Discrimination and Accommodation Protections
The “Virginia Values Act” amends the Virginia Human Rights Act (VHRA) to cover more employers, provide protection for more protected classes, and offer more remedies to successful claimants, among other things. Specific changes, include:
- Employer Coverage. The VHRA now applies to all private employers in Virginia with 15 or more employees and, with respect to unlawful discharge prohibitions, any employer with more than five employees, except that prohibitions on unlawful discharge based on age apply only to employers with more than five but fewer than 20 employees. Previously, the VHRA applied only to employers with more than five employees who were not otherwise covered by federal antidiscrimination laws: Title VII, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act. This change is likely to increase the number of discrimination claims brought in state court, although the ADEA will remain the exclusive recourse for age discrimination plaintiffs at employers with at least 20 employees.
- Protected classes. The VHRA was expanded to now protect employees from discrimination in hiring, discharge, or other employment terms and conditions on the basis of sexual orientation, gender identity, and veteran status in addition to race, color, religion, national origin, sex, age, marital status, pregnancy, childbirth or related medical conditions, which had already been protected under the VHRA. This change, in line with the U.S. Supreme Court’s recent holding in Bostock v. Clayton County, makes Virginia the first southern state to explicitly prohibit discrimination on the basis of sexual orientation. Related new legislation also amended the definition of racial discrimination to include discrimination based on “traits historically associated with race, including hair texture, hair type, and protective hairstyles such as braids, locks, and twists.”
- Accommodations for pregnant or lactating employees. A related amendment creates a new cause of action against employers with five or more employees for failure to provide reasonable accommodation for known limitations related to pregnancy, childbirth, or related medical conditions, including lactation. Employers must make reasonable accommodation for “the known limitations of a person related to pregnancy, childbirth, or related medical conditions,” unless the employer can demonstrate that the accommodation would impose an undue hardship on the employer. For purposes of the statute, “reasonable accommodation” includes more frequent or longer bathroom breaks, breaks to express breast milk, access to a private location other than a bathroom for the expression of breast milk, modification of employee seating arrangements, a temporary transfer to a less strenuous or hazardous position, assistance with manual labor, job restructuring, a modified work schedule, light duty assignments, or leave to recover from childbirth. If the employer denies a requested accommodation on because it is not deemed reasonable, the employer must engage in an interactive process with the employee to discuss alternative accommodations that may be provided. It is considered a prohibited adverse action against an employee who requests reasonable accommodation to deny employment or promotion opportunities to an otherwise qualified applicant or employee, or to fail to reinstate the employee to her previous or an equivalent position when the need for reasonable accommodation ends.
- Remedies. The VHRA now authorizes unlimited compensatory damages, punitive damages, attorneys’ fees, costs, and injunctive relief (including reinstatement). This is a significant change; previously, successful plaintiffs suing under the VHRA could expect only up to 12 months of back pay and limited attorneys’ fees. An aggrieved person must first file a charge of unlawful discrimination with the Division of Human Rights prior to filing a lawsuit. The Virginia Attorney General may also bring suit under the VHRA either for a single violation that “raises an issue of general public importance” or based on a “pattern or practice of resistance to the full enjoyment” of rights under the VHRA. Remedies in that instance may include civil penalties of $50,000 for the first violation and $100,000 for any subsequent violation, plus compensatory and punitive damages to the aggrieved person, attorneys’ fees and costs, and injunctive relief.
- Communication of Rights. The amendments also provide that employers must inform employees of these changes by publishing such information in the workplace and in employee handbooks, providing the information to all new employees upon hiring, communicating such information to all current employees by October 29, 2020, and informing all pregnant employees of their expanded rights within 10 days of the employee providing notice that they are pregnant.
Whistleblower Protections
Virginia’s new “Fraud and Abuse Whistleblower Protection Act” establishes a range of new protections for whistleblowers and creates new avenues for bringing suit:
- Protected Activity. The Act prohibits employers from retaliating against any employee who: (1) in good faith, “reports a violation of any federal or state law or regulation to a supervisor or to any governmental body or law-enforcement official;” (2) “[i]s requested by a governmental body or law-enforcement official to participate in an investigation, hearing, or inquiry;” (3) “[r]efuses to engage in a criminal act that would subject the employee to criminal liability;” (4) “[r]efuses an employer’s order to perform an action that violates any federal or state law or regulation” when the employee “informs the employer that the order is being refused for that reason;” or (5) “[p]rovides information to or testifies before any governmental body or law-enforcement official conducting an investigation, hearing, or inquiry into any alleged violation by the employer of federal or state law or regulation.” It is noteworthy that the protected activity includes both internal reporting to a supervisor and external reporting to government entities.
- Exceptions. Employees are not protected if their disclosure is false or made in reckless disregard of the truth, if they disclose privileged information or data otherwise protected by law, or if their disclosure would “violate federal or state law or diminish or impair the rights of any person to the continued protection of confidentiality of communications provided by common law.”
- Private Right of Action. The law provides employees with a private right of action such that they may sue directly in court. Possible remedies include injunctive relief, reinstatement, and compensation for lost wages and benefits, as well as attorneys’ fees and costs.
Partial Prohibition on Non-Compete Clauses
Virginia courts have long disfavored restrictions on competition, refusing to enforce them if they contain restrictions deemed unreasonable in geographic scope, duration, or the scope of restricted activities; Virginia has also declined to “blue pencil” overbroad non-compete provisions. Virginia now by statute greatly restricts employers’ ability to impose and enforce non-compete clauses against current and former employees and provides a private right of action for employees to enforce the law. The new law includes the following provisions:
- Prohibition on Non-Compete Clauses for Lower-Wage Employees. Employers are prohibited from entering into, enforcing, or threatening to enforce any non-compete clause against a “low-wage employee, ” which is defined as an employee, intern, or individual independent contractor whose average weekly earnings are less than the average weekly wage in Virginia (currently $999.67). Employees whose earnings derive wholly or predominately from sales commissions, incentives, or bonuses are excluded from protection under the statute.
- Other Limitations. The law does not restrict standard confidentiality agreements, but does forbid employers from establishing or enforcing any covenant with any employee that “restrict[s] an employee from providing a service to a customer or client of the employer if the employee does not initiate contact with or solicit the customer or client.”
- Private Right of Action. Employees may sue an employer “or other person that attempts to enforce” a prohibited non-compete in violation of the statute. Remedies include an order voiding the clause, an injunction, liquidated damages, lost compensation, and attorneys’ fees.
- Public Enforcement. The Commissioner may impose a civil penalty of $10,000 for each violation of the prohibition against low-wage worker non-compete clauses.
- Communication of Rights. Employers must post a copy of the statute or a summary approved by the Virginia Department of Labor and Industry in the workplace. Failure to post the notice, after warning, may result in civil penalties.
- Effective Date: The Act goes into effect on July 1, 2020, and is “applicable to covenants not to compete that are entered into on or after July 1, 2020.” Given, however, the provision prohibiting “threaten[ing] to enforce a covenant to compete with any low-employee,” Virginia employers would be prudent not to attempt to enforce existing non-competes with low-wage workers.
Worker Classification
Virginia enacted a new law on misclassification of workers that now presumes that any individual performing services for remuneration has employee status, making it more difficult for Virginia employers to properly treat and/or classify individuals as independent contractors. Specifically:
- Presumption of Employee Status. Any individual providing paid service to a person is presumed to be an employee of that person “unless it is shown that the individual is an independent contractor as determined under the Internal Revenue Service guidelines.” The statute specifies that the relevant IRS guidelines are both its implementing regulations at 26 CFR §31.3121(d)-1 and the IRS’s “interpretation of common law doctrine on independent contractors.” The burden remains on the employer to establish proper classification as an independent contractor.
- Private Right of Action. A misclassified individual may sue in court if the employer “had knowledge of the individual’s misclassification.” Remedies include unpaid wages, salary, reasonable attorneys’ fees, and “employment benefits, including expenses incurred by the employee that would otherwise have been covered by insurance,” such as medical expenses, or other lost compensation.
- Retaliation Protection. Under a related new law, no employer may retaliate against any individual who has reported or “plans to report” in good faith a misclassification, or is requested or subpoenaed to do so. The Commissioner enforces the anti-retaliation provision, and may seek reinstatement of any terminated employee, lost wages, and a civil penalty equal to lost wages.
Wage Payment Law Amendments
Governor Northam signed several amendments to Virginia’s Wage Payment Law, which include the following changes:
- Private Right of Action and Collective Action. Previously, employees seeking to bring wage claims under Virginia law would file a complaint with the Department of Labor and Industry. The new amendments permit employees to sue an employer directly in court for failure to pay wages, without first exhausting administrative remedies, within three years after the cause of action accrues. The statute of limitations will be tolled if the employee first files an administrative complaint. In addition, employees may sue either individually or as a collective action on behalf of similarly situated employees, consistent with procedures under the federal Fair Labor Standards Act. This change in law could result in Virginia employers seeing an uptick of state court actions.
- Remedies and Treble Damages. Employees may recover wages owed, additional liquidated damages equivalent to the unpaid wages, interest, and attorney’s fees. If an employer “knowingly” fails to pay wages, the court “shall award” liquidated damages of triple the amount of wages due. For purposes of the statute, “knowingly” means either actual knowledge that wages are owed, “deliberate ignorance,” or acting “in reckless disregard of the truth or falsity of the information.”
Pay Transparency
Governor Northam also signed bills that support pay transparency. A new law prohibits retaliation by an employer against an employee for discussing or disclosing to another employee “any information about either the employee’s own wages or other compensation or about any other employee’s wages or other compensation”—provided, however, that the employee did not gain access to the compensation information of those other employees or applicants as part of their essential job functions. A related amendment to the Wage Payment Act requires Virginia employers to provide employees with a paystub “each regular pay date,” which must contain “sufficient information to enable the employee to determine how the gross and net pay were calculated,” including, for employees paid on an hourly basis, the number of hours worked. Violations are subject to a civil penalty of $100 per violation.
Marijuana Convictions
Virginia has joined the ranks of states that decriminalized under state law simple possession of marijuana. Although Virginia still prohibits possession of marijuana (other than pursuant to a valid prescription), the new law imposes only a $25 civil penalty. Records of these convictions are restricted. Employers “shall not, in any application, interview, or otherwise, require an applicant for employment … to disclose information concerning any arrest, criminal charge, or conviction” under Virginia’s simple marijuana possession statute. Employers should ensure that job application materials are updated to comply with this new prohibition, as the statute provides that a willful violation is a Class 1 misdemeanor. Marijuana possession remains unlawful under federal law, however, and the new Virginia statutory provisions do not address questions about convictions under federal law or the laws of any other jurisdiction.
Pandemic Occupational Safety Regulations
In addition, as noted in Pillsbury’s client alert of July 23, 2020, the Virginia Department of Labor and Industry has adopted emergency temporary workplace safety regulations that mandate actions Virginia employers must take to protect workers from contracting COVID-19. The measures include specific rules about screening employees, notifying employees and others of known exposures, changing workplace practices, policies, and procedures, and other measures. These regulations went into effect the week of July 27, 2020, for a six-month period.