Author Archives: Mark Wiletsky

April 30, 2024

Residence or Incorporation – A Look at Where Guidelines Matter When Drafting Severance Agreements

Mark Wiletsky

Question: When crafting a severance agreement, should you follow the guidelines of the state the employee resides/works in or the state where the company is incorporated?

Answer: The answer depends on a number of factors. Often, companies are incorporated in a state in which they have no presence or operations, e.g., Delaware. Although courts will sometimes allow parties to select a law to govern agreements, including severance agreements, the employee may be able to challenge the agreement if it does not comply with the state in which he or she lives or works. In fact, some states, such as California and Colorado, have certain laws that apply to workers within their state, regardless of what the agreement says. If the agreement is drafted to comply with the laws of the state of incorporation, but not the state in which the employee worked, the release might not be effective or enforceable. Indeed, in the event of a dispute, it can be difficult to justify why the law in Delaware, for example, should apply to a worker in Colorado if the company has no operations in Delaware and the employee did not live or work there. Therefore, the best practice is to review the laws of the states in which the employee lives or works, and where the company is headquartered, to ensure the agreement complies with the laws of both states. If the laws conflict, consider drafting the agreement to comply with the more restrictive laws to ensure the agreement will be enforceable.

December 1, 2023

A Reminder for Employers: Review Your Separation Agreements

Mark Wiletsky

by Mark Wiletsky

Companies routinely use separation agreements with departing employees. Through those agreements, the employee receives some type of separation benefit (typically a payment or severance) in exchange for waiving and releasing any potential claims against the company.

The goal is to avoid an existing or potential dispute, claim, or lawsuit. But if companies don’t routinely review and update those agreements, they risk the agreement being challenged or invalidated. Even worse, companies are sometimes investigated and forced to pay fines or penalties for provisions in the agreements. A recent settlement announced by the Securities and Exchange Commission (SEC) provides a strong reminder to employers to regularly review and update agreements used with employees.

Facts

On September 19, 2023, the SEC announced a settlement with a real estate services firm. According to the announcement, the company violated the SEC’s whistleblower protection rule with separation agreements it used between 2011 and 2022. The agreements contained a common provision: Employees had to affirm they hadn’t filed a complaint about the company with any state or federal court or local, state, or federal agency. These types of representations are typically included in separation or settlement agreements to ensure that any pending complaint or charge is resolved in conjunction with the separation or settlement agreement. Read more >>

November 28, 2023

Accommodating a Request for Worship Space in the Workplace

Mark Wiletsky

by Mark Wiletsky

Question: Do employers need to provide a space for employees to worship and/or pray in the office?

The short answer is: Maybe. You must reasonably accommodate employees’ sincerely held religious, ethical, or moral beliefs or practices unless doing so would impose an undue hardship.

For decades, courts held that employers could deny such requests under Title VII of the Civil Rights Act of 1964 if the accommodation would impose more than a “de minimis” cost or burden. In June 2023, however, the U.S. Supreme Court “clarified” that standard. In Groff v. DeJoy, the Court held that employers can deny requests for religious accommodation only if the accommodation would result in “substantial increased costs in relation to the conduct of [an employer’s] particular business.” The Equal Employment Opportunity Commission (EEOC) has provided similar guidance, stating that employers shouldn’t try to suppress all religious expression in the workplace. Read more >>

June 8, 2023

Shifting Landscape: New Laws Significantly Impact Colorado Employers

Mark Wiletsky

by Mark Wiletsky and Joshua Kohler

During this legislative session, Colorado enacted more protections for employees in the workplace, including redefining what constitutes unlawful harassment, restricting confidentiality agreements, expanding the ability to use paid sick leave, and addressing job posting requirements.

Governor Polis signed into law the Protecting Opportunities and Workers’ Rights (POWR) Act (SB23-172), Additional Uses of Paid Sick Leave (SB23-017), and the Ensure Equal Pay for Equal Work Act (SB23-105). POWR and Additional Uses of Paid Sick Leave go into effect August 7, 2023 and Ensure Equal Pay for Equal Work Act goes into effect January 1, 2024. These laws, and POWR in particular, make considerable changes to the obligations and requirements of employers in Colorado. Now is a good time to revisit any form agreements used with current or prospective employees (e.g., settlement agreements, employment agreements, etc.) and employee handbooks, update anti-harassment and complaint procedures and plan for anti-harassment training, and assess your internal job posting process.