John Dudrey is a partner in the firm’s Labor & Employment group. His practice focuses on wage and hour compliance, representation of employers with unionized workforces, and complex advice and counsel matters, in addition to general labor and employment practice.

Click here for John Dudrey’s full bio.
Continue Reading John Dudrey

As of yesterday—May 20, 2025—EEO-1 data collection is open. The deadline to file the 2024 EEO-1 Component 1 report is June 24, 2025. The EEOC stated there will be no extensions, so covered employers should act promptly to file their reports.  For detailed information on the EEOC’s substantive filing requirements, employers may refer to the EEO-1 Component 1 Instruction Booklet, which can be found here, and are encouraged to contact their employment attorney.

The EEO-1 opening announcement states that “[u]nder current EEOC regulations, private employers with 100 or more employees and federal contractors with 50 or more employees and that meet certain criteria, are required to report annually the number of individuals they employ by job category and by sex and race or ethnicity.”  The phrase ‘under current EEOC regulations’ is noteworthy because those ‘regulations,’ including 41 CFR § 60-1.7, were promulgated to enforce Executive Order 11246.  See 41 CFR § 60-1.1 (“The purpose of the regulations in this part is to achieve the aims of parts II, III, and IV of Executive Order 11246 . . . .”).  As federal contractors are likely aware, Executive Order 11246 was recently revoked by Executive Order 14173.  (See our January 28, 2025 blog post for more information about that Executive Order.)  Federal contractors with 50-99 employees would be well advised to consult with their employment attorneys regarding the application of the Executive Orders and federal regulations.  For private employers, including federal contractors, with 100 or more employees, EEO-1 reporting should be mostly business as usual.

The announcement about the opening of the reporting period was accompanied by a short message from EEOC Acting Chair Andrea Lucas regarding disparate impact liability, EEO-1 reporting, and the role of the EEOC.

  • The Acting Chair noted that the EEOC will prioritize responding to and remedying intentional discrimination claims, rather than disparate impact claims, going forward.  (See our April 23, 2025 blog post for more information about that Executive Order.)
  • Consistent with priorities of the current administration, the Acting Chair reiterated that employers may not use EEO-1 reporting data to take employment actions based on, or motivated even in part by, an employee’s protected characteristics—including in the context of diversity-related programs.
  • Interestingly, the Acting Chair stated, “The EEOC is an executive branch agency, not an independent agency. We will fully and robustly comply with this and all Executive Orders. Under my leadership, the EEOC will prioritize remedying intentional discrimination claims.”

As the 83rd Oregon Legislative Session approaches its end, several employment-related bills are still in play, and they could carry significant implications for businesses across the state. While none have been signed into law yet, the momentum behind them makes this a critical time for employers to pay attention and speak up.

Three proposals—SB 916, HB 2957, and SB 426—stand out for their potential to reshape the employer-employee landscape, increase litigation exposure, and raise costs across industries.

  • SB 916 would allow striking workers to collect unemployment benefits for up to 26 weeks, a move that could shift financial burdens from unions to employers and incentivize longer or more frequent strikes. Oregon would become one of just four states that allow workers on strike to collect unemployment benefits.
  • HB 2957 eliminates the 90-day window to sue after a BOLI complaint is dismissed, allowing employees to wait up to the full five-year statutory period to file a lawsuit, even if they’ve already gone through the agency process. The bill also prohibits employers from entering into agreements that limit an employee’s timeframe to bring lawsuits in cases in which BOLI has jurisdiction.
  • SB 426 permits workers or third parties to hold general contractors and property owners strictly liable for wage violations committed by subcontractors, regardless of whether the general contractors had knowledge of the violations.

Key Takeaways:

  • Striking workers could soon receive unemployment benefits, potentially extending work stoppages and leading to increased employer contributions to unemployment insurance.
  • Employers may face years of legal uncertainty under HB 2957, with prolonged exposure to harassment or discrimination claims—even after BOLI review and dismissal.
  • General contractors and property owners could be liable for subcontractor misconduct, complicating risk management in construction projects and likely increasing the costs of real estate activity in the state.
  • Business groups are advocating for amendments, but the clock is ticking, with the legislative session wrapping up Friday, May 23.
  • Now is the time for employers to engage—it is easier and more effective to speak up now before these bills become laws.

Stay Informed and Take Action

If your business could be affected by any of these bills, now is the time to contact your Oregon legislators to share your thoughts and concerns. You can find your representatives here.

Read the full article here.

Edited May 20, 2025

Last month, the Equal Employment Opportunity Commission (“EEOC”) submitted a proposed 2024 EEO-1 instruction booklet to the Office of Management and Budget. If the proposal is approved, the EEO-1 reporting period will begin on May 20, 2025 and run through June 24, 2025. As employers prepare to file their 2024 EEO-1 Component 1 reports, they should be aware of two changes for this reporting cycle.

Ambiguity Regarding Reporting Requirement for Small Federal Contractors

First, there is ambiguity regarding EEO-1 reporting requirements for small (50-99 employees) federal contractors.  The published Department of Labor regulations ostensibly require EEO-1 reporting for federal contractors with 50 or more employees. See 41 CFR § 60-1.7. Those regulations were promulgated to enforce Executive Order 11246.  See 41 CFR § 60-1.1 (“The purpose of the regulations in this part is to achieve the aims of parts II, III, and IV of Executive Order 11246 . . . .”). However, Executive Order 14173 revoked Executive Order 11246. (See our January 28, 2025 blog post for more information about that Executive Order.) Accordingly, if you are a small federal contractor with fewer than 100 employees, we recommend contacting your employment attorney for further analysis and guidance.  

Removal of Non-Binary Gender Identity Reporting Option

Second, the EEOC has proposed revising its EEO-1 instruction booklet to explain that the EEO-1 Component 1 data collection process does not include options for reporting non-binary gender identities. This is a non-substantive change that does not impact the data collection template, which only ever included reporting options for male and female. In previous years, however, information about non-binary employees could be noted in the comments section of EEO-1 reports; the proposed changes clarify that such supplemental data will not be processed. This shift is intended to comply with Executive Order 14168, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.”

Covered employers should begin taking steps to prepare for EEO-1 reporting. Employers with questions about EEO-1 reporting, generally, or changes to the current reporting cycle should contact their Stoel Rives employment lawyer. We will publish further updates regarding the reporting schedule and other changes to the data collection process as they become available.

Two administrative agencies within the federal government have been busy lately publishing new rules that govern important aspects of employers’ relationships with their employees.  Read more below for further updates.

DOL Rolls Out Final Rule Increasing Minimum Salary For Exempt Employees

The U.S. Department of Labor (“DOL”) has rolled out its long-awaited update to the minimum salary requirements for employees who are exempt from the Fair Labor Standards Act’s (“FLSA”) overtime and minimum wage requirements under the so-called “white collar” exemptions (administrative employees, executive employees, professional employees, and computer employees).  Here is what you need to know about what the new rule requires:

  1. Assuming there are no successful legal challenges (see below), the new rule will go into effect on July 1, 2024, and will increase the required minimum salary to $844 per week ($43,888 per year).  This figure is pegged to the standard salary level at the 20th percentile of weekly earnings for full-time salaried employees in the southeastern portion of the United States.  (Per an analysis conducted by the DOL, employees in the Southeast earn less than employees in any other area of the country.) 
  2. Effective January 1, 2025, the required minimum salary will increase to $1,128 per week ($58,656 per year).  The January 1, 2025, increase is pegged to the 35th percentile of weekly earnings for salaried employees in the southeastern United States. 
  3. Effective July 1, 2027, the required minimum salary will update every three years based on the up-to-date wage developed by the DOL’s Bureau of Labor Statistics. 
  4. The new rule also made changes to the required minimum salary for “highly compensated employees,” which is a separate (and less common) category of white-collar exemption that shares elements of the administrative, executive, and professional exemptions.  Effective July 1, 2024, the required minimum salary for the highly compensated employee exemption increases to $132,964 per year.  Effective January 1, 2025, the required minimum salary increases to $151,164 per year. 
  5. The new rule does not change the “duties” tests required to establish the applicability of the “white collar” exemption.

Here are some additional important points to keep in mind about the new rule:

  1. It is reasonably likely that business groups or other organizations opposed to the higher salary requirement will initiate litigation against the DOL seeking to stop the implementation of the new rule.  It is not clear yet whether such litigation would be successful in derailing the new rule completely or perhaps in simply delaying it.  However, some commentators have noted that the new rule’s reliance on salary percentiles is similar to the reasoning the DOL applied in its attempted update to the salary threshold in 2016, which was enjoined by the courts before it took effect. 
  2. In anticipation of the new rule going into effect, we recommend employers assess whether any of their exempt employees earn less than what the new rule requires.  If so, and the rule goes into effect, employers will have to decide whether to increase employees’ salaries or to reclassify them as non-exempt.  Employers may wish to delay announcing any such changes until closer to July 1, when we have more information about how legal challenges will impact the new rule.
  3. The new rule only addresses the minimum salary for exemptions under the FLSA, which is a federal law.  Many states, including Oregon, Washington, and California, impose their own salary requirements for exempt employees.  Employers must comply with whichever standard (state or federal) is higher.  For example, for large employers (those with 51+ employees) in Washington, the annual salary requirement is $67,724.80 for 2024 and is projected to increase to $78,249.60 in 2025.  In California, the current minimum is $66,560 under state law.  Oregon’s minimum salary (which is tied to the state’s minimum wage for non-exempt employees) is lower than the current federal minimum salary. 

Please stay tuned for more updates about the DOL’s new rule. In the meantime, please reach out to us with questions.

FTC Rolls Out New Rule Barring Most Non-Competes Effective September 4, 2024

The Federal Trade Commission (“FTC”) recently published a final rule banning virtually all new non-compete agreements and, with limited exceptions, requiring employers to notify employees that their current non-compete agreements are no longer enforceable.  The new rule is scheduled to go into effect on September 4, 2024.  However, because of several pending lawsuits in which businesses and business groups have contended that the FTC lacked the legal authority to issue the new rule, it is questionable whether it will go into effect at all or, if so, when. 

Section 5 of the Federal Trade Commission Act prohibits “unfair or deceptive acts or practices in or affecting commerce.”  Traditionally, the FTC, which has the authority enforce the FTC Act, has relied on Section 5 to enforce consumer-protection standards and anti-competitive standards under other federal antitrust laws.  However, in January 2023, the FTC announced its intent to regulate employee non-compete agreements under the auspices of Section 5 and published a proposed rule that largely outlawed them on a nation-wide basis.

The final rule largely tracks with the proposed rule.  There are three main parts of the final rule. 

First, the rule defines a “non-compete clause” as a requirement that a “worker” (including both employees and independent contractors) refrain from “[s]eeking or accepting work in the United States with a different person” or “[o]perating a business in the United States” after the worker’s employment concludes.  Other restrictive covenants, such as confidentiality, or non-solicitation agreements, are still permitted despite the final rule.  However, such restrictive covenants could nevertheless be prohibited under the final rule if they are so broad in scope that they function as non-competes. 

Second, the final rule bars all employers that are subject to the FTC’s jurisdiction from entering into new non-compete agreements.  The only exception is for non-competes that a worker agrees to as a condition of the “bona fide” sale of a business.  However, this exception is somewhat limited because (per the FTC’s comments accompanying the final rule) it only applies when there has been a legitimate, arms-length transaction between unrelated buyers and sellers in which the seller exchanges its business good will as part of the sale. 

Third, the final rule requires employers to provide workers who are subject to current non-compete clauses “clear and conspicuous notice” in writing by September 4, 2024, that the non-compete clauses will not and cannot be legally enforced.  To be clear, this means that the new rule is retroactive.  Subject to the following three exceptions, the new rule reaches all current non-competes even if they were entered into long before the final rule goes into effect.  The first exception is for non-competes agreed to as part of “bona fide” sales of a business, as described above.  The second exception is for non-competes with so-called “senior executives,” who are defined as workers earning more than $151,164 annually who serve in a policy-making position.  Employers may enforce current non-competes with senior executives, but may not enter into any new non-competes with them.  Finally, the third exception is for non-competes that are the subject of current litigation, or where a cause of action, for the violation of the non-compete that accrues prior to September 4, 2024 may be enforced by the court hearing the matter. 

Next Steps:

Whether the final rule takes effect in September remains to be seen.  Three lawsuits have been filed in an effort to enjoin enforcement of the final rule.  It is possible (some think likely) that a court will take action to block the final rule from taking effect, and will ultimately strike it down as unlawful. 

For now, employers should consider taking the following action:

  • Consider whether your business interests can be protected with properly tailored non-solicitation or confidentiality clauses.  Please consult your legal counsel for further advice on this and to draft restrictive covenants that comply with state law (even if the FTC rule does not take effect).
  • Establish and reinforce limitations on trade secret access so that trade secrets can only be accessed by those employees who need to access them.
  • Identify employees with non-compete agreements and determine whether they are “senior executives” whose agreements will be grandfathered into compliance even if the final rule goes into effect.  Non-senior executives should be identified for notification if the final rule takes effect.
  • Revisit all restrictive covenants to ensure compliance with the new rule should it take effect.  Please consult your legal counsel to help with this analysis.
  • Create a plan for providing notice to current and former workers with non-compete clauses that their non-competes are no longer valid.  The FTC has prepared a model notice that employers may use.  Written notice must go out upon the effective date of September 4, 2024.

Please contact us with any questions about the FTC’s new rule and what to do next.

As we previously advised, under Oregon Senate Bill 1515 (“SB 1515”) effective July 1, 2024, most of the Oregon Family Leave Act (“OFLA”)—including leave for the employee’s or a family member’s serious health condition—will sunset. (Pregnancy disability, sick child, and bereavement leave remain available under OFLA.)  Employees may instead look to other applicable leave laws, including Paid Leave Oregon and the federal Family Medical Leave Act (“FMLA”).

One question that SB 1515 left unanswered was how employers should address employees whose OFLA leaves were approved under current law, but will no longer be covered under the revised OFLA beginning July 1. 

The Oregon Bureau of Labor and Industries (“BOLI”) has now published a Temporary Rule with an answer. No later than June 1, 2024, employers must notify employees in writing that their previously approved OFLA leaves will end effective July 1, 2024.

Please read below for a Q&A with more information about the Temporary Rule.

Which Employees Must Receive Written Notice? Employees are entitled to notice if: (1) they have been approved for OFLA leave for any reason other than pregnancy disability leave, sick child leave, or bereavement leave (for example, serious health condition leave for the employee or a family member); and (2) their approved OFLA leave extends past June 30, 2024.

When Must the Written Notice Be Sent? The Temporary Rule states that employers must send the notice “as soon as practicable” but no later than June 1, 2024. 

What Must the Written Notice Contain? The employer must inform the employees that their OFLA leave will not be approved effective July 1, 2024. In addition, the employer must provide the employees with information about the ability to apply for PLO benefits, whether through the State of Oregon or through the employer’s equivalent plan. Employers may comply with this aspect of the Temporary Rule by providing a copy of the Oregon Employment Department’s (“OED”) standard PLO notice. In addition, for new OFLA requests submitted between now and June 30, 2024, employers must provide employees with notice of PLO benefits within 14 days of receiving the OFLA request.

What Else Should I Know About the Temporary Rule? In many instances, employee absences that were covered under OFLA are also covered under FMLA. The Temporary Rule has no effect on employees’ FMLA eligibility because FMLA is administered by the federal Department of Labor (“DOL”). Although not required by the Temporary Rule, employers should consider notifying employees whose OFLA leaves will terminate effective July 1 that their FMLA leave is unaffected. 

What Happens if an Employer Fails to Comply with the Notice Requirement? The Temporary Rule does not set forth a penalty for failure to comply with the June 1 deadline.

Please feel free to reach out to anyone from our Labor and Employment group if you have questions about the Temporary Rule or SB 1515. Also, please be sure to register for our June 25, 2024, webinar, “Paid Leave Oregon and OFLA: The Latest and Greatest.” 

On March 21, 2024, Oregon Governor Tina Kotek signed into law Senate Bill 1515, amending the Oregon Family Leave Act (“OFLA”) and the Paid Leave Oregon program (“PLO”). The bill is intended to better align the OFLA and PLO.  This alert highlights the most significant OFLA and PLO changes, which will take effect July 1, 2024.

The law makes significant changes to OFLA.  Before SB 1515, several types of leave – including parental leave and leave for the serious health condition of an employee or the employee’s family member – were covered by OFLA, PLO, and the federal Family Medical Leave Act (“FMLA”). This allowed employees to potentially “stack” their leaves by exhausting OFLA and/or FMLA leave and then taking leave under PLO for the same purpose.  SB 1515 addresses some but not all of these stacking issues and creates new questions for employers.

Rather than simply repealing OFLA entirely or prohibiting employees from “stacking” their leaves, SB 1515 amends OFLA to significantly decrease the overlap with PLO.  Under the revised law, OFLA now only covers leave for one of the following:

  1. To care for a child of the employee who is suffering from an illness, injury, or condition that requires home care regardless of whether the child has a serious health condition, or who requires home care due to the closure of the child’s school or child care provider as a result of a public health emergency.
  2. To deal with the death of a family member by: (A) attending the funeral or alternative to a funeral of the family member; (B) making arrangements necessitated by the death of the family member; or (C) grieving the death of the family member. (Note that bereavement leave is limited to two weeks per incident, and bereavement leave cannot exceed four weeks within any one-year period.)
  3. For pregnancy-related disability leave.

Employers with 50 or more employees should note that FMLA leave criteria have not changed.  Employees may still be able to stack FMLA and PLO time. 

Other key changes in the new law include:

  • Employees taking PLO are now entitled to use accrued paid time off (e.g., vacation/sick time) to “top up” their pay to 100% of their regular compensation while on PLO.  (Previously, employers had discretion about whether to allow this.)  Employers have the option of whether to allow employees to go beyond 100% of their regular pay. 
  • The new law requires the Oregon Bureau of Labor and Industries (“BOLI”) and the Oregon Employment Department (“OED”) to develop a mechanism to share information with employers about how much pay employees are receiving.  This will be a relief to employers who are trying to “top up” employee pay while the employee is on PLO.
  • The new law addresses a conflict with Oregon’s predictive scheduling law, which applies to large employers in the retail, grocery, and hospitality industries, and which generally requires these  employers  to set employee schedules 14 days in advance. The bill clarifies that employers will not be subject to a penalty if an employee’s schedule must be changed to accommodate another employee’s taking of or return from leave, if the employee fails to give 14 days’ advance notice of the need for leave, or if the employee returns without giving 14 days’ advance notice.

The new OFLA and PLO rules go into effect July 1, 2024.  Between now and then, employers who are subject to OFLA (i.e., those with 25+ employees in Oregon) should consider updating their leave policies to track the new law. 

Please contact your attorney if you have questions about how this development impacts your business.

On May 10, 2023, the Oregon Health Authority (“OHA”) announced that, effective May 11, it is suspending the statewide rule requiring that health care workers be fully vaccinated against COVID-19 unless they have an approved medical or religious exception. The news coincides with the end of the federal public health emergency on May 11, along with the anticipated end of the federal COVID-19 vaccination mandate for health care facilities certified by the Centers for Medicare and Medicaid Services (“CMS”).

The OHA stated that immediate suspension of the rule is necessary “to align with the end of the federal public health emergency and elimination of other COVID-19-related control measures, and because there is no longer a significant public health need for this rule.”

The OHA also stated:

The rationale for the rule when it was adopted was that COVID-19 was likely to be transmitted in these congregate settings, placing vulnerable persons at risk. [The Oregon mandate] is now being suspended, because immunity from the primary series is known to wane over time, such that 2 booster vaccinations have since been recommended for most persons. Moreover, the virus that causes COVID-19 has mutated such that the original series provides little longer-term protection against infection by currently circulating strains. Finally, at this point most people have been infected by the virus (94% by one estimate), giving survivors a degree of immunity at least equivalent to that provided by the original vaccination series for some period of time.

Here are some of the immediate questions employers may have following the suspension:

  • What about the CMS mandate? At present, it remains in effect; however, CMS previously announced that it would end the vaccination requirement soon after the public health emergency expired (which it did today). We continue to monitor this and anticipate more guidance from CMS in the near future.
  • What if we have unvaccinated employees on leave? Or if we previously terminated unvaccinated employees? Unvaccinated employees who remain on leave may have reinstatement rights, depending on the circumstances of their leave and the terms of any applicable agreements, including collective bargaining agreements. Employees who did not receive the COVID-19 vaccine and were terminated because there was no accommodation that would have allowed them to work may decide on their own to reapply, or employers may decide to evaluate returning employees to the workplace. It is prudent to navigate these situations with the assistance of your employment counsel.
  • Can an employer still require COVID-19 vaccines as a matter of policy? ORS 433.416 arguably prohibits an employer from requiring health care workers to be immunized as a condition of employment, unless immunization is otherwise required by a federal or state law, rule, or regulation. With the OHA and CMS requirements going by the wayside, COVID-19 vaccines will soon enough no longer be required by law. Because the precise scope of ORS 433.416’s requirements is uncertain, again, we recommend conferring with your employment counsel on this topic. Generally, the statute does not apply outside of the health care context, which means that non-health care employers generally may impose COVID vaccine requirements if they wish to do so.
  • Can we still require unvaccinated employees to take additional safety precautions when working on-site? Yes. Nothing about the OHA’s rollback of the COVID-19 vaccine requirement changes an employer’s authority to implement COVID-19 safety practices.

Notwithstanding the rescission of the mandate, OHA continues to strongly recommend “vaccination with the most up-to-date formulations” to reduce the likelihood of severe disease. This is consistent with guidance from the CDC, which continues to recommend that individuals receive the updated Pfizer-BioNTech or Moderna COVID-19 vaccine to reduce the risk of serious illness, hospitalization, and death.

Please contact your attorney if you have questions about how this development impacts your business.

In a recent decision titled Buero v. Amazon.com Services, Inc.­­, 370 Or. 502 (2022),  the Oregon Supreme Court ruled that Oregon’s wage and hour law uses the same definition of “work time” as the federal Fair Labor Standards Act (“FLSA”).  The Buero decision resolves what had been a hotly contested legal issue for many years and clarifies that Oregon employers (most of which are subject to Oregon law and the FLSA) satisfy their legal obligation to calculate employees’ compensable time using the same legal standard for both sets of laws.  

Continue Reading Oregon Supreme Court Rules That Oregon Law Follows Federal Definition of “Work Time.”

Oregon employers that require arbitration for employment-related disputes recently received some good news from the Oregon Supreme Court.  In Gist v. ZoAn Management, Inc., the Court rejected the plaintiff’s argument that his arbitration agreement was unenforceable because it limited the arbitrator’s authority to award him relief.  Instead, the Court ruled that the arbitration clause was fully enforceable.

The facts of the case are straightforward.  ZoAn Management is a delivery service that hired Gist as a driver and classified him as an independent contractor rather than as an employee.  Gist filed a putative class action lawsuit against ZoAn, claiming that he had been misclassified as an independent contractor and thus did not receive the wages he was entitled to under Oregon law as an employee.  ZoAn filed a motion to compel arbitration pursuant to the Driver Services Agreement (“DSA”) that Gist signed at the outset of his engagement.  The DSA contained a clause requiring that “any dispute, claim or controversy” arising from the DSA be resolved through mandatory arbitration.  Gist argued that the DSA’s arbitration clause was “unconscionable,” a legal doctrine that allows a court to strike a contract provision if it deems the provision so fundamentally unfair that it should not be enforced.  Specifically, Gist pointed to language stating that the arbitrator could not “alter, amend or modify” the terms of the DSA, which Gist argued would prevent the arbitrator from concluding that he was in fact an employee rather than an independent contractor and was therefore entitled to damages. 

The Supreme Court rejected Gist’s argument.  The Court pointed to the language in the DSA granting the arbitrator the authority to resolve “any dispute, claim or controversy” as well as language allowing the arbitrator to strike specific portions of the DSA that were unenforceable while preserving the agreement as a whole.  Read together, these clauses meant that the agreement could not be plausibly read to prevent the arbitrator from deciding the merits of Gist’s claims and awarding him damages or other relief if he prevailed.  ZoAn conceded as much in its arguments to the Court, which likely helped the Court reach its conclusion that the arbitration clause was enforceable.

There are a few “lessons learned” from Gist decision.  First, Oregon courts remain willing to enforce arbitration agreements, even those involving individuals who assert claims under employee-protection laws like Oregon’s wage and hour statutes.  Second, courts will apply a “common sense” reading to the language in an arbitration agreement as a whole instead of focusing narrowly on a particular provision.  Finally, the decision serves as a good reminder that arbitration agreements address how a dispute will be resolved but don’t necessarily change the outcome of the dispute: ZoAn will face the same substantive claim from Gist that it misclassified him as an independent contractor, with the only difference being that the dispute will play out in arbitration rather than in court.

If you have questions about the Court’s ruling, or about requiring employees to resolve disputes through arbitration, please feel free to reach out to any of our labor and employment attorneys.

The U.S. Court of Appeals for the Ninth Circuit, the federal appellate court with jurisdiction over much of the western United States (including Washington, Oregon, California and Idaho), ruled last week that an employee’s temporary impairment can qualify as a disability under the Americans with Disabilities Act (“ADA”). The Ninth Circuit’s decision resolves an important question under federal disability law and could signal a significant change in how employers are required to address employees’ short-term medical limitations.

In Shields v. Credit One Bank N.A., plaintiff Shields was employed by Credit One Bank (“Bank”) as a human resources generalist. Shields underwent biopsy surgery. The biopsy revealed that Shields did not have cancer, but she had a number of post-surgery limitations (e.g., unable to use her right arm to lift, pull, push, type, write, tie her own shoes or use a hair dryer), and these limitations indisputably precluded Shields from performing the essential functions of her position. The Bank put Shields on a short-term leave of absence, but when she was not ready to return to work after two months the Bank terminated her employment. Shields’ lawsuit alleges the Bank violated the ADA by terminating her rather than offering her a reasonable accommodation, specifically, extending her leave of absence to allow her additional recuperation time.

The Bank defended on the grounds that Shields did not have a disability under the ADA because her post-surgery limitations, while significant, were not sufficiently “permanent or long-term” to meet the law’s requirements. The District Court agreed and dismissed Shields’ claim.

The Ninth Circuit reversed. Under the ADA, a disability is defined in relevant part as “a physical or mental impairment that substantially limits one or more major life activities,” without any reference to how long the “substantial[] limit[]” might last. However, the Equal Employment Opportunity Commission’s (“EEOC”) regulations interpretating the ADA clarify that “the effects of an impairment lasting or expected to last fewer than six months can be substantially limiting.” The EEOC has advised similarly in its guidance materials, for example, opining that if an “individual has a back impairment that results in a 20-pound lifting restriction that lasts for several months, he is substantially limited in the major life activity of lifting.” Based on this guidance, the Ninth Circuit had little trouble concluding that the District Court was wrong when it ruled categorically that the short-term nature of Shields’ limitations meant she could not establish that she suffered from a disability.

It is clear from the Ninth Circuit’s opinion that employers cannot reflexively dismiss an employee’s request for an accommodation simply because the impairment is temporary. However, many more questions about employers’ obligations remain unanswered:

  • Is there any minimum duration an impairment must last in order to qualify as a disability? For example, if Shields had only been incapacitated for two weeks would she have met the definition?
  • The Ninth Circuit found that Shields suffered an “impairment” under the ADA by virtue of the surgery itself. It is quite common for a surgical procedure to incapacitate the patient for a period of time. Under what circumstances will such limitations not qualify as a disability?
  • Does the nature of the employer’s obligation to provide a reasonable accommodation differ based on the temporary or short-term nature of the impairment? For example, would an employer have the same obligation to modify an employee’s non-essential job duties for a short-term impairment that it would for a longer-term impairment?

It will be up to future courts to decide these questions, and no doubt many more. Practically speaking, in most instances the best advice for employers is to focus more attention on the nature of the employee’s requested accommodation and less attention on whether the employee’s impairment technically qualifies as a disability. This is true not only because of the outcome in Shields, but because state disability laws may require employers to accommodate short-term disabilities separate and apart from what is required by the ADA under federal law. For example, Washington’s state disability law expressly includes “temporary” impairments.

In the meantime, please feel free to reach out to any of our labor and employment attorneys if you have questions about the Ninth Circuit’s decision or about your obligations to provide employees—including those with temporary impairments—with reasonable accommodations for their disabilities.