Host of New Employee Protection Laws Now in Effect

A combination of new laws enacted during last winter’s General Assembly session and a recent U.S. Supreme Court decision have suddenly expanded employer responsibilities and exposure to liability.

Laws passed by Virginia’s legislature typically go into effect July 1 of each year.  This year, the Assembly enacted new employment protections for LGBTQ workers, bringing discrimination on the basis of sexual orientation or gender identity within the scope of previously enacted laws.  And just before that change went into effect, the nation’s highest court announced that it considered the 1964 Civil Rights Act’s prohibitions against discrimination based on sex to extend to sexual orientation and gender identity, despite the lack of congressional action to amend the 56-year-old law – indeed, despite the repeated failure of bills to this effect in Congress over the years.

While most lawyers have assumed the courts would eventually extend the scope of sex discrimination to cover sexual orientation, and not just birth gender, the inclusion of gender identity in both the new Virginia statutory provision and also in the Supreme Court decision represent a rapid expansion of the scope of the law.

While there has been only one recent Supreme Court decision affecting Virginia’s employers and employees, there were a handful of changes in the law passed by the General Assembly.  An additional, wholly new statute provides new “whistleblower” protections, expanding the law of wrongful discharge to provide a right to sue for all employees who may report crimes or other violations of state or federal law.  Still another enactment put stronger teeth into the pre-existing law dealing with employers who fail to pay their employees, allowing for treble damages if the nonpayment was knowing, and double damages otherwise.

Still another new law relieves so-called “low-wage employees” from provisions in written employment contracts that seek to limit where an employee may work after he or the employer ends their relationship.  For over a century, what are commonly called “non-compete” agreements have led to regular litigation.  Courts assess non-compete clauses by first presuming them to be an invalid restraint of trade, as their primary purpose can be seen as limiting free market competition.  But the courts will allow an employer to offer proof to overcome the presumption and thereby get the provisions enforced.

Non-competes that are narrowly tailored to a specific, identified need for employer protection are often upheld, especially when the restricted person sold the employer a business or when the restricted person had access to important, confidential information. In contrast, provisions that carelessly impose massive restrictions on ordinary employees are frequently rejected. But few former employees can afford to litigate, and so, even the most overreaching provisions often succeed for lack of court challenges.

The Assembly has dealt with that by enacting an automatic exemption for those it called “low-wage employees.”  The statute provides a formula to assure that the compensation figure where the line is drawn keeps up with inflation.  Currently, the figure resulting from that formula is just under $60,000 per annum.  Thus, the scope of the new law actually extends well beyond those actually considered “low wage” earners.  The law also provides for reimbursement of lawyer fees and other litigation expenses, thereby protecting the employees further from former employers who may try to bully them into submission.

Even when non-compete provisions might be illegal under the new law, other post-termination restrictions may serve an employer’s legitimate interests without creating a violation.  The key is for an employer to get legal help in assessing whether a particular employee can be restricted, and if so, to what extent.  Where many employers get themselves in hot water is in downloading employment agreement forms off the internet, from sources that do not consider the laws specific to Virginia.  Continuing with that practice at this point could lead to financial disaster.

Unlike Congress, our General Assembly meets for only a few months each year, over the winter.  We will not see another spate of new state laws until this time next year.  We rarely see so many substantial changes in state law come forth in a single year.  But as Virginia’s political landscape continues to trend away from many previously longstanding traditions, we should get accustomed to seeing major changes with each passing July.

Marrs & Henry remains fully open and available to you during our current, difficult time.  If you need help, there’s no need to wait.  We can meet with you in person at our offices, we can come to you, we can talk by telephone, we can be reached by e-mail, and we’re also available via video teleconference.