The Fair Labor Standards Act (FLSA) exempts certain white-collar workers from the statute’s minimum wage and overtime requirements. Employers are not required to pay minimum wages or overtime pay to executive, administrative, professional, or certain computer or outside sales employees who satisfy the salary level and other requirements to meet one of the white-collar exemptions. Employees who do not meet the FLSA exemptions (generally blue-collar workers) are entitled to minimum wage and overtime under the FLSA, as well as any state or local minimum wage or overtime requirements.

Employment contracts are not required. Where a written contract does not exist, courts may imply terms governing the employment relationship from statements made in employee handbooks, offer letters, and/or oral representations.

In the American workplace, employment is generally assumed to be “at will”, meaning either the employee or the employer can end the employment relationship at any time. For those employment relationships that are under contract, most are in writing – although, depending on applicable state law, the employment contract need not be in writing to be enforceable. State law determines whether employment is “at will” and may prescribe what an employment contract must include.

There is no federal law that requires employers to provide specific written information to employees at the time of hire. However, some states require employers to disclose information such as the employee’s wages or regular payday at the outset of employment.

Under the federal FLSA, most employers are required to pay overtime – at a rate of time and a half of the employee’s regular pay – for each hour worked that exceeds 40 hours per week, unless the employee is statutorily exempt. Some states expand these terms and conditions to include overtime in excess of eight hours in one day or overtime for work performed on weekends. The FLSA limits the types of flexible scheduling arrangements available. Maximum working hours for minors are imposed by federal and state laws.

Minimum wage requirements are imposed by federal and state laws. The federal minimum wage for employees covered by the FLSA is currently USD7.25 per hour. States and localities may impose minimum wages above the federal minimum wage. The federal government does not otherwise intervene in decisions regarding increases, bonuses or other types of compensation. State laws regulate the timing of compensation payments and permissible deductions from pay.

Vacation Pay

Vacation and vacation pay are subject to very few regulations and are not required under federal law. However, most employers do provide some paid vacation leave, which is regulated by state and/or local law. State laws will often determine whether an employee is entitled to accrued vacation pay at the conclusion of the employment relationship.

Family/Medical Leave

The federal Family and Medical Leave Act (FMLA) requires employers of a certain size to provide unpaid leave for maternity, taking care of a medical condition, or caring for family members. Paid sick leave is not required by federal law. Under the FMLA, an employee is eligible for unpaid leave if the employee has been employed for at least 12 months by the employer and for at least 1,250 hours of service during the previous 12-month period. An eligible employee is entitled to:

• up to 12 weeks of unpaid leave per year;
• continuing health insurance benefits during leave (if already provided by the employer); and
• job protection (which guarantees an employee can return to the same job or its equivalent).

Leave related to a serious health condition may be taken intermittently or on a reduced leave schedule when medically necessary.

Some state and local family leave laws provide more generous leave benefits than the FMLA by:

• covering smaller employers;
• extending the time for unpaid leave;
• requiring paid leave in some instances; and
• permitting intermittent leave for maternity.

Workplace Accommodations

Additionally, depending upon the type of employer, the Americans with Disabilities Act (ADA) requires an employer with the requisite number of employees to provide a disabled employee with reasonable accommodations unless said accommodations would impose an undue hardship on the employer. Reasonable accommodations can include a leave of absence, a modified work schedule, modified duties, transfer to a vacant position, or (in some instances) unpaid leave beyond the 12 weeks provided under the FMLA.

Similarly, the Pregnant Workers Fairness Act (PWFA) requires an employer with the requisite number of employees to provide a reasonable accommodation to a qualified employee’s or applicant’s known limitations related to, affected by or arising from pregnancy, childbirth or related medical conditions, unless said accommodations would impose an undue hardship on the employer. “Related medical conditions” are currently defined broadly.

Covered employers are also required under Title VII of the Civil Rights Act to provide accommodations for an employee’s or applicant’s sincerely held religious practice or belief, unless the accommodation would create an undue hardship for the employer. “Undue hardship” in the religious accommodation context is analysed differently than an accommodation under the ADA or the PWFA, and the US Supreme Court recently clarified the term to require a heightened showing by employers.

The federal PUMP for Nursing Mothers Act (the “PUMP Act”) also requires most employers to provide a private place to pump at work for a year after a child’s birth, along with a reasonable break time to do so.

Confidentiality/Non-disparagement

Traditionally, there have not been limitations on confidentiality and non-disparagement requirements. However, there are increasing concerns with regard to such requirements in the employment arena, especially around the extent to which they might prevent disclosure of harassment allegations. A recent ruling by the National Labor Relations Board (NLRB) limits confidentiality and non-disparagement terms – even if agreed – between employers and non-management employees. This is an area that is still evolving under US law.

Employee/Employer Liability

In general, employees may be held liable for their actions, depending on the nature of the act and the context in which the act occurred. Under the American doctrine of respondeat superior, an employer may be held:

• vicariously liable for an employee’s acts that are committed within the scope of employment; or
• liable for negligence in the hiring, supervision or retention of an employee, as determined by state law.

Although non-competition agreements have been the subject of recent federal regulatory and congressional attention, non-compete law is presently regulated at the state level. In some states, non-compete agreements are governed entirely by common law doctrines, whereas other states have statutory schemes regulating (or entirely prohibiting) non-compete agreements.

A growing number of states have enacted legislation in recent years to limit the use of non-compete agreements or impose additional obligations on employers seeking to enforce them. Among other things, state non-compete statutes may:

• ban non-competes entirely;
• prohibit the use of non-competes for low-wage earners;
• require specific notice to employees;
• set temporal limits on non-compete covenants; and/or
• impose heightened consideration requirements.

Meanwhile, some states have adopted statutes governing the use of non-competes for specific industries or professions, such as physicians. For details of the special rules that apply to non-competes governing physicians in the State of Texas, please refer to the USA – Texas Trends and Development chapter in this guide.

In general, to be enforceable, a non-compete covenant must be tailored to protect a company’s legitimate, protectable business interests and be reasonable in scope. Protectable business interests typically include trade secrets and other confidential information, customer relationships, and company goodwill. Conversely, companies may not use non-compete agreements to stifle fair competition or restrict employee mobility; these would not be considered protectable interests.

In determining whether a non-compete is reasonable, courts typically examine the covenant’s temporal scope, geographic scope, and substantive scope. If a non-compete is determined to be unreasonable, some states give courts broad discretion to reform or “blue pencil” the agreement, whereas courts in other states do not.

Temporal Scope

The permissible length of a non-compete agreement varies greatly from state to state. In states where restrictive covenants are governed by the common law, one to two years is generally within the time period that courts will consider reasonable. Meanwhile, some state statutes limit non-compete agreements to 12, 18 or 24 months.

Geographic Scope

The permissible scope of a non-compete covenant is typically determined on a case-by-case basis and will vary depending on the employer’s industry and the employee’s duties. In general, a non-compete should be tailored to the employee’s footprint and duties for the employer.

By way of example, if the employer’s business is a storefront or a physician’s office that serves customers or patients from a defined geographic area, the geographic scope may be limited to some number of miles or counties surrounding the business. Similarly, if a sales representative’s duties are limited to selling products and services in a particular territory, the geographic scope of the non-compete likely could not extend into locations beyond that territory. On the other hand, if an employer’s business is national in scope and the employee’s duties impact the employer’s operations throughout the entire company, a nationwide non-compete may be permissible in some states.

Substantive Scope

A non-compete should generally be limited to the areas of the employer’s business the employee worked in or acquired confidential information about. Typically, this will require limiting the non-compete covenant to performing the same or similar type of duties at a competitive business. A non-compete that seeks to prohibit an employee from accepting employment in any capacity within a particular industry is likely to be found over-broad in many states.

Reformation/Blue Penciling

If a non-compete is determined to be over-broad in scope, it may be held to be facially unenforceable in many states. In some states, courts have discretion to “reform” the covenant by narrowing it to a reasonable scope. By way of example, if a court determines that a 50-mile non-compete is over-broad, the court may narrow the covenant to a smaller geographic territory. In some other states, courts are strictly limited to “blue penciling” the agreement by deleting words or phrases, but revisions and additions to the language are not permitted.

Regardless of the approach a state takes to curing or invalidating over-broad agreements, employers should generally endeavour to draft their agreements as narrowly as possible while protecting their legitimate, protectable business interests.

Customer Non-Solicits

Like non-compete covenants, customer non-solicitation covenants are governed by the common law in most states – although some states have statutes limiting their use. Non-solicits must also be tailored to an employer’s protectable business interests and be reasonable in scope. However, because the scope of the customer restrictions defines the breadth of the agreement, most states do not require a geographic restriction for non-solicitation covenants.

In general, a customer non-solicit should be limited to the customers the employee had material business contact with and/or acquired confidential information about. Some states require the customer to be an active customer in order to fall within the scope of a non-solicit, whereas others permit non-solicits to extend to active prospects.

Employee Non-Solicits

Employee non-solicitation agreements must also be reasonable in scope and protect the employer’s legitimate business interests. Protecting against employee departures is typically not considered a protectable business interest, standing alone. Thus, a non-solicitation covenant that extends to a company’s entire workforce may be unenforceable in some states. Best practice for drafting employee non-solicits is to limit them to employees with the ability to harm the company while working at a competitor (such as those employees with access to confidential information, customer relationships, etc) and those employees with whom the departing employee had material contact.

Data Protection Laws

Employee data protection laws in other countries are often much more restrictive than in the USA. However, the USA is trending towards more data protection obligations, with an assortment of data protection laws that regulate the collection, use and transfer of employees’ personally identifiable information (PII) and personal health information (PHI). These laws are not limited to protecting active employee information, so employers’ obligations extend to former employees, job applicants, independent contractors, and other non-employee groups (eg, customers) whose personal information they may obtain.

There are a number of federal data protection laws that impact the employment relationship, including:

• the Health Insurance Portability and Accountability Act (HIPAA), which governs health plan and medical provider conduct, and dictates the circumstances under which PHI may be released and to whom it may be released;
• the Genetic Information Nondiscrimination Act (GINA), which covers genetic information;
• the ADA, which limits when an employer may obtain medical information, how such information may be used and disclosed, and how it may be stored and retained;
• the FMLA, which limits the use and disclosure of medical information collected to administer leaves under the law;
• the National Labor Relations Act (NLRA), which prohibits employers from interfering with workers’ rights to engage in concerted activity, including such activity through social media; and
• the Fair Credit Reporting Act (FCRA), which applies to those who use consumer reports, including background checks conducted on applicants and employees.

Another federal law, the Privacy Act 1974, limits the type of information that federal government employers may keep on their employees.

Personal Information Requirements

Most US states impose requirements related to personal information. Every state has enacted laws defining PII and requiring notification of security breaches involving PII. Many states have enacted laws that require companies to keep PII secure and to destroy or dispose of PII – or otherwise make it unreadable or undecipherable – once they are finished with PII they hold.

Many states have also enacted laws to protect social security numbers, with limited exceptions for employers, and some have laws providing expanded protections to PHI or other health information. A significant number of states have also enacted employee social media privacy laws, which limit when and how employers may use social media information about their employees.

Certain states have laws that represent new approaches to data protection and have become a model for similar legislation across the nation. One such example is Illinois, which imposes conditions on the collection and use of biometric information, including fingerprints, retina scans and facial geometry scans (which could be used to identify individuals through photographs). The Illinois Biometric Privacy Act (BIPA) has a number of requirements, such as written consent and disclosure of policies related to biometric data collection and usage. It also allows private individuals to bring suit and recover damages for violations.

Elsewhere, nearly half of US states have established broad consumer privacy laws, but to date the laws generally provide an exclusion for employment information outside California. In contrast, the California Consumer Privacy Act 2018 (CCPA), as amended by the California Privacy Rights Act 2020, established rights for California residents, including requirements for employers with regard to the information they hold on employees, applicants and contractors. Employers must:

• develop a comprehensive programme to monitor how data is collected, used, shared and destroyed throughout the employment relationship;
• communicate with California residents; and
• process rights requests when received.

New York City and several states place restrictions on the use of AI when processing employment information, particularly in the hiring process. These laws and ordinances place constraints – as well as notice and, in some cases, consent obligations – on those employers using tools that conduct automated decision-making.

Laws concerning personal information and data protection are changing rapidly. In addition to proposed national legislation, new rights and duties for employers are expected in a number of states during the coming years.

US employers are prohibited from hiring or continuing the employment of a worker who is not authorised to work in the USA. The Immigration Reform and Control Act of 1986 (IRCA) places the burden of immigration compliance on employers and prohibits the hiring, recruiting, or referring for a fee of individuals who are not authorised to work in the USA. It also requires employers to confirm the identity and employment eligibility of new employees.

Subject to very few exceptions, a foreign worker must have a work visa permitting them to work in the USA. Employers have the option of participating in the immigration sponsorship process. However, they may not directly ask about a candidate’s national origin, citizenship, or immigration status during the hiring process. Instead, employers must use neutral questions to determine whether the applicant requires immigration sponsorship to begin working or to continue employment in the future. Acceptable questions include:

• “Are you legally authorised to work in the USA?”
• “Do you now, or will you in the future, require immigration sponsorship for work authorisation?”

If a candidate answers affirmatively to the second question, the employer may ask more direct questions about the applicant’s immigration status and work authorisation in order to make an informed hiring decision.

Foreign nationals can obtain non-immigrant (temporary) visas and immigrant (permanent) visas to work in the USA. Most foreign nationals initially enter the USA on a non-immigrant visa. Some common employer-sponsored nonimmigrant visas include the H-1B, L-1 and TN non-immigrant visas.

Employers are free to allow employees to work in mobile settings as long as the arrangements comply with generally applicable federal, state and local laws – for example, workers’ compensation, the Occupational Safety and Health Act (the “OSH Act”), the FMLA, and the ADA, as well as poster and notice requirements.

Wage and hour issues, as well as leave issues, are top challenges for employers dealing with remote employees. Companies should use a system for hourly employees that pays for all scheduled time, requires accurate reporting of worked time, and does not discourage or impede accurate reporting. For jurisdictions with meal break laws, such as California, employers should set policies and expectations so that remote employees receive these breaks as required.

Working temporarily in a location can trigger paid sick leave obligations for remote employees. By way of example, employees working for 30 days in a year in California gain coverage of the state’s paid sick leave law. Remote employees working in Chicago and New York must receive sexual harassment prevention training under state and local laws.

Mandatory federal posters for agencies and laws (the Equal Employment Opportunity Commission (EEOC), the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Occupational Safety and Health Administration (OSHA), and the FLSA) must be posted or provided in a way for employees in mobile settings to access them, including on an intranet or directly via email. State and local laws and agencies require certain posters as well, so employers should consult and research each applicable state labour department.

For purposes of workplace safety, OSHA currently has a policy that it does not have any regulations regarding remote work from a home office and it will not conduct inspections of worker home offices. However, OSHA will enforce record-keeping requirements for work-related injuries if they occur in the home of remote workers. As a result, companies should continue to keep records of such injuries and ensure employees in mobile settings attend applicable safety training.

Employers should be mindful of cybersecurity issues for mobile employee arrangements. Options to mitigate risks include:

• use of an encrypted virtual private network (VPN);
• requiring use of company equipment and not allowing personal equipment;
• limiting or banning external drives; and
• restrictions on or monitoring of printing.

In the past, many private sector employers traditionally did not utilise sabbaticals outside academia and other specialised areas. However, employers are using sabbaticals more frequently and giving them greater consideration in the post-pandemic era in order to attract and retain talent that is more mobile and willing to change jobs.

Sabbatical details, requirements and eligibility vary greatly and mostly depend on the discretion of the employer, unless a union’s collective bargaining agreement addresses the issue. Federal, state and local laws do not require sabbaticals, but various obligations or questions may be triggered by the use of sabbaticals.

Typical factors and decisions for sabbaticals include:

• which employees are eligible?
• length of employment before eligibility;
• length of sabbatical;
• whether the sabbatical is fully paid, partially paid, or unpaid; and
• the availability of benefits during the sabbatical.

Continued employee qualification and eligibility for health and other benefits are among the most challenging issues when it comes to sabbaticals. Many health insurance programmes require continued full-time employment and/or continuous service. Employees on sabbatical may be unwilling or unable to forgo such benefits, so employers will have to ensure the benefits can apply to sabbaticals or find another acceptable alternative. The same challenges can arise for insurance coverage. Employers should check to determine if employees on sabbatical can maintain health, disability and life insurance, if a modification to policy requirements can be made, or a substitute policy can be issued. Employers may also want to review contracts and policies relating to deferred compensation and stock vesting so that a sabbatical does not become a trigger for payment unexpectedly.

Many companies are using “new work” approaches, including wellness programmes, to attract and retain talent. These approaches have some benefits and potential pitfalls. One trend seems to have hit its nadir – open floor plans seems to be diminishing since the pandemic (the set-up was conducive to virus spread), as employers and employees are realising that boundaries and privacy can help with productivity and morale. The new work approach highlights autonomy, technology integration, less hierarchy, additional collaboration, and flexibility.

One concrete example of a new work approach is unlimited paid time off (PTO) or unlimited vacation. This has been attractive to some employers and companies because it highlights autonomy and responsibility. However, one challenge has been that some employees feel they have less ability to use PTO, whereas some employers have encountered what they believe to be excessive use of the policy. Unlimited PTO can also create unexpected legal challenges. In jurisdictions requiring payment of PTO or vacation upon termination, companies can face claims for large payments on the basis of unlimited PTO. Employers using this approach should consider adding provisions that require some employer approval on the timing and length of PTO, criteria for any payout at termination, and the interaction with other leave (medical or family).

Although wellness programmes can help with workforce morale, there are potential legal issues to be aware of. Making wellness programmes voluntary instead of mandatory helps avoid some risks, as does being careful about the type and amount of information requested and collected.

The NLRA, enacted in 1935, was designed to provide rules to limit “industrial warfare” following a period of violence and unrest between employers and employees. The NLRA protects employees’ rights to engage in “protected, concerted activity” in the workplace regarding the terms and conditions of their employment and, if they choose, to organise a union.

Although 29.5% of American employees belonged to unions in the 1960s, union membership in the private sector has declined steadily since then and currently stands at just 6%. In contrast, the percentage of union employees in the public sector has grown markedly in the past 20 years and currently stands at 33.1%.

The NLRA prohibits private sector employers from interfering with, restraining or coercing employees in the exercise of their rights to organise a union or their rights to engage in other concerted activities for mutual aid or protection. The NLRA also protects employees’ right not to organise a union and not to engage in other concerted activities.

Section 9 of the NLRA prescribes general rules concerning the election process. The NLRB and the courts have also developed processes through which employees have the opportunity to cast an informed vote in an election to determine a union’s representation status.

In December 2023, the NLRB issued new guidelines on the conduct of representation elections, thereby revising rules implemented under the prior administration that were considered by unions to have tilted the process in favour of employers. The newly revised rules seek to advantage union interests in the election process. This is not surprising, as the current administration is openly pro-union and decisions from the NLRB reflect these pro-union leanings.

Once elected, the role of the union is to represent the interests of the employees in the bargaining unit fairly and negotiate the terms and conditions of employment with the company. These include wages, benefits, and other terms and conditions such as seniority, overtime and work schedules.

Under the NLRA, subjects of bargaining are divided into two categories:

• “mandatory” (which the parties must negotiate); and
• “permissive” (which neither party can be forced to negotiate).

When employees choose a union to represent them, the employer and the union are required to meet at reasonable times and places to negotiate in good faith in order to reach a binding agreement that sets forth the terms and conditions of employment. The employer and union are not required to adopt any proposal made by the other; however, they are required to bargain in good faith in order to try to reach an agreement. Failure to reach an agreement may result in a strike or lockout or could prompt the union to resort to other economic weapons.

If the parties do not reach agreement despite good-faith bargaining, the employer may declare an impasse and unilaterally implement its bargaining proposals. The union could, however, file an unfair labour practice charge with the NLRB if it contends the employer failed to bargain in good faith. The NLRB can order the employer back to the bargaining table and to rescind any unilateral changes the employer may have made based on a claim of impasse.

For workforces that are organised, bargaining typically takes place at the company level. However, some employers bargain with unions through associations, which may result in a uniform agreement for certain types of work performed by numerous different employers (eg, across an industry such as construction).

Employment is generally presumed to be “at will”, meaning either the employee or the employer can end the employment relationship without notice at any time for any reason – be it good or bad – or for no reason at all. There are four major exceptions to the “employment at will” doctrine – namely, where there is:

• a dismissal due to discrimination or retaliation that is in violation of a federal, state or local law;
• an express or implied contract, including a collective bargaining agreement;
• an implied covenant of good faith and fair dealing; and
• a discharge that would violate the state’s public policy – for example, firing an employee for seeking worker’s compensation benefits following a work-related injury.

The laws surrounding these exceptions vary considerably by state.

Unless provided for by the terms of an employment contract or collective bargaining agreement, procedures do not differ depending on the grounds for dismissal.

Lay-Offs

In the USA, the term “lay-off” is often used for instances in which an employer eliminates a number of jobs owing to economic reasons or a business need to restructure.

Although a group of at-will employees may generally be dismissed by an employer at any time, the federal Worker Adjustment and Retraining Notification Act (the “WARN Act”) and certain state law equivalents require employers to give employees advance notice of a lay-off or plant closing in some circumstances. In addition, if an employer seeks a release of federal age discrimination claims in connection with an exit incentive programme or other group employment termination, the employer must provide certain disclosures to the employees being separated. Lastly, an employer may have additional obligations when dismissing a group of employees under a collective bargaining agreement or – in some cases – if the employee works in the public sector.

Unless specified in an employment contract or collective bargaining agreement, there generally are no notice requirements. There is, however, one caveat – in some circumstances involving a plant closing or mass lay-off, an employer may have to give employees 60 days’ notice of the lay-off under the WARN Act or an applicable state law equivalent. Some of these analogous state laws are more expansive in terms of coverage and employee rights.

Similarly, except where provided for by an employment contract, severance pay is not required. Employees are generally not entitled to compensation on dismissal beyond pay up until their final day of employment and any other business expenses owed to them at the time of dismissal. Depending on the law of the state in which the employee works, an employee may be entitled to receive temporary and partial wage replacement (known as “unemployment compensation”), which is generated by the state government from a special tax paid by employers.

Given that employment is generally presumed to be “at will”, an employer may dismiss an employee for any reason, with or without cause or notice. The only exceptions are where:

• any applicable employment contract or collective bargaining agreement provides otherwise; or
• the employee is dismissed for a reason proscribed by federal, state or local law (eg, an employee’s age, disability, race, sex, or national origin).

In a collective bargaining relationship, there are recognised principles of just cause. The employee must have notice of the rule that is the subject of the dismissal, the rule must be reasonable, the employer must have conducted a fair investigation and ascertained evidence of the violation, and the penalty must fit the “crime”. The determination of just cause must include an assessment of the prior points, in addition to the employee’s seniority and work record.

Termination agreements are permissible. In general, there are no specific procedures or formalities required for termination agreements.

The Older Worker Benefit Protection Act (OWBPA) provides procedural safeguards where an employer seeks a paid release of federal age discrimination claims. Additionally, special rules exist for the release of claims based on violations of the FLSA, which requires minimum wage and overtime pay for most employees. Several federal agencies, such as the SEC and the NLRB, have also brought enforcement actions against employers whose release agreements impede a person from exercising their right to provide truthful information to governmental or regulatory bodies.

There is no specific protection against dismissal for particular categories of employees, except where provided by the anti-discrimination laws, the NLRA, or other federal or state statutes.

Employment is generally assumed to be “at will”, meaning either the employee or the employer can end the employment relationship at any time for any or no reason; this is determined by state law. However, there are four common exceptions, which are discussed in 7.1 Grounds for Termination. Therefore, employees may have grounds for a wrongful dismissal claim in situations where employment is terminated as a result of whistle-blowing, filing a worker’s compensation claim, or refusing to engage in unlawful conduct.

The remedies available depend on the law under which those claims are asserted. However, they generally include some combination of back pay, lost benefits, front pay, liquidated damages, compensatory damages (including emotional distress damages), punitive damages, and attorney’s fees and costs – in addition to equitable relief such as reinstatement.

Discrimination

Employment discrimination is prohibited by a variety of federal, state and local laws. Federal law prohibits employment discrimination based on the protected characteristics of race, colour, national origin, sex (which includes sexual orientation and gender identity), pregnancy, religion, age, disability, citizenship status, genetic information, and military affiliation. Federal law also prohibits retaliation against employees who oppose unlawful discrimination (or who participate in proceedings challenging unlawful discrimination) or who seek benefits under federal law (eg, under the ADA, the PWFA, the PUMP Act or the FMLA).

Most state and some local laws contain analogous prohibitions. Certain jurisdictions have expanded the list of protected categories to include such characteristics as marital and/or familial status, political affiliation, language abilities, use of tobacco products, firearm ownership, and public assistance status, as well as height, weight, hairstyles and personal appearance.

Prohibited Practices

Prohibited discriminatory practices generally include bias in all terms, conditions and privileges of employment, including hiring, promotion, evaluation, training, discipline, compensation, classification, transfer, assignment, lay-off and discharge. Where disadvantageous to the employee, these activities are often referred to as “adverse actions”. To demonstrate discrimination, an employee must establish a connection between the protected characteristic and the adverse action or condition.

Prohibited discriminatory practices also include failing to reasonably accommodate an employee’s request for a disability or religious accommodation. The standards for evaluating each type of accommodation differ and religious accommodations are an evolving area under US law.

Harassment

Workplace harassment is also unlawful. Although many harassment cases involve allegations of sexual harassment, harassment based on other protected characteristics is also actionable. Employer liability in harassment cases depends on:

• who engaged in the harassment;
• whether the harassment resulted in a tangible employment action; and
• the employer’s efforts to prevent and correct the harassment.

Retaliation

It is unlawful to retaliate against employees who raise concerns about unlawful discrimination or harassment. An employee need not prove that discrimination occurred in order to prove that an employer’s response to the employee’s complaints constituted unlawful retaliation. Rather, an employee simply needs to prove a causal connection between the complaints and the adverse action.

Proving Discrimination

Generally, employees must first prove that:

• they are a member of the protected class;
• they were qualified for the job and/or satisfactorily performed the job;
• they were subjected to an adverse employment action; and
• the adverse employment action occurred under circumstances giving rise to an inference of discrimination.

The employer must then establish that the adverse employment action was taken for a legitimate, non-discriminatory reason. If the employer does so, the employee must prove that the reason offered by the employer was a cover-up (or pretext) for discrimination. An employee is also generally required to show that the employer intended to discriminate, except when claiming a particular practice or policy has a disparate impact based on a protected characteristic.

There are also affirmative defences to discrimination claims that may apply in limited circumstances and depending on the nature of the claim. Employers are generally allowed, for example, to discriminate on the basis of sex, age, religion or national origin if such a characteristic constitutes a bona fide occupational qualification (BFOQ). A BFOQ exists when a specific characteristic is necessary for the performance of the job. Gender may be a relevant factor, for example, in job performance for a model of women’s clothing. The BFOQ defence is very narrowly restricted and should not be relied on in most situations.

Remedies available for discrimination claims depend on the law under which those claims are asserted, but generally include some combination of back pay, lost benefits, front pay, liquidated damages, compensatory damages (including emotional distress damages), punitive damages, and attorney’s fees and costs – as well as equitable relief such as reinstatement.

Employment disputes may include in-person or virtual depositions. Virtual court proceedings are increasingly permitted in the USA, including court conferences, settlements and mediations, and trials. Even where the proceeding itself is in person, more judges are allowing witnesses to appear virtually. This is generally a court- or judge-specific determination – although the parties may agree to conduct depositions or mediations virtually.

Employment litigation is a robust practice, with tens of thousands of lawsuits filed by employees annually. Most employment lawsuits take place in federal court pursuant to federal statutes, such as Title VII, the ADA and the FLSA. However, many employment claims may also be filed in state court, and certain state statutory schemes make state court litigation more common than in other states.

In a routine single-plaintiff employment discrimination or retaliation case, an employee typically must file a charge of discrimination with the EEOC (or analogous state agency) prior to filing suit. The agency will investigate the claim and may choose to litigate the claim in federal court on behalf of the employee or it may issue the employee a “right to sue” letter authorising the employee to file suit in court.

Class actions are also permitted for some employment claims. Whether to certify a class action is often a hotly contested issue, with significant financial implications in certain types of cases, such as wage and hour disputes. In determining whether to certify a class, courts consider a number of elements, including whether there are common issues of law or fact that apply throughout the proposed class.

Arbitration agreements are used by many employers as an alternative to litigation. Federal law generally favours the enforcement of arbitration clauses and courts will often compel the parties to arbitrate where an arbitration agreement exists. In addition, employers generally may enforce arbitration agreements containing class action waivers. However, certain types of labour and employment claims (eg, sexual harassment and assault claims and unfair labour practice claims) are not subject to arbitration.

A number of employment statutes, including federal anti-discrimination laws, typically permit the prevailing party to recover attorney’s fees and costs.