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SHRM Newsletter: Legislative Update
Posted on Mar. 11, 2016

This is Utah SHRM Legal-mail no. 2016-5 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM).

CONTENTS:

-  UTAH LEGISLATIVE UPDATE

-  PREGNANCY AND BREASTFEEDING BILL PASSES

-  JOINT EMPLOYER BILL PASSES

-  REVISED NONCOMPETE BILL PASSES

-  EMPLOYEE COMPUTER ABUSE BILL PASSES

-  BILLS THAT DID NOT PASS

-  MEDICAL MARIJUANA BILLS

UTAH LEGISLATIVE UPDATE: The Utah Legislature opened its annual session on Monday, January 25, 2016 and adjourned just last night, March 10, 2016. During the seven or so weeks it was in session, the Utah Legislature passed a number of bills that will directly impact employers, including important new statutes regarding nondiscrimination issues and noncompetition agreements. These bills are outlined below. All such bills still must be approved (or vetoed) by Utah Governor Gary Herbert. You can see all the bills that the 2016 Legislature passed here: http://le.utah.gov/asp/passedbills/passedbills.asp.

PREGNANCY AND BREASTFEEDING BILL PASSES: The Legislature passed SB 59, amending the Utah Antidiscrimination Act to require an employer not discriminate and also provide reasonable accommodations for an employee who has known limitations related to “pregnancy, childbirth, breastfeeding, or related conditions.” You can read a copy of the bill here: http://le.utah.gov/~2016/bills/static/SB0059.html. The new law requires an employer to provide reasonable accommodation if the employee requests it, unless it is an undue hardship. An employer also cannot require an employee to terminate employment due to such conditions if, without hardship, another reasonable accommodation can be provided for the employee. The law provides this definition of undue hardship: “an action that requires significant difficulty or expense when considered in relation to factors such as the size of the entity, the entity's financial resources, and the nature and structure of the entity's operation.” An employer can require certification from a health care provider of the need for such accommodations, including dates needed, duration and explanation of need. However, an employer may not require a certification for an employee who needs only more frequent restroom, food, or water breaks. An employer is not required under the new law to permit an employee involved in breastfeeding to have the employee's child at the workplace. An employer must include in an employee handbook, or post in a conspicuous place in the employer's place of business, written notice concerning an employee's rights to all these reasonable accommodations. Finally, while the law already required that a public employer provide access to a “clean and well-maintained refrigerator or freezer” for temporary storage of breast milk by an employee, under this new law a public employer with an employee not working in an office building may, alternatively, provide a nonelectric insulated container.

JOINT EMPLOYER BILL PASSES: HB 116 also was approved by the Legislature. This bill amends various Utah statutes to provide that a franchisor will not be deemed to be the employer of a franchisee’s employees. The bill also precludes the State of Utah from relying on federal administrative rulings when determining if two companies are joint employers “unless that administrative ruling is determined to be generally applicable by a court of law, or adopted by statute or rule.” Federal administrative rules have been interpreted recently to broadly allow joint employer relationships to be found to exist. The bill would impact Utah statutes like those dealing with: (1) payment of wages; (2) professional employer organizations; (3) antidiscrimination; (4) health and safety; and (5) unemployment compensation. You can read a copy of the bill here: http://le.utah.gov/~2016/bills/static/HB0116.html.

REVISED NONCOMPETE BILL PASSES: A bill impacting employment noncompete agreements (HB 251) also was passed, but not before it was significantly changed. The Legislature’s website shows that the bill evolved over ten different substitute versions. Originally, the bill effectively banned noncompetes altogether. After input from the business community, the bill was significantly modified to basically incorporate the Utah case law requirements for an enforceable noncompete agreement. The version of the bill that passed changed again, however, and the only limit it now expressly places on noncompetes is that such agreements entered into after May 10, 2016 can last no longer than one year. The bill also continues to incorporate by general reference the longstanding Utah case law requirements. The bill does not include or apply to the following types of agreements that may include a noncompete: nonsolicitation agreements, nondisclosure or confidentiality agreements, termination severance agreements or post-employment contracts to sell a business. An earlier version of the bill had said that continued employment was not adequate consideration for a noncompete, but that provision was deleted before the final bill passed. Finally, for employers with twenty or more employees, the bill provides that if an employer seeks to enforce a noncompete through litigation (in court or arbitration), and the agreement is found to be unenforceable, the employer must pay the employee’s litigation attorney’s fees and costs. You can read a copy of the bill here: http://le.utah.gov/~2016/bills/static/HB0251.html. Here is a link to an interesting Deseret News article about the bill: http://www.deseretnews.com/article/865649717/Utah-lawmakers-pass-controversial-bill-on-noncompete-contracts.html. Here is a Salt Lake Tribune article about the bill: http://www.sltrib.com/home/3641037-155/senate-approves-watered-down-bill-on-non-compete.

EMPLOYEE COMPUTER ABUSE BILL PASSES: The Legislature also passed HB 241, which allows for a lawsuit and recovery of damages against an individual (including an employee or former employee) who, damages or without authorization obtains information from a “protected computer,” which by definition essentially includes a secured or password-protected computer used in the operation of a business or governmental entity. Under the law, employees of a business are deemed to be authorized users, but only to the extent actually authorized by the business and such authorization lapses upon termination of employment.  You can read a copy of the bill here: http://le.utah.gov/~2016/bills/static/HB0241.html.

BILLS THAT DID NOT PASS: A proposal (HB 188) before the Utah Legislature that would have require state executive agency employers to provide paid parental leave did not pass. You can read a copy of the bill here: http://le.utah.gov/~2016/bills/static/HB0188.html. Another failed bill (HB 173) would have allowed public employers to adopt a uniform policy declining to deduct union dues from employee wages. You can read a copy of the bill here: http://le.utah.gov/~2016/bills/static/HB0173.html. Finally, another unsuccessful proposal (HB 88) would have significantly limited an employer’s ability to use noncompete agreements. The bill required new consideration (other than continued employment) for noncompetes. It also prohibited an employer from enforcing non-compete against employees fired without cause within one year of the date of agreement. You can read a copy of HB 88 here: http://le.utah.gov/~2016/bills/static/HB0088.html. Another bill that did not pass is SB 214, which would have prohibited an employer from retaliating or taking adverse action against an employee if the employee reports “abusive conduct.” You can read that bill here: http://le.utah.gov/~2016/bills/static/SB0214.html

MEDICAL MARIJUANA BILLS: There were two major medical cannabis/marijuana bills considered in the Legislature in 2016. One bill (SB 89) almost passed, but it failed on the final day of the session due to funding issues. It did not expressly mention or impact employers. Another bill (SB 73), which at one point would have prohibited employment discrimination by public employers against employees who used medical marijuana also did not pass. You can read SB 89 here: http://le.utah.gov/~2016/bills/static/SB0089.html. You can read SB 73 here: http://le.utah.gov/~2016/bills/static/SB0073.html. The bottom line is that, for now, use of marijuana remains illegal under both state and federal law.

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mikeAttorney Michael
Patrick O'Brien

Mike O’Brien is an experienced and accomplished employment attorney, media lawyer and courtroom litigator.  He is active in SHRM and has received the highest possible reviews from rating services like Martindale - Hubbell (AV rating), Chambers USA, Utah Business Legal Elite, Best Lawyers in America, Who’s Who Legal USA, and SuperLawyers.  HR Executive Online has named him as one of America’s most powerful 100 employment lawyers, but keep in mind, this does not mean he is good at moving heavy furniture.

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Michael Patrick O'Brien
 

Best Lawyers In America, “Salt Lake City Best Lawyers Employment Law Lawyer Of The Year,” 2011-2012

Best Lawyers In America, First Amendment Law, Labor And Employment Law, 2005-2012

Chambers USA, Labor & Employment, 2003-2011

Employment Lawyer Of The Year, Utah State Bar, 2001

Human Resources Executive, Nation’s Most Powerful Employment Lawyers In America, 2010

Mountain States Super Lawyers, 2007-2012

Utah Business Magazine, Legal Elite, Labor And Employment, 2006-2012