Employment Law Update - March 14

Articles by Mark D. Tolman

2024 Utah Legislative Update

The Utah Legislature wrapped up its seven-week legislative session on March 1, 2024. Utah’s 2024 Legislative Session was historic—a record 591 bills passed. Among these bills are a surprising number of employment-related bills, many of which can fairly be described as employee-friendly. This edition of our newsletter provides a summary of the employment related bills passed by the Legislature—including bills applicable to all employers and those reserved for the public sector—and highlights a couple issues to watch in the future.?

Legislation Applicable to All Employers

House Bill 55—Employee Confidentiality Amendments (passed on Feb. 16; pending signature by the Governor). House Bill 55 is a significant development that will require employers to review their form confidentiality agreements. This employee-friendly bill does three things. First, it renders void a confidentiality agreement (including non-disclosure and non-disparagement clauses) with an employee that prohibits disclosure about sexual assault or harassment. Employers may need to revise their form confidentiality agreements to add a disclaimer that disclosures about alleged sexual assault or harassment are not prohibited. The bill is retroactive to Jan. 1, 2023. Thus, employers also should consider amending confidentiality agreements executed on or after that date. Readers of these updates know that the National Labor Relations Board (NLRB) has concluded that an agreement prohibiting disclosures about sexual assault or harassment constitutes an unfair labor practice—at least for non-supervisory personnel. Thus, although this bill is a significant Utah development, this first aspect of the law does not represent a major departure from federal law.

Second, the bill prohibits retaliation against an employee who refuses to sign a confidentiality agreement that prohibits disclosure about sexual assault or harassment.

Third, although it appears that a settlement agreement with an employee may prohibit disclosures about sexual assault or harassment, an employee who has signed such an agreement may revoke it within three business days. But note the conflict between the first and third aspects of this bill—any agreement that prohibits disclosure of sex assault/harassment “as a condition of employment” is void, but a settlement agreement that prohibits such disclosures is merely revocable within three business days. To avoid potential conflict, consider disclaiming in your settlement and severance agreements that any non-disclosure or non-disparagement clause limiting disclosures about alleged sex assault or harassment is expressly “not a condition of employment.”?

H.B. 396—Workplace Discrimination Amendments (passed on March 1; pending signature by the Governor). House Bill 396 is another employee-friendly bill that has some significant—even troubling—impacts on employers. This bill amends the Utah Antidiscrimination Act (Utah Code § 34A-5-112) to provide that “an employer may not compel an employee to engage in religiously objectionable?expression that the employee reasonably believes would burden or offend the employee's religious, moral, or conscientious beliefs, unless accommodating the employee would cause an undue burden to the employer by substantially interfering with the employer’s: (a) core mission or the employer’s ability to conduct business in an effective or financially reasonable manner; or (b) ability to provide training and safety instruction for the job.” The bill defines “religiously objectionable expression” as “expression, action, or inaction that burdens or offends a religious, moral or conscientious belief, including?dress and grooming requirements, speech, scheduling, prayer, and abstention, including abstentions relating to healthcare.”

As written, House Bill 396 may preclude an employer from compelling an employee with a religious objection to respect a transgender coworker’s preferred name and pronouns (sources say that pronoun use expressly animated this bill). As a result, House Bill 396 places Utah employers in the crossfire between federal and state law. According to recent guidance from the Equal Employment Opportunity Commission, “[a]lthough accidental misuse of a transgender employee’s name and pronouns does not violate Title VII, intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee could contribute to an unlawful hostile work environment.” Thus, an employer who prohibits misgendering to comply with federal law, may violate Utah law in the process.

Should you find yourself in this unenviable crossfire, consider relying on the exception in HB 396 which states that an accommodation does not need to be granted when it impacts the “employer’s ability to conduct business in an effective or financially reasonable manner.” Violating Title VII to allow intentional misgendering exposes an employer to substantial legal risk and damages—i.e., penalties that impact an employer’s ability to operate in a “financially reasonable manner.”

H.B. 170—Unemployment Insurance Amendments (passed on Feb. 20; pending signature by the Governor). House Bill 170 is aimed at reducing fraudulent unemployment claims. Under this new law, an individual is disqualified from receiving unemployment benefits if they fail to “appear for a scheduled interview for suitable work” or fail to “accept an offer of suitable work from an employer . . . within two days after the day” the offer is made. The bill also requires the Department of Workforce Services to develop and maintain a website for employers to report possible fraud in relation to unemployment insurance.

Legislation Applicable to Public Sector Employers Only

HB 257—Sex-Based Designations for Privacy (signed by Governor Cox on Jan. 30, 2024). House Bill 257 addresses government-owned bathrooms and changing facilities. In a nutshell, the bill states (among other things) that individuals may only use a public restroom or changing room that corresponds to their biological sex. However, the bill does not apply in the employment setting. HB 257 only applies to facilities that are “open to the general public.” The bill expressly excludes facilities “only accessible to employees of a government entity; or any area that is not normally accessible to the public.” Accordingly, public sector employers may continue to follow the EEOC’s guidance (linked above) that “employers may not deny an employee equal access to a bathroom, locker room, or shower that corresponds to the employee’s gender identity.”

HB 261—Equal Opportunity Initiatives aka the Anti-DEI Bill (signed by Governor Cox on Jan. 30, 2024). House Bill 261 applies only to public universities, the public education system and other governmental employers. The bill broadly requires that public employers disband Diversity, Equity and Inclusion (DEI) offices and prohibits public employers from seeking diversity statements from employees (i.e., a statement affirming an individual’s position on diversity).

H.B. 460 Government Employee Conscience Protection (passed on March 1; pending signature by the Governor). House Bill 460 allows governmental employees to request that their employer relieve them from tasks that conflict with their sincerely held religious beliefs or “conscience.” The term “conscience” is defined as “a sincerely held belief as to the rightness or wrongness of an action or inaction.” A governmental entity must grant an employee’s request to be relieved from performing such tasks unless doing so would result in undue hardship. Public sector employees seeking to be relieved from performing tasks are required to submit a written request with an explanation for why the task would conflict with the employee’s religious beliefs of conscience. The governmental entity will have just two days to respond to the request. If the request is denied, the governmental entity must provide a detailed explanation of why excusing the task would impose an undue hardship. Undue hardship is defined as “a substantial increase in costs to a governmental entity’s operations and budget that would result from an employee being relieved from a certain task.”?The law does not apply “if a request is to be relieved from performing a task associated with safety or training instructions that are directly related to the responsibilities of an employee’s employment.” Public sector employers may not retaliate against an employee who seeks to be relieved from a task under the statute.

Aggrieved employees may sue their public sector employers for violations of the statute and may seek injunctive relief (i.e., an order precluding their employer from enforcing the task), reinstatement, back pay, and attorney fees and costs. The statute of limitations is 180 days.

H.B. 239 State Employee Cybersecurity Training (passed on Feb. 15; pending signature by the Governor). House Bill 239 requires the Utah Division of Technology Services to create a yearly cybersecurity course and requires all state executive branch employees to complete the training once a year.

S.B. 174 Safe Leave Amendments (passed on Feb. 29, 2024; pending signature by the Governor). SB 174 applies only to certain state employees and requires one week of paid “safe leave” per year. Eligible employees may use this leave to care for themselves, or an immediate family member, following domestic violence, sexual assault or human trafficking.

H.B. 228 Public Employee Leave Amendments (passed on March 1; pending signature by the Governor). House Bill 228 requires public sector employers that employ a member of the Utah House or Utah Senate provide state legislator employees with unpaid leave on authorized legislative days and authorized legislative training days.

What may be ahead in the 2025 Session?

Using proposed bills that did not pass is a helpful predictor of bills that may be yet to come, albeit in modified or improved ways. We likely should expect continued scrutiny of DEI programs, including in the private sector. House Bill 111 , Employment Training Requirement Limitations, initially proposed that employers (public or private) be prohibited from training employees, among other things, that members of one protected class are morally superior to others, that certain individuals are inherently racist, that an individual should be subjected to discrimination to achieve DEI and that virtues, including merit, excellence, hard work, fairness, and neutrality are racist or sexist. We trust that no reader of these updates has been training their employees on such matters! The bill was heavily amended, ditching any limitations on training and requiring only that employers not ask their employees to sign a statement acknowledging the matters listed above. The bill passed the House, but not the Senate. As the culture wars continue, expect a heavy dose of DEI-related legislation.?

Sources tell the author of these updates that the Utah House is interested in further restricting non-compete agreements, but that the Senate generally is not in favor of additional restrictions. House Bill 305 would have rendered void a non-competition agreement between an employer and an employee when: (1) the employee is non-exempt (i.e., hourly); or (2) the employee had been laid off (the bill did not define “laid off”). Although HB 305 did not pass, watch for continued efforts to narrow non-compete agreements in future legislative sessions.?