A Legislative Update – Several Bills Bear Watching by Business Owners, Managers

There are a number of bills currently under consideration within the Massachusetts Legislature that impact business owners and managers and how they run their operations. What follows is a quick look at several measures that bear watching.

Among the bills filed in the Massachusetts Legislature at the start of its current two-year session was one already familiar to employers, namely the Act to Protect Trade Secrets and Eliminate Non-Compete Agreements. As its title suggests, this refiled measure (originally championed by former Gov. Deval Patrick) would render null and void non-compete agreements between employers and employees.

In Massachusetts, non-competes are already unenforceable in a range of professions and occupations. In 1977, the Legislature made non-competes unenforceable against physicians; in 1983, it added nurses; in 1998, the broadcast industry; in 2004, psychologists; and most recently, in 2008, social workers.

Lawyers are barred from entering into non-competition agreements under the Rules of Professional Conduct. Similarly, internal rules and regulations prohibit them in the financial-services industry. This bill would ban them across the board.

Another re-filed bill of interest to employers is the Pregnant Workers Fairness Act, and this one seems to be garnering widespread support. After the end of the last session, advocates reached agreement with some employers’ organizations, which suggests that, this time around, the bill will make it over the finish line.

If enacted, the measure would require employers to accommodate pregnancy and baby-related requests for longer breaks, private non-bathroom space to express milk, modified schedules, and time off to recover from childbirth. It is important to note that the time off would be in addition to leave already available under other applicable laws.

On the subject of time off, H. 3155 would re-write significant pieces of the Earned Sick Time Law, which the voters approved in 2014. As well as providing that overtime should not count toward sick-time accumulation and clarifying those workers who should not be included in calculating the total number of employees (e.g. the CEO, CFO, COO, independent contractors, and employees working fewer than 20 hours per week), the bill includes a novel fact-finding provision.

Because of the effect of sick time on the bottom line, the bill would require the secretary of Labor and Workforce Development to conduct an annual survey asking employers whether the law has led them to change staffing levels, or to move their operations out of state. The bill does not say what the secretary should do with the survey results. But knowledge is power, as the saying goes.

Credit-report Ban

Some knowledge gives too much power, apparently, so efforts are under way to put it behind a statutory veil. Many employers use credit reports to help gauge a job applicant’s reliability and trustworthiness. This is perfectly legal under the federal Fair Credit Reporting Act (for now, at least), so long as the employer obtains the applicant’s permission.

But Massachusetts might be poised to join the 11 or so states that ban the practice of looking at credit reports, which advocates refer to as ‘credit discrimination’ because of its alleged disparate impact on people of color. U.S. Sens. Elizabeth Warren and Ed Markey are pushing for a nationwide ban via their bill called the Equal Employment for All Act. In the meantime, a state-level measure sponsored by State Rep. Elizabeth Malia would prohibit Massachusetts employers from using credit reports in their hiring decisions and even from asking applicants for permission to do so.

Although it would exempt certain categories of jobs from the ban (e.g. law enforcement, executive/managerial positions in financial institutions, and positions requiring national-security clearance), the proposal would strip most employers of the ability to lawfully review a would-be employee’s credit report. Violating the statute would constitute an unfair practice under Chapter 93A, the Consumer Protection Act, which generally does not apply to employment disputes, and thereby allow plaintiffs to seek multiple damages and attorney’s fees.

At the federal level, the Equal Employment Opportunity Commission (EEOC) has issued guidelines stating that sex-based harassment includes harassment based on “transgender status” and the “intent to transition.” Examples of such harassment include “using a name or pronoun inconsistent with the individual’s gender identity in a persistent and offensive manner.”

The new guidelines purport to apply Title VII of the Civil Rights Act of 1964, which prohibits sex discrimination in employment and contains this definition:

“The terms ‘because of sex’ or ‘on the basis of sex’ include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and nothing in section 2000e-2(h) of this title shall be interpreted to permit otherwise.”

This definition does not, on the face of it, include transgender status, and the equivalent provision in Title IX (regarding education) is the subject of ongoing litigation. Nevertheless, the EEOC has made gender-identity enforcement a priority in its Strategic Enforcement Plan for 2017-21.

The federal guidelines and enforcement plans will not change customs and practices for employers in Massachusetts, where — long before Gov. Baker signed the 2016 Act Relative to Transgender Discrimination — the MCAD had treated discrimination on the basis of transgender status as a violation of Chapter 151B, the Commonwealth’s anti-discrimination statute.

For example, in 2016, the MCAD issued its decision in Tinker v. Securitas Security Services USA and Najeeb Hussain. In October 2009, the complainant, at that point Rebecca (Becky) Tinker, started work as a part-time security officer reporting to Najeeb Hussain. About two years later, during Tinker’s gender transition, Tinker informed Hussain that he wished to be known as Alyx and that Hussain should refer to him with male pronouns. Hussain seems to have not complied.

The MCAD found that Hussain continued to refer to Tinker as Becky and with female pronouns, and to include Tinker in statements that he directed to female employees, e.g. “you girls.” Hussain also informed Tinker of the Koran’s pronouncements regarding homosexuality. Including annual statutory interest of 12{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} interest, the total award for emotional distress came to approximately $86,000