; and
6. The ease or difficulty with which the information could be properly acquired or duplicated by others.

All information that qualifies as a trade secret is confidential information. However, not all confidential information is a trade secret. As a result, the category of information that is potentially protectable as confidential information is more encompassing than a business’ trade secrets.

The first step a business should take in identifying its confidential information and trade secrets is to conduct an internal audit. Once a business has identified its confidential information and trade secrets, the business can put in place the necessary protections to help it maintain its competitive advantage. Those protections may include restricting access to the information through internal and external security measures, having employees and third parties sign confidentiality agreements and restrictive covenants, developing internal policies and procedures and implementing a compliance monitoring plan. There is no-one-size-fits-all approach to protecting confidential information and trade secrets. However, identification is the first step.

The court found that the lead lists were eligible for protection as trade secrets. The lead lists contained information regarding a customer’s name, telephone number, purchase history, public service announcements purchased and pricing. As a result, the compilation of customer information could be eligible for protection as a trade secret provided that the other hallmarks of a trade secret were met – that the information was kept sufficiently secret and that reasonable efforts were made to maintain the secrecy. This is where the former employer failed.

The court found that while the former employer provided the names of its customers to the radio stations, that did not necessarily mean that the information on the lead lists could not be protected as trade secrets. However, the court found that the former employer had not taken appropriate steps to protect the trade secrets. Among other things, the former employer had not entered into non-competition agreements with the three sales representatives. In addition, the former employer did not enter into confidentiality agreements with the radio stations, and once a competitor received the name of the customer, the competitor could contact the customer and acquire whatever information the customer is willing to provide to it.

While one cannot say that this case would have turned out differently if the former employer had been more proactive in protecting its trade secrets, there were certainly steps the former employer could have taken to better position itself for success. Among those steps were entering into employment agreements with the sales representatives that contained provisions that prevented them from competing against their former employer or soliciting their former employer’s clients; entering into confidentiality agreements with sales representatives in which the sales representatives specifically acknowledged that the lead lists were confidential information; and entering into non-disclosure agreements with the radio stations so that they could not disclose customer information to others. Regardless, this case is a reminder that businesses should take affirmative steps to protect their trade secrets and confidential information.

The case is Multimedia Sales & Marketing, Inc. v. Marzullo, 2020 IL App (1^st) 191790.

The primary impetus for the revisions to the FFCRA regulations was to provide clarity following the August 3, 2020, decision of the U.S. District Court for the Southern District of New York, which invalidated four different portions of the FFCRA regulations.

The revised FFCRA regulations, which take effect September 16, 2020, do the following:

1.  Reaffirm the requirement that an employee is not eligible for paid leave under the EPSL and/or the EFMLEA if his/her employer has no work available for the employee to perform, even if the employee is otherwise qualified for paid leave under FFCRA.

• The DOL affirmed that for an employee to be eligible for paid leave under the EPSL and/or EFMLEA, his/her employer must actually have work available for the employee to perform at the time paid leave is requested.
• Thus, if there is no work available for the employee to perform due to circumstances other than a qualifying reason for leave (DOL uses as an example, “perhaps the employer closed the worksite temporarily or permanently”), the FFCRA qualifying reason could not be, and is not, the reason for the employee’s inability to work.
• The DOL clarified that the “work availability” requirement applies to all six qualifying reasons under the EPSL and EFMLEA.

2.  Reaffirm the requirement that an employee must have employer approval to take intermittent FFCRA leave.

• As it relates to the school leave issues employers have been facing, the DOL explained, “The employer approval condition would not apply to employees who take FFCRA leave in full-day increments to care for their children whose schools are operating on an alternate day (or other hybrid attendance) basis because such leave would not be intermittent leave.”
• The DOL used the example of a parent who needs to take leave due to his/her child’s school being closed on Monday, Wednesday and Friday of one week, and Tuesday and Thursday of the following week. According to the DOL, “For purposes of FFCRA, each day of school closure constitutes a separate reason for FFCRA leave that ends when the school opens the next day,” thus it is not intermittent leave.  Therefore, under the above alternate day/hybrid attendance scenario, if the employee is eligible for paid leave under the EPSL and/or EFMLEA, leave should be granted.
• The DOL distinguished the above scenario from an alternative scenario when a child’s school is closed for a continuous and extended period of time (e.g. two months), and the employee wishes to take leave only on certain days. The DOL explained that this would constitute intermittent leave and require employer consent for the employee to be granted paid leave, even if the employee is otherwise eligible.

• a parent learns that his or her child’s school will be closed Tuesday, after already reporting to work on Tuesday.

3.  Revise the definition of a “health care provider” who may be excluded by their employer from EPSL and EFMLEA to include employees who meet the definition of a health care provider under the FMLA regulations, and those individuals who are employed to provide diagnostic services, preventative services, treatment services, or other services that are integrated with and necessary to the provision of patient care which, if not provided, would adversely impact patient care.

• The DOL adopted the FMLA’s definition of a “health care provider” (e.g. physicians and others who make medical diagnoses);
• The DOL also expanded the definition of a “health care provider” to include an individual who is “capable of providing healthcare services.” According to the DOL, a “health care provider” must be “employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care, and that if not provided would adversely impact patient care.” The DOL explained that for purposes of this health care provider definition, the focus should be on the individual’s duties and responsibilities, “even if not performed by individuals with a license, registration, or certification.”
• The DOL determined that an individual is “capable” of providing health care services “if he or she is employed to provide those services ... the fact that the employee is paid to perform the services in question is, in this context, conclusive of the employee’s capability.”
• The DOL identified three categories of individuals who may qualify as health care providers (and who may therefore be denied leave under the EPSL and EFMLEA):
  1. Nurses, nurse technicians, medical technicians, and others who provide diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care;
  2. Employees who provide diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care under the supervision of a doctor, nurse, nurse technicians, or medical technicians.
  3. Employees who may not directly interact with patients, and/or who may not report to another health care provider or directly assist another health care provider, but “nonetheless provide services that are integrated with and necessary components to the provision of health care.” One example provided is a lab technician who processes test results.
• The DOL explained that individuals who provide services that affect, but are not integrated into the provision of patient care, are not covered under the definition of “health care provider,” e.g., IT professionals, building maintenance staff, human resources personnel, food service workers, managers, consultants, and billers.

4.  Clarify that employees must provide their employers with the required documentation (e.g. name, date(s) for leave, qualifying reason for leave, oral statement that employee is unable to work or telework, and any other supporting documentation such as quarantine or isolation order, doctor’s note advising employee to self-quarantine, school or place of care closure letter, etc.) supporting their need for EPSL and/or EFMLEA leave “as soon as practicable.”

• The DOL stated that the previous requirement that an employee must provide their employers with the required documentation “prior to” taking paid leave will be removed.
• Under the revised FFCRA regulations, employees requesting paid leave under the EPSL and/or EFMLEA must provide their employers with the required documentation, “as soon as practicable.” According to the DOL, in most cases this will be when the employee provides notice to his/her employer of the need for leave.

 5.  Correct an inconsistency regarding when employees may be required to provide notice of a need to take expanded family and medical leave to their employers.

• FFCRA regulations will now state that when the need for leave under the EFMLEA is “foreseeable,” advance notice is to be provided to the employer “as soon as practicable.”
• The DOL uses the example of a parent learning on Monday that his or her child’s school will be closed on Tuesday for a COVID-19 related reason. Under this scenario, the DOL instructs that the “employee must notify his or her employer as soon as practicable [likely Monday at work].”
• Alternatively, when need for leave under the EFMLEA is not foreseeable, “the employee may begin to take leave without giving prior notice, but must still give notice as soon as practicable” (i.e. that same day). For example, this would apply when a parent learns that his or her child’s school will be closed Tuesday, after already reporting to work on Tuesday.

Our Employment & Labor Practice Group attorneys are continuously monitoring developments related to paid leave under the EPSL and the EMFLEA and are available to answer questions related to COVID-19’s many effects on employers.

Link to COVID-19 Resources page

Fair Labor Standards Act (FLSA) Guidance

• Employees must be compensated for all hours worked via teleworking. Work performed away from the primary worksite is compensable in the same manner as work performed at the worksite. This is true even though the employer has less oversight of work performed from other locations (such as the employee’s home), and applies even if the work is not authorized. Employers are required to compensate employees for all hours reported to the employer and all hours the employer knows or has reason to believe were worked by an employee. This rule applies both to regular hours and overtime. An employer may implement rules prohibiting employees from working unauthorized hours and may discipline an employee for violating such rules, but the hours worked are still compensable. The DOL recommends employers impose reasonable time-reporting procedures to minimize problems in this area.
• Employees need not be compensated for time spent tending to personal matters during the workday. The COVID-19 pandemic has created a number of issues, in particular for non-exempt employees/parents of school-aged children. While the Wage and Hour Division generally considers the time between an employee’s “first and last principal task” to be compensable, this rule is relaxed to allow non-exempt employees and employers to agree to more flexible schedules that allow employees time to care for, teach and otherwise tend to children who need such attention during the workday. Employees must only be compensated for time actually spent working. This rule similarly applies if an employee takes time out during the workday to tend to other personal matters unrelated to children.
• Pandemic-specific rules for salaried, exempt employees. During a period of national emergency, such as COVID-19, certain rules applicable to salaried employees who are exempt from the overtime rules are relaxed. During the pandemic, exempt employees may temporarily perform non-exempt duties due to COVID-19 without losing their exempt status. Separately, employers may reduce an exempt employee’s salary so long as it is done (1) prospectively (i.e. not current, but subsequent pay period, (2) is in writing; (3) the employee’s weekly salary remains above $684; and (4) the reduction is the result of the pandemic or economic slowdown. The DOL also made clear that exempt employees will not lose their exempt status as a result of the exempt employee taking paid sick leave and expanded family and medical leave pursuant to the Families First Coronavirus Recovery Act.

Family and Medical Leave Act (FMLA) Guidance

• Telehealth visits with a health care provider may satisfy the FMLA’s requirement of an in-person visit for purposes of determining a “serious health condition.” For now, this guidance applies only through Dec. 31, 2020. The telehealth visit must include an examination, evaluation or treatment.

Families First Coronavirus Response Act (FFCRA) Guidance

• The FFCRA paid sick leave and expanded FMLA requirements are cumulative for 2020. If an employee uses their 80 hours of paid sick leave, is subsequently furloughed, returns to work and a need arises for additional sick leave, the employee is not entitled to additional paid leave under the FFCRA. Similarly, if an employee used six weeks of expanded FMLA during the spring of 2020 and needs additional leave in the fall because a child’s school or daycare is closed, the employee is entitled only to the amount of leave remaining (i.e. six weeks), not a renewed amount.
• Employers cannot extend an employee’s furlough because the employee may qualify for leave under the FFCRA. An employer that is recalling employees from furlough may not extend an employee’s furlough because that employee may need leave under the FFCRA. For example, if an employee being recalled from furlough has a child whose school or daycare is closed, the employer cannot extend the furlough to avoid providing the employee with paid FFCRA leave.
• Employers may require an employee to telework or provide a negative COVID-19 test before returning from an FFCRA leave, provided that the requirement is uniformly applied, and not only applied to employees who take FFCRA leave. For example, an employee requests two weeks of paid leave under the FFCRA to care for a family member who tested positive for COVID-19. Upon conclusion of the employee’s two weeks of paid leave, the employer may require the employee to provide a negative COVID-19 test or telework for a period of time only if the employer requires all employees to provide a negative COVID-19 test or telework for a period of time following exposure to someone who tested positive for COVID-19. If the rule is uniformly applied, it complies with the law. If it is applied only to employees who take FFCRA leave, then the rule violates the law.

Our Employment & Labor Practice Group attorneys are continuously monitoring developments and are available to answer questions related to COVID-19’s many effects on employers.

Link to COVID-19 Resources page

The doctrine of impossibility of performance is also known as legal impossibility, legal impracticability and impossible performance. The doctrine excuses contractual performance when the performance is rendered objectively impossible either by operation of law or because the subject matter of the contract has been destroyed. See Innovative Modular Solutions v. Hazel Crest School District, 2012 IL 112052, ¶37. Said another way, the doctrine is applied if there is an unanticipated circumstance that made the performance of the contract vitally different from what should reasonably have been within the contemplation of the parties at the time they entered into the contract. See Sunshine Imp & Exp Corp. v. luxury Car Concierge, Inc., No. 13 C 8925, 2015 WL 2193808 (N.D. Ill. May 7, 2015).

If a government order, such as a state or local “stay in place” order, makes a party’s contractual performance impossible, that party may be able to avoid its contractual obligations under the doctrine of impossibility of performance. Generally, if parties enter a contract and subsequent events not described in the contract render performance impossible, the parties’ performance is not excused, but delayed. However, the doctrine of impossibility is an exception. In an instance where the continued existence of a particular circumstance is so necessary to the performance of the contract that, by law, it is implied to be a condition of the contract, the destruction of that circumstance excuses, not just delays, performance. Leonard v. Autocare Sales & Service Co., 392 Ill. 182, 187 (1945).

When can impossibility be applied?

A party raising impossibility as a defense to contract performance must show (1) an unanticipated circumstance, (2) that was not foreseeable, (3) that the party did not contribute to, and (4) and that the party seeking the defense tried all practical alternatives to avoid. Bank of America, N.A. v. Shelbourne Development Group, Inc., 732 F.Supp.2d 809, 827 (N.D. Ill. 2010). However, because the lawful purpose of a contract is to allocate risks that affect performance, and because contractual performance should only be excused in extreme circumstances, the doctrine is narrowly applied. See YPI 180 N. LaSalle Owner, LLC v. 180 N. LaSalle II, LLC, 402 Ill.App.3d 1, 6 (2010).

In addition, there are several important caveats to the application of the doctrine.

• First, the doctrine does not apply to excuse performance as long as it lies within the power of the party invoking the doctrine to remove the obstacle to performance. See Downs v. Rosenthal Collins Group, LLC, 2011 IL App (1^st) 090970, ¶37.
• Second, the defense of impossibility fails when the party invoking it has not made reasonable efforts to prevent the occurrence of the event that has made performance impossible, i.e., the party must demonstrate that it has tried all practical alternatives available to permit performance. See First Nat. Bank of Chicago v. Atlantic Tele-Network Co., 946 F.2d 516 (7^th Cir. 1991).
• Third, the party asserting the doctrine must not have contributed to the circumstances causing the alleged impossibility. See Blue Cross Blue Shield of Tennessee v. BCS Inc. Co., 517 F. Supp. 2d 1050, 1056 (N.D. Ill. 2007).
• And fourth, the party advancing the doctrine has the burden of proving impossibility. See Michigan Avenue National Bank v. State Farm Insurance Companies, 83 Ill. App. 3d 507, 514 (1980).

Courts in Illinois have applied the doctrine of impossibility of performance in the following instances:

• Borrower defended its inability to obtain a construction loan commitment by a date certain, which resulted in the bank accelerating amounts due under a loan, by claiming that unforeseeable and unprecedented economic downturn and recession made its performance impossible. In asserting this defense, the borrower relied in part on statements by the bank’s own officers and executives that the current economic conditions were “unprecedented,” “unparalleled” and “not reasonably foreseeable.” The court recognized that generally when performance becomes economically burdensome, performance is not excused, but in this instance, the court found that if the borrower could establish that the parties could not have foreseen the extent of the economic downturn (the 2008 credit crunch) and performance was therefore impossible, it could satisfy the requirements for an impracticability defense. Bank of America, N.A. v. Shelbourne Development Group, Inc., 732 F.Supp.2d 809 (N.D. Ill. 2010).
• In an old Illinois Supreme Court case, the court addressed the issue of whether a school district was required to pay a teacher who was ready, able and willing to teach during the time the school was closed by the state board of health as a result of an influenza epidemic. While recognizing the doctrine of impossibility of performance, the court found that the school district could have inserted into the teacher’s employment contract a provision exempting the district from liability in the event of a contagious epidemic. However, because the school district chose not to do so, the court held that it was not relieved from its liability to pay the teacher. See Phelps v. School Dist. No. 109, Wayne County, 302 Ill. 193 (1922). As a word of caution, this holding may be limited to its facts involving public school teachers following the Spanish flu epidemic, and does not analyze reasonableness or foreseeability found in later cases involving commercial contracts.
• In a more recent Illinois Supreme Court case, the court addressed whether a school district would have to honor certain lease obligations where the lease was canceled under the authority of the Downstate School Finance Authority for Elementary Districts Law (“Act”). The school district argued that it was unable to satisfy its obligations under the lease because a third party exercising sole control over the district’s finances canceled the leases under the authority of the Act. After examining the Act, the court rejected the impossibility defense stating “the subject matter of the lease contracts ... have not been destroyed, nor [had the statute authorizing the state body to take over the district’s affairs] rendered performance of the contracts objectively impossible by operation of law.” Innovative Modular Solutions v. Hazel Crest School District, 2012 IL 112052, ¶37.
• As a defense to an employee’s claim that an employer had breached the employee’s severance contract by not paying severance benefits, the employer invoked the impossibility of performance doctrine, arguing that severance benefits were prohibited by the Federal Deposit Insurance Act (“FDIA”). While the trial court had ruled in favor of the employer, the appellate court found that there was a question as to whether the employee fell within an exception to the FDIA because the employer had the ability to seek an exemption from the Act and had failed to do so. See Rosenberger v. United Community Bancshares, Inc., 2017 IL App (1^st) 161102.

Again, while the doctrine of impossibility exists in Illinois, the proponent seeking to excuse complete performance and nullify the contract has a narrow opportunity, and facts matter.

If you have questions about the doctrine of impossibility – whether performance is excused or delayed – contact Thad Felton at taf@greensfelder.com.

Link to COVID-19 Resources page

Nuances of the Doctrine of “Commercial Frustration”

Courts in Illinois strictly interpret contracts, and in the absence of a clear intention to excuse or delay performance, for example as expressed in an unambiguous force majeure clause, Courts will be reluctant to excuse or delay performance due to COVID 19. However, one legal theory that may be available to contracting parties without reference to force majeure is that of “commercial frustration.”

In Illinois, the doctrine of commercial frustration is alive and well. The doctrine of commercial frustration will render a contract unenforceable if a party’s performance under the contract is rendered meaningless due to an unforeseen change in circumstances. Put another way, the doctrine of commercial frustration excuses performance only when the parties’ overall contractual intent and objectives have been completely thwarted by an unforeseen event. However, Courts do not apply the doctrine of commercial frustration liberally and a party seeking to excuse performance has a high hurdle to overcome.

Satisfying the two-part test

In Illinois, in order to apply the doctrine of commercial frustration, there must be a frustrating event that was not reasonably foreseeable and the value of the parties’ performance must be totally, or almost completely, destroyed by the frustrating event. Specifically, the party seeking to excuse performance under the doctrine of commercial frustration must satisfy the following, “rigorous,” two-part test.

• First, the event that has caused the commercial frustration must not have been reasonably foreseeable.
• Second, the value of the parties’ performance must be totally, or nearly totally, destroyed by the frustrating cause.

According to the Illinois Supreme Court, commercial frustration applies only to:

“cases where the cessation or nonexistence of some particular condition or state of things has rendered performance impossible and the object of the contract frustrated. It rests on the view that where from the nature of the contract and the surrounding circumstances the parties when entering into the contract must have known that it could not be performed unless some particular condition or state of things would continue to exist, the parties must be deemed, when entering into the contract, to have made their bargain on the footing that such particular condition or state of things would continue to exist, and the contract therefore must be construed as subject to an implied condition that the parties shall be excused in case performance becomes impossible from such condition or state of things ceasing to exist.”

See Leonard v. Autocare Sales & Service Co., 392 Ill. 182 (1946).

Examples of note

The doctrine of commercial frustration has been invoked in various breach of contract claims. Some examples are set forth below:

• Doctrine of commercial frustration found to apply where lessee entered into a lease for an adjacent property to expand its store and the main store was subsequently destroyed by fire. Court upheld lessee’s defense of commercial frustration finding that: (1) while it might be foreseeable that the main store would be destroyed by fire and the leased premises would remain intact, it was a remote contingency to provide for it in the lease and was not reasonably foreseeable; and (2) although it would not be physically impossible to operate the store from the leased premises as a separate entity, the evidence revealed that operations would have had to have been changed drastically and that the leased premises was never intended to be autonomous. See Smith v. Roberts, 54 Ill. App. 3d 910 (4^th Dist. 1977).
• Doctrine of commercial frustration found to apply where lessee entered into a lease to operate a movie theater and thereafter the applicable zoning was changed to prohibit the operation of a movie theater at that location. As a result of the zoning change, the lessee was unable to conduct any of its intended business. See Scottsdale Limited Partnership v. Plitt Theatres, Inc., 97-C-8484, 1999 WL 281085 (N.D. Ill. March 31, 1999).

• Doctrine of commercial frustration found not to apply to lessee where federal government appropriated leased premises for a portion of the lease term for war purposes. The court found that since the subject matter of the lease, i.e., the property, had not been destroyed and was still in existence, the federal government’s appropriation merely carved out a short term occupancy and did not destroy the lessee’s lease-hold estate. See Leonard v. Autocare Sales & Service Co., 392 Ill. 182 (1946).

• Doctrine of commercial frustration found not to apply to a natural gas utility that sought to excuse performance under a naphtha supply contract where demand for utilities’ services was decreasing and the price of naphtha was increasing because of federal decontrol of natural gas supplies and increase in crude oil prices which increased the price of naphtha. The court found that “the only certainty of the market is that prices will change” and that the frustrating events were to a large extent foreseeable. See Northern Illinois Gas Company v. Energy Cooperative, Inc., 122 Ill. App. 3d 940 (3d Dist. 1984).

Next steps

Again, courts refuse to apply the doctrine of commercial frustration liberally, and parties seeking to excuse performance because of COVID-19 should carefully review the contract and analyze clauses, such as the force majeure clause, if any, in order to determine if the contract addresses the COVID-19 pandemic.

And, of course, facts are critical. Be prepared to address the following issues:

• Is there evidence that supports the application of the doctrine of commercial frustration?
• What was the purpose of the contract?
• Was COVID-19 reasonably foreseeable?
• And, has the purpose of the contract been destroyed as a result of COVID-19?

If you have any questions about an existing or future contract, please  contact Thad Felton or visit Greensfelder’s COVID-19 resources page at https://www.greensfelder.com/covid-19-resources.html.

A version of this article was also published in the April 2020 edition of the Illinois State Bar Association Real Property newsletter. Read it here.

What if an employee presents with symptom of COVID-19? Can we require the employee to leave work and stay home?

Yes. If an employee presents at work with symptoms generally associated with COVID-19, e.g., a fever or difficulty in breathing, especially after being in a high-risk location, the employer may send the employee home, and require that the employee remain at home to protect the other employees in the workplace from being infected, for the recommended 14-day quarantine period. The legitimate business reason for doing so is the Americans with Disabilities Act’s (“ADA”) direct threat defense, specifically, that the employee’s presence would be a “direct threat” to the health or safety of the employee or others that cannot be reduced or eliminated by reasonable accommodation.

While an employee may allege that he or she is being “regarded” as disabled under the ADA, or that he or she is being singled out based on his or her particular race, the direct threat defense under the ADA should protect employers that apply this policy uniformly and in a non-discriminatory manner.

Additionally, the Center for Disease Control (“CDC”) recommends that employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of fever (100.4° F/37.8° C or greater using an oral thermometer), signs of a fever, and any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom-altering medicines (e.g., cough suppressants).

Further, the Occupational Health and Safety Act (“OSHA”) has recently set forth the following guidance advising the following in cases of suspected employee exposure to COVID-19:

• Employees who appear to have acute respiratory illness symptoms (e. cough, shortness of breath) upon arrival to work or become sick during the day should be separated from other employees and be sent home immediately.
• Take steps to limit the spread of the potentially infectious individual’s respiratory secretions, including by providing a face mask.
• In health care and other situations where non-employees may be suspected of having the COVID-19, isolate those individuals from those with confirmed cases of the virus to prevent further transmission.
• Restrict the number of personnel entering isolation areas, including the room of a patient with suspected/confirmed COVID-19.
• Protect employees who must work in close contact with an actual or suspected infected person by using additional engineering and administrative controls, safe work practices and personal protective equipment.

What if an employee voluntarily discloses that he or she has tested positive for COVID-19 while having been in the workplace and working closely with others?

The answer is largely the same as above: The employee should immediately be sent home and required to stay home. Note, an employee who has been diagnosed with COVID-19 would qualify for leave under the Family and Medical Leave Act (“FMLA”) as such an infection would constitute a serious health condition under FMLA. Under the Occupational Safety and Health Administration (“OSHA”), all employers are required to provide a safe and health workplace, and under the ADA’s direct threat defense, that employee poses a direct threat to the health and safety of others in the workplace. Employers also should request that the infected employee identify all co-workers with whom he or she has come in close contact in the workplace in the past 14 days, and since the positive test. The employer should inform those employees that they may have been exposed to COVID-19 and send them home to seek treatment from their health care providers to ensure they have not contracted COVID-19. It is important for employers to remember their obligation to not violate confidentiality laws by disclosing the name of the infected employee to others.

Can employers require employees whom they suspect have been exposed to or contracted COVID-19 to be tested as a condition of returning to work?

Yes, under the ADA’s direct threat defense, and its obligation under OSHA, employers may require such employees to undergo job-related fitness for duty exams prior to returning to work, which includes confirmation by the employee’s health care provider of a negative test result. Note, however, that the CDC recommends that employers should not require a health care provider’s note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as health care provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way. This is mere guidance, however. As with all such COVID-19 employment-related matters, employers should consult with their employment attorney for discussing best practices in addressing individual situations.

Is an employer required to pay wages to its non-exempt employees and/or the salary to its exempt employees whom it is prohibiting from returning to work based on its reasonable belief that the employee may have been exposed to, or has contracted COVID-19?

The answer is largely dependent on the employer’s specific policies and the employee’s specific classification under the Fair Labor Standards Act (“FLSA”). Exempt employees must be paid their full salary for any workweek in which they perform more than a de minimus amount of work. That payment may consist of the required use of accrued paid time off, unless such required use is inconsistent with the employer’s paid time off policy. Once the accrued paid time off is exhausted, the employer may not deduct from an exempt employee’s salary unless the employee performs no services for the entire workweek. Non-exempt employees are only entitled to be paid for any hours worked; again, absent an employer’s paid time off policy and/or state or local law providing otherwise (e.g. paid sick leave, PTO or vacation).

Note, that on March 14, 2020, the U.S. House of Representatives passed COVID-19 designed to provide paid leave to employees during the outbreak. Labeled the Families First Coronavirus Response Act, if passed by the U.S. Senate and signed by President Trump, the legislation would require employers with fewer than 500 employees to provide American workers with up to 12 weeks of FMLA leave and two weeks of paid sick leave for certain reasons related to COVID-19. We have drafted a comprehensive summary of this legislation, which can be accessed here.

If we choose not to pay, for example, non-exempt employees whom we are requiring to work from home or self-quarantine, will they be eligible for unemployment insurance benefits?

Likely yes, but it largely depends on your state’s unemployment guidelines. Generally, unemployment insurance benefits provide temporary financial assistance to employees unemployed through no fault of their own that meet their state’s eligibility requirements. Additionally, employees generally must be able to and available for work each week that they are collecting benefits. In mandated all personnel “work from home” or required self-quarantine scenarios, employees who are not otherwise incapacitated and unable to work, likely will meet the above eligibility requirements. In Illinois, Gov. J.B. Pritzker recently announced that emergency rules will be issued clarifying that under the Illinois Unemployment Insurance Act, an employee who is unemployed for reasons related to COVID-19, and through no fault of their own (i.e. mandated work from home policies), will be eligible for unemployment benefits.

Should employers institute a temporary remote work/telecommuter policy for their entire workforce?

This answer is largely dependent on several individual factors relating solely to your company (e.g., industry, work force, area where workers reside, etc.). We have seen an increase in employers implementing such policies, however. For certain businesses and industries, telecommuting may be a good strategy for mitigating the illness through contact at work. Even if an employer does not does not implement a temporary work from home policy, employers should be prepared for an increase in inquiries about telecommuting from employees who prefer not to report for work (see guidance below on this specific issue). If an employee asks to work from home because of a medical condition that places him or her at higher risk for infection, an employer may be obligated to consider this request as a reasonable accommodation under the ADA or state law. Even where there is no legal obligation to provide accommodations, employers may find that allowing an employee to work from home is preferable to not having the employee work at all. Similarly, employers should examine their short-term disability policies, as they may provide benefits in the event the employee is unable to work.

In designing telecommuting policies and procedures, employers should first identify which jobs can be successfully performed outside of the office. Many jobs simply cannot be performed from home, and not all employers have the technology infrastructure or organization necessary to make working from home a productive option. Where working from home is permitted, employers should establish expectations for employees’ work and communications while they are away from the office. For example, these may include specified working hours, expectations for responding to calls and email, and productivity goals. Employers should also ensure that their employees have a medium available to accurately reflect their hours. In Illinois, for example, employers are required to maintain a record of all hours worked each day and each week for all workers, which as of February 19, 2019, now includes exempt employees.

If an employee refuses to report to work due to fear of contracting COVID-19, and the employer has no objective reason to believe that there is a sufficient basis for such a concern in its workplace, may the employer discipline or terminate the employee for refusing to come into work?

That depends largely on the reasonableness of the employee’s fear of infection in the workplace. Under the Occupational Safety and Health Act (“OSHA”), an employee may refuse to work if the employee believes that he/she is in imminent danger. Section 13(a) of OSHA defines imminent danger as “any conditions or practices in any place of employment which are such that a danger exists which could reasonably be expected to cause death or serious physical harm immediately or before the imminence of such danger can be eliminated through the enforcement procedures otherwise provided by this Act.” This means that the employee must believe that death or serious physical harm could occur within a short time, for example before OSHA could investigate the problem. For a health hazard, such as COVID-19, to constitute an imminent danger under OHSA, there must be a “reasonable expectation that toxic substances or other health hazards are present and exposure to them will shorten life or cause substantial reduction in physical or mental efficiency.”

So, if an employee reasonably believes that there is a real danger of being infected with COVID-19 by coming to work, because of a confirmed and/or suspected case of COVID-19 in the workplace, it is likely that the employee would qualify for protection under OHSA from discipline or discharge. Satisfying this standard, however, would not entitle the employee to be paid for the time missed from work. Furthermore, even if the risk is not sufficient to trigger OSHA protections, if the employee’s level of fear, whether rational or not, results in or is a function of an anxiety disorder or a serious health condition for FMLA purposes, the employee may be entitled to time off as a reasonable accommodation for a disability under the ADA or as a protected leave of absence under the FMLA. Note too that Section 7 of the National Labor Relations Act protects employees (even in non-union settings) who engage in “protected concerted activity for mutual aid and protection.” A group of employees (or even one, on behalf of all others) who refuse to work based on their reasonable fear of being infected with COVID-19, likely will be protected from discipline or discharge for their attempt to improve the conditions of their employment.

What if local schools or day care centers have temporarily closed because of COVID-19, and an employee requests to take leave to stay home with his/her children during this time? Are employers obligated to provide this leave?

If the U.S. Senate approves the Families First Coronavirus Response Act, employers with fewer than 500 employees (as written now) would be required to permit eligible employees to take an FMLA leave of absence to care for their child (even if the child does not have a serious health condition), if the child’s school or place of care has been closed, or the children’s provider is unavailable due to a coronavirus. (See comprehensive summary of the Families First Coronavirus Response Act here).

State laws may impose different requirements. For example, California requires most employers to provide unpaid leave to parents, guardians, grandparents, stepparents, foster parents or persons standing in loco parentis to a child for child care during unexpected school closures. Similarly, New York City mandates that employers provide employees with leave necessitated by the “employee’s need to care for a child whose school or childcare provider has been closed by order of a public official due to a public health emergency.”

Can employers discipline or terminate employees (or a single employee, speaking on behalf of others) who are using social media to identify their employer and complain that the employer is not protecting them or the workplace from COVID-19?

Generally, no, as the employee(s) complaints regarding working conditions likely constitute protected speech/concerted activity under Section 7 of the NLRA. Instead, employer should speak directly to the employee(s) regarding their concerns and try to address each individual concern, without taking retaliation action.

What if an employer temporarily shuts down a work location to protect its employees from COVID-19? Do we have to provide advance notice of the shut down, and if so, how much notice do we need to give our employees?

Yes, you likely do because temporary shutdowns of a facility may implicate federal and state “WARN” laws. Under the federal Worker Adjustment Retraining Notification Act (the “WARN Act”), employers with 100 or more employees are required to provide 60 days’ advance notice of a temporary shutdown if the shutdown will (i) affect 50 or more employees at a single site of employment and (ii) result in at least a 50 percent reduction in hours of work of individual employees during the month of the shutdown. However, 60 days’ notice is not required if the shutdown is a result of a “natural disaster” or “unforeseeable business circumstances.” Although the WARN Act does not specifically address whether a pandemic or potential pandemic qualifies as a natural disaster or unforeseeable business circumstance, the key factor for both is that the event was sudden, dramatic and not foreseeable within the required notice period. Employers should note that, even if these exceptions apply to the COVID-19 outbreak, the employer is still required to give as much advance notice as is practicable. Therefore, employers should be prepared to communicate to their employees that a temporary shutdown will occur as soon as the final decision has been made, even if the shutdown will not take effect for several days.

Additionally, many states including Illinois have “mini-WARN” laws that cover smaller employers or require notice for less significant shutdowns. For example, under the Illinois WARN Act, private sector employers that have (i) 75 or more full-time employees located in Illinois, excluding part-time employees; or (ii) 75 or more employees who work a total of 4,000 hours per week (exclusive of overtime hours), must provide 60 days’ advance notice in the case of a “mass layoff” or a “plant closing.” Under Illinois’ WARN Act, a “mass layoff” is defined as “a reduction in force which: (1) is not the result of a plant closing; and (2) results in an employment loss at the single site of employment during any 30-day period for: (A) at least 33 percent of the employees (excluding any part-time employees) and at least 25 employees (excluding any part-time employees); or (B) at least 250 employees (excluding any part-time employees.” And, under Illinois’ WARN Act, a “plant closing” is defined as “the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.” The 60 days’ notice exception under the federal WARN Act also is available to Illinois employers if the shutdown is a result of a “natural disaster” or “unforeseeable business circumstances.”

If an employer has a unionized workforce, is it required to bargain with the union over changes to unionized employees’ schedules or other changes to their terms and conditions of employment in response to COVID-19?

Under the NLRA, unionized employers may have a duty to bargain over new policies developed in response to COVID-19. For example, if employers develop a pay policy addressing whether and/or how to pay employees whom the employer has requested to work from home temporarily, or have been self-quarantined because of a positive test or are experiencing symptoms of COVID-19, that policy would likely be considered a mandatory subject of bargaining for which the employer would need to bargain over with the union. However, whether there is such a duty really depends on the language and specific provisions in the collective bargaining agreement, including but not limited to the management rights provision, leaves of absence, paid time off, and health and safety.

Can employers prohibit international or domestic travel to high risk locations?

So long as the travel is for business-related reasons, yes. If for personal reasons, then likely not, or face a potential national origin discrimination claim if the personal travel is to the employee’s home country. However, upon the employee’s return, particularly if the travel was to a high-risk location, and/or on the CDC’s restricted travel list, the employer should require the employee to stay home for the 14-day quarantine period and require a fitness for duty exam to return to work if the employee experiences any symptoms of COVID-19, has self-disclosed that while traveling he or she has come in close contact with another person who has tested positive for COVID-19, or the employee discloses that he or she has tested positive for COVID-19.

What if an employee returns from a domestic or international trip that is not on the CDC restricted travel list, can employers mandate a temporary self-quarantine?

You could, but you shouldn’t. Remember, decisions should be based on rational, objective evidence, and should not be impulsive or based on emotion or paranoia. Unless the employee, for example, is experiencing symptoms of COVID-19, has self-disclosed that while traveling he or she has come in close contact with another person who has tested positive for COVID-19, or the employee discloses that he or she has tested positive, there is no reasonable belief that the employee poses a direct threat to the health or safety of the workplace that cannot be eliminated or reduced by a reasonable accommodation.

As with any and all COVID-19 employment-related matters, employers should consult with their employment attorneys for discussing best practices in addressing individual situations.

Our Employment & Labor Practice Group is continuing to monitor these developments and is available to answer your coronavirus questions.

Link to COVID-19 Resources page

Read the full article here.

Before developing a new gadget or agreeing to distribute or sell a new toy, businesses must understand whether their product is subject to mandatory product specifications, testing regimes, or certifications. And when a company gets word that a product in development or in commerce has a potential product safety issue, the business needs to know what rules apply. The CPSC’s new tool, Regulatory Robot 2.0, is a good starting point, but businesses should still seek the advice of product safety counsel to understand how to apply the rules to a given product, to fully appreciate the business risks associated with making, distributing and selling consumer products, and to develop pro-active product safety programs and recall plans.

Regulatory Robot 2.0 is an online form available at https://business.cpsc.gov/robot/ that produces a list of potentially applicable federal product safety requirements based on information entered by the business about a product. For example, the report may inform the business of the following: whether the product requires third-party testing; whether the product must meet certain size thresholds (e.g., small-part regulations for children’s toys); whether the product is subject to lead-content requirements; whether certificates of conformity or particular labeling are required; or if the product is subject to dozens of other federal requirements. The report can be printed as a PDF once prepared. According to the CPSC, the information entered and the report produced will not be maintained by the CPSC.

Businesses considering using Regulatory Robot 2.0 should keep a few things in mind:

1. The utility of the report is necessarily limited by the user’s ability to interpret and apply the legal regulations to a given product.
2. CPSC regulations, guidance and applicable case law change from time to time, so the results may not reflect the most current law.
3. The CPSC report does not constitute an opinion from a regulatory agency and cannot be cited as a defense if a company fails to comply with federal product-safety rules.

Also, manufacturers, importers, distributors and retailers are required to immediately report to the CPSC if a product has a defect that could create a substantial risk of injury to consumers or otherwise creates an unreasonable risk of serious injury or death. This requirement applies even if the product in question is not subject to a specific product safety rule, regulation, standard or ban. Finally, while the report may identify what rules apply, it may not indicate who within the product supply chain is responsible, under the law, for ensuring compliance.

Businesses should consider product safety issues early during product development, distribution or sale; the Regulatory Robot is a good starting point. That early investment in time and research, guided by the advice of product safety counsel, can head off expensive remediation (including a public recall) before it is even necessary and will pay off if the company learns of a product-safety issue after sales have begun.

Greensfelder attorneys have experience advising companies on compliance with CPSC regulations for products, developing product-safety programs and recall plans, investigating whether reports to the CPSC are necessary, and conducting voluntary product recalls in cooperation with the CPSC.

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To add posts, user accounts, or make other changes to your site, log in at your site address plus /wp-admin/. If you have not logged in to the LexBlog Platform before, you may need to reset your password.

This is a callout example: We have several help articles for new bloggers or site administrators. View the Getting Started articles and other topics in our Support Center.

If you need help, you can submit a new support request.

A good quote grabbs attention like: Blogs that fail tend to deliver “content” without any emotion.

— Kevin O’Keefe

LexBlog support is available Monday through Friday, 8 a.m. to 5 p.m. PT. Our incident response team monitors the platform 24/7 to ensure your site is online. You can subscribe to platform status updates at status.lexblog.com.

New to our Network and an example of a list

• Drug & Device Law
• Estrella & Tupete Blog
• Tax Law Tx Blog
• eDiscovery Watch
• A Better You, A Better Firm

We have several resources available to help you during the launch process. Our Support Center covers topics ranging from email notifications to user management. When you log in to your site, the Support widget will suggest help articles based on your current page in the site admin area. Depending on your site’s plan, you can open a live chat session or call us at 1-800-913-0988. You can submit a support request. You can also respond to and manage all of your requests in your site’s admin area.

Your goals should be specific, measurable, realistic, and time-based.

• Specific: Avoid fuzzy, unclear words like “Improve my online performance.”
• Measurable: Numbers and data give you a clear metric for your goals.
• Realistic: While your goals should motivate you, an unattainable goal can weigh you down when you don’t reach it.
• Time-based: Give yourself a deadline. Again, this goal should motivate you, not weigh you down.

Your blogging goals should focus on creating meaningful, quality connections. Set goals like these:

• Publish a post per week for a quarter.
• Add a comment to someone else’s blog posts twice a month.
• Speak to two influencers at an upcoming conference.

You should revisit your goals once a quarter or once a year. You should adjust your goals based on your progress. If you are having trouble meeting your goals, don’t be afraid to change them to something you can achieve.

The marketing folks at Principal Park, home of the Triple A Des Moines Cubs, call to tell you that you’ll have free use of a luxury box for five of next year’s ball games. Better yet, they tell you they’ll arrange for the food and drink and invite a who’s who in networking for a Des Moines estate lawyer.

Twenty attendees for each game will include wealthy people in the Des Moines area who are looking for an estate planning lawyer, some of your best estate planning clients, leading financial planners from Des Moines, the reporter from the Des Moines Register who does stories on financial planning and business matters, editors and reporters from the Des Moines Business Record, financial reporters from the Chicago Tribune, New York Times, and Wall Street Journal.

Des Moines business leaders such as the president of the local Chamber of Commerce, influential Des Moines bloggers who have a wide and diverse audience, influential estate planning lawyers who are blogging from other areas of the country, leading lawyers from Des Moines who don’t do estate planning work and don’t have partners who do so either, influential business and financial bloggers from around Iowa.

Would you go? Darn right you’d go.

Would you wear ear plugs so you couldn’t hear anyone? Heck no.

But that’s exactly what most lawyers do when they blog. Rather than listening to their target audience, lawyers shout information, updates, and news without listening to a word being said by the folks they ought to be networking with. All in an effort to showcase their intellect and build their personal brand.

Engaging people so as to network and build relationships requires listening. In your Principal Park luxury box, discussion is more likely to be about financial planning and related matters than the weather.

All you need to do is stand next to people, listen to what’s being discussed, and add value to the conversation. That’s easy, just offer insight and commentary on things you’re passionate about—financial planning and preserving family wealth. Introduce yourself to people as you do so.

By discussing matters of common interest, you’ll meet people and build relationships. In a room of twenty people with like interests, you’re bound to walk away with upcoming one-on-one meetings, coffees, or lunches with two or three folks.

Listening on the Internet means using a RSS newsreader. Sure, you can listen to questions and concerns of clients and prospective clients directly. But how are you going to hear what influencers are saying without getting RSS feeds from news websites (newspapers, journals, and trade publications), blogs, and keyword/key phrase searches from Google News?

What feeds would I subscribe to as a Des Moines estate planning lawyer?

Select RSS feeds from the Des Moines Register—especially the feed to the Register’s Finance Blog.

Select RSS feeds from the Des Moines Business Record—especially the Finance and Insurance story feeds.

RSS feeds from leading estate planning blogs from around the country, whether published by lawyers or financial advisors.

Des Moines blogs reporting on local issues which have a good number of subscribers. They abound in cities today and serve as beat reporters on local news, and, in many cases, have more loyal readership than the major newspaper.

RSS feeds of searches of relevant keyword and keyword phrases in Google News. (Financial/estate planning terms of art, types of trusts, code sections, etc.) I’d also subscribe to my name and the URL of my blog so I could hear when people had cited me or something I wrote on my blog.

RSS feeds from leading Iowa law and business blogs.

I’m sure I’m missing a few, but you get the idea. Listen to what’s being discussed by leaders and influencers. Offer your insight and commentary by referencing in your blog what you’re reading elsewhere.

Blogging will then take on the feel of conversation for you. That’s what true blogging is—a conversation.

A conversation which leads to relationships. Relationships which lead to referrals and a word-of-mouth reputation.

But just as conversations in the Principal Park luxury box require listening, conversations online (blogging) require listening first.

Ask yourself this when you decide you want to start blogging: Who am I blogging for? If your answer is everyone, you are not going to be happy. Nor is anything you are about to read going to help you.

When you are right, you are looking for an audience. I want you to go online and find a person that embodies that audience for you. This should be a person, not a brand or a company. At the end of this little exercise, you should have just one name.

Now go online and learn more about that person. Look for the following things: Are they reachable online? Do they write online? Do they use social media? Do they follow other people?

If the answer to the majority of the above questions is no, forget that person for now and find another person until the majority of these criteria are going to be met.

This person should be your goal.

You will follow them, connect with them and ultimately get them to follow you. If you fail on that front, don’t worry, what you pick up in the meantime in terms of knowledge and other people to connect with, will make it worthwhile.

So what do you need to get started? The person from above, an email account, an RSS reader like Feedly, a Twitter account, a Facebook account, a LinkedIn account.

Check out where this person writes. Do they have a newsletter you can subscribe to? If so, sign up. If they have RSS on their blog, subscribe to it.

Now head over to social media and follow them on Twitter first. It is the easiest entry point. Do not fill your Twitter account with noise. Try and make it a useful tool. Not a reflection of who you are, but who you would like to become.

After you have checked Twitter, visit Facebook. Some people use their Facebook accounts more casually than others. See what they have publicly available. If it is not much, odds are they are using it for just family and friends. If that is the case, move on for now. You can always revisit them later and reconnect.

Facebook is a powerful tool. People use it differently than both Twitter and LinkedIn, but people are also a lot fussier about their Facebook accounts. So be thoughtful. Don’t rush to friend somewhere there unless they are appear to be very open with their friending policy.

With LinkedIn, connect with them, but make sure you tell them why. You are not using a shotgun approach here. Be thoughtful in a note with your connection request.

Alright now comes the fun part. Start to learn from what you just did. Read their work. See who they share with. Are those also people you would be interested in following? If so, repeat the above process.

Now start liking and sharing their work. Where possible make thoughtful comments.

After establishing a rapport with a person, they will most likely follow you back. If not keep at it and keep looking for people who meet the same criteria of the first person you followed and repeat the process. Eventually your community will begin to grow.

Congratulations! Without even typing a single post, you have taken your first step toward ensuring that when you do start blogging, you will reach the people that matter to you.

As LexBlog’s Kevin O’Keefe explains:

“Blogging is much more than ‘message sending.’ You listen to the conversation that’s already taking place among leaders and the media covering your niche area of expertise. Only after listening can you engage in the discussion by referencing the discussion in your blog posts and commenting at other blogs.”

These links explain what listening means and why it’s an important component of your blogging efforts:

• Listening: First step in blogging by lawyers
• Legal professionals missing most important aspect of social media: Listening
• Is your law blog having an impact? Ask your audience
• Blogging is about listening
• LexBlog webinar: Listening for Blog Authors

These tools can help you listen to your audience and identify authors, articles, and other important conversations in your industry:

• Feedly
• Google Alerts
• Topics on Flipboard
• Twitter lists
• LexBlog.com channels

Most importantly, think about your readers and their needs. Ask questions about who wants to read about the topics you want to cover: What are their professional titles? What do they need to know about these topics? What content are they most likely to share on their social media accounts?

You may want to focus your posts on news and developments affecting specific locations. If a topic doesn’t affect readers in that location, leave it out. Which topics do you know better than anyone else? Is there a topic where you’d like to establish yourself as a subject-matter expert?

Which topics affect your preferred industry? Who are your main competitors? What are they doing? How are you different?

List out the topics you want to cover on your blog. Then group those topics together under four or five larger categories. If a topic doesn’t fit under one of those categories, leave it out. Blogs that cover too many topics will quickly lose focus.

These blogs focus on specific industries or geographic areas: Broadcast Law Blog, Legal Flight Deck, Money Laundering Watch, Fracking Insider, Tobacco Law Blog, Minnesota Family Law Blog.