USA Regional Employment 2019 Second Edition

Last Updated September 30, 2019

Alabama

Law and Practice

Authors



Bradley Arant Boult Cummings LLP is a national law firm with a global perspective. The firm has more than 500 attorneys serving established regional, national and international companies, emerging businesses, and individuals. The firm's offices – strategically located in Alabama, Florida, Mississippi, North Carolina, Tennessee, Texas and the District of Columbia – provide an extensive geographic base from which to best accommodate clients. The key areas of practice are labor and employment, litigation – class, collective, multidistrict, and single-plaintiff, advice and pre-emptive counsel – and immigration matters. Recognized across the country, its attorneys serve as national, regional, and statewide counsel for clients across many industries. Clients rely on the firm for innovative legal services that reflect a deep understanding of their business objectives. Bradley’s labor and employment practice group provides public and private employers with the comprehensive legal counsel needed to help maximize the competitiveness, productivity, and efficiency of their modern workforces. The firm's attorneys have many years of hands-on experience in handling virtually every type of employment case imaginable. Clients rely on the firm when they face high-stakes, large-scale, and multi-plaintiff claims with the potential to seriously disrupt operations and profitability.

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Alabama is an at-will employment state and, absent an agreement to the contrary, all employment may be terminated by either party, with or without notice and for any reason not prohibited by law. See 2.2 Alternative Approaches to Defining, Structuring and Implementing the Basic Nature of the Entity.

Employers should use offer letters to establish the employment relationship. The offer letter should state the employee’s initial job title, whether the position is exempt or non-exempt under the Fair Labor Standards Act (FLSA), and that the employment is at-will.

If the employer has a handbook (and Alabama law does not require one), it should reiterate the at-will nature of the employment relationship, that the handbook does not create a contract of employment, and that the employer may change the handbook provisions without notice. Best practice is to have a wage policy in the handbook to make clear that the employer will pay non-exempt employees at least the minimum wage for all time worked and will pay overtime for any work over 40 hours in a workweek. The handbook should prohibit working off the clock and provide a complaint procedure for complaints regarding pay.

Employers must comply with the federal immigration laws and complete Form I-9 on all employees. Employers may not discriminate against applicants or employees based on their immigration status but must check to be sure the individual is authorized to work in the USA. The Beason-Hammon Alabama Taxpayer and Citizen Protection Act requires Alabama employers to use E-Verify.

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In the interview process, the employer should avoid any questions that touch upon an applicant’s status as protected under federal law (eg, race, sex, pregnancy, age, disability, religion). Alabama has a law prohibiting age discrimination in employment but otherwise has no state law addressing protected status. Consistent with the federal law, employers should not ask about whether an applicant has a disability, although they may ask if a candidate can perform the essential functions of a position with or without a reasonable accommodation. Alabama does not regulate the use of pre-employment tests (eg, personality, medical, drug) so employers must consider federal guidelines. While not prohibiting questions about wage history during the interview process, Alabama’s Clarke-Figures Equal Pay Act, Act 2019-519 (CFEPA), prohibits an employer from refusing to interview, hire, promote, or employ an applicant or otherwise retaliate against an applicant for refusing to provide wage history information during the interview process. In seeking information about a candidate’s background (ie, credit history, criminal history, etc), employers must comply with the federal Fair Credit Reporting Act. Alabama has no law regulating questions about criminal history.

Alabama permits restrictive covenants, both non-competition and non-solicitation, as set forth in Ala. Code § 8-1-190. Restrictive covenants are not enforceable with professionals (eg, doctors, lawyers, architects) but are otherwise generally enforced by the written terms. Noncompetes are presumed reasonable for up to two years and non-solicitation agreements are presumed reasonable for up to 18 months. Courts generally enforce agreements that comply with the statute and will reform (“blue pencil”) agreements to eliminate noncompliant provisions. An agreement is only enforceable if entered after the employment relationship begins, so the agreement should be signed no earlier than the first day of employment. Employment or continued employment is sufficient consideration for a restrictive covenant.

Organizations may require employees to sign agreements to keep company information – including proprietary information, trade secrets or other confidential information – confidential. The Alabama Trade Secrets Act, Ala. Code § 8-27-1, et seq, governs the protection of trade secrets. In Alabama you may record a conversation as long as one party to the conversation consents.

Alabama’s Clarke-Figures Equal Pay Act, Act 2019-519, prohibits an employer from paying any worker at a wage rate less than that paid to employees of another race or sex for work where the jobs require equal skill, effort, education, experience, and responsibility under similar working conditions. The CFEPA provides an exception for payments made pursuant to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based upon any factor other than race or sex. Other than an age discrimination law, Ala. Code § 25-1-20, et seq, Alabama does not have a state-specific law defining protected categories and follows the federal law. Alabama law prohibits taking action against an employee who files a workers’ compensation claim (Ala. Code § 25-5-11.1). Additionally, an employer may not take action against an employee for serving on a jury and must pay full-time employees their regular wages while serving on a jury (Ala. Code § 12-16-8, 8.1).

Alabama has no specific requirements that employers train employees but best practice is regularly to train supervisors and employees on equal employment and harassment policies and how to make a complaint.

There is no information relevant to this section.

Alabama’s Clarke-Figures Equal Pay Act, Act 2019-519, prohibits an employer from paying any worker at a wage rate less than that paid to employees of another race or sex for work where the jobs require equal skill, effort, education, experience, and responsibility under similar working conditions. The CFEPA provides an exception for payments made pursuant to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based upon any factor other than race or sex. The CFEPA also requires employers (without regard to number of employees) to comply with the federal Department of Labor recordkeeping requirements. Alabama does not require employers to have handbooks. If an employer has a handbook, it should contain a disclaimer that the handbook does not abridge the at-will employment relationship, does not create a contract of employment, and the policies can be changed at any time. An employer’s failure to follow its own policies will be used as evidence of bad faith or pretext in litigation or could lead to a breach of contract claim. Employers with at least 20 employees are covered by the Comprehensive Omnibus Budget Reconciliation Act (COBRA) and must provide notice of a change in insurance coverage to employees or beneficiaries as provided in the law.

Alabama requires employers to post notices regarding the child labor laws, workers’ compensation coverage and unemployment compensation coverage. The Alabama Department of Labor provides all of those posters free of charge on its website (https://labor.alabama.gov/docs/doc_type.aspx?id=2).

Alabama is an at-will employment state and, absent an agreement to the contrary, all employment may be terminated by either party, with or without notice and for any reason not prohibited by law. Alabama has no law regarding the final payment of wages to employees upon termination, although best practice is for employers to pay a final check pursuant to the normal payroll schedule. With commissioned sales representatives, an employer must pay all commissions that are due at the time of termination within 30 days after the termination. Any commissions to a sales representative that become due after the termination date must be paid within 30 days of when the commission becomes due. Failure to pay commissions as required makes the employer liable for treble damages plus reasonable attorney’s fees and court costs (Ala. Code § 8-24-1, et seq).

Alabama does not have a state law governing layoffs or reductions in force. Covered employers must provide notice as required by the federal Worker Adjustment and Retraining Notification (WARN) Act. In general, under WARN, if an employer with at least 100 employees is going to close down or have a reduction in force that will affect at least 50 employees at a single site, it must provide 60 calendar days’ notice to employees and government agencies.

In severance agreements or releases of claims from employees, employers should provide the employee with a reasonable amount of time to consider the offer. Best practice is to recommend to the employee that he or she consult an attorney. If the employer seeks a release of age discrimination claims from a single employee who is at least 40 years old, it should comply with the Older Workers Benefits Protection Act (OWBPA) and, among other things, allow the employee at least 21 days to consider the offer and seven days to revoke any acceptance. If the employer is seeking age discrimination releases from two or more employees, to comply with the OWBPA the severance agreement must provide a 45-day consideration period, a seven-day revocation period, and provide information regarding the employees (by job title and ages) in the decisional unit.

To release a claim for workers’ compensation benefits, the agreement must be approved by a court. An employee may, however, release a claim for retaliation under the Alabama workers’ compensation law, but the release must explicitly reference that law.

Employers may require employees to pursue any claims through arbitration.

If a workforce is represented by a union, the terms of the collective bargaining agreement control the terms and conditions of employment and its termination.

Other than claims under a collective bargaining agreement, breach of contract claims are brought in state court.

Employees may also assert a variety of tort claims, including interference with a business opportunity, fraudulent inducement in the entering of a contract, and defamation. Claims often raised in connection with sexual harassment claims include assault and battery, invasion of privacy, intentional infliction of emotional distress, and negligent hiring, training and supervision.

An employee claiming race or sex discrimination in pay under Alabama’s Clarke-Figures Equal Pay Act, Act 2019-519, can file a lawsuit in Alabama court to recover lost wages plus interest. The CFEPA has a two-year statute of limitations. An employee claiming discrimination based on a status protected under the federal anti-discrimination laws (eg, race, religion, national origin, sex, pregnancy, disability, genetic information) or for retaliation for protected activity generally must file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) within 180 days of the alleged discrimination. The law is not yet clear but the EEOC and some courts have taken the position that the law also prohibits discrimination based on sexual orientation or gender identity. The EEOC will investigate the charge. At the end of that process, the EEOC may issue a determination that the evidence indicates the employer violated the applicable statute, that the evidence does not indicate a violation of the statute, or simply that it is closing its investigation. Regardless of what the EEOC concludes, it will issue the employee a “right to sue” letter, after which the employee has 90 days to file a complaint in court. Successful plaintiffs can recover lost back pay, compensatory and punitive damages (capped based on the size of the employer), and attorney’s fees and costs. The court can also reinstate an employee or award front pay.

To pursue a claim for age discrimination, the employee must file a charge of discrimination with the EEOC within 180 days of the alleged discrimination, receive a right to sue letter and pursue a lawsuit. A successful age discrimination plaintiff can recover lost back pay, liquidated damages in an amount equal to back pay, and attorney’s fees and costs. The court can also reinstate an employee or award front pay.

To pursue a claim for race discrimination under 42 U.S.C. § 1981, an employee does not need to file an EEOC charge but can go directly to court. A plaintiff must file a claim in court within four years of the alleged discrimination. Successful plaintiffs can recover lost back pay, compensatory and punitive damages (uncapped), and attorney’s fees and costs. The court can also reinstate an employee or award front pay.

To pursue a claim for denied leave or retaliation for taking leave under the Family and Medical Leave Act (FMLA), an employee files a complaint in court within two years (three years for a willful violation) of the alleged adverse action. A successful FMLA plaintiff can recover lost back pay, liquidated damages in an amount equal to back pay, and attorney’s fees and costs. The court can also reinstate an employee or award front pay.

To pursue a claim that she was paid disparate wages based on her sex under the Equal Pay Act (EPA), an employee files a complaint in court within two years (three years for a willful violation) of the alleged adverse action. A successful EPA plaintiff can recover lost back pay, liquidated damages in an amount equal to back pay, and attorney’s fees and costs. The court can also reinstate an employee or award front pay.

Employees can bring claims of unpaid wages (including for misclassification or unpaid overtime) under the Fair Labor Standards Act to the federal Department of Labor or file directly in court. To be timely, an employee must institute the action within two years (three years for a willful violation) of the alleged violation. Employees often seek collective status, having the court issue notice to all potential employees and former employees who might have a similar claim. A successful wage and hour plaintiff can recover lost back pay, liquidated damages in an amount equal to back pay, and attorney’s fees and costs.

All federal employment statutes (eg, Title VII, the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, the Age Discrimination in Employment Act, 42 U.S.C. § 1981, EPA, FMLA, FLSA) prohibit retaliation against anyone who engages in protected activity. Protected activity includes opposing any practice made an unlawful employment practice by the law (ie, complaining about discrimination) or making a charge, testifying, assisting, or participating in any manner in an investigation, proceeding or hearing about an alleged unlawful employment practice. A retaliation plaintiff does not have to prove the underlying discrimination claim to succeed on a retaliation claim. A successful retaliation plaintiff can recover the same damages provided by the applicable statute for the underlying discrimination.

Various federal laws also prohibit retaliation against employees for whistle-blowing (eg, Sarbanes–Oxley).

The Alabama Workers’ Compensation Act (Ala. Code § 25-5-11.1) prohibits discharge – but not other adverse action – solely because an employee filed a claim for workers’ compensation benefits.

A person claiming that he or she was retaliated against for refusing to provide wage history information during the interview process can file a lawsuit in Alabama state court under the Clarke-Figures Equal Pay Act, Act 2019-519, and recover lost wages plus interest.

Employees can take claims to the Equal Employment Opportunity Commission, the Office of Federal Contract Compliance Programs (OFCCP; for federal contractors), or the Department of Labor (DOL). Each of these administrative agencies can negotiate resolutions of complaints. The EEOC has a formal mediation process available free of charge. The OFCCP can bar a federal contractor from future contracts. The EEOC and DOL cannot impose any sanctions but can bring a lawsuit based on the complaint.

Both federal and state courts encourage parties to mediate cases.

Parties can have arbitration agreements and dictate the forum.

There are three federal district courts in Alabama that have federal jurisdiction over all claims brought under federal law and diversity jurisdiction over some state law claims if the parties are completely diverse (with regard to state of residence) and meet certain monetary thresholds. Appeals are taken to the Eleventh Circuit Court of Appeals.

Each county in Alabama has a court. Appeals are taken to the Alabama Supreme Court or, for certain claims, to the intermediate court of appeals.

There is no information relevant to this section.

There is no information relevant to this section.

There is no information relevant to this section.

Bradley Arant Boult Cummings LLP

1819 5th Ave N
Birmingham AL 35242

(205) 521-8000

(205) 521-8800

ayuengert@bradley.com www.Bradley.com
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Law and Practice

Authors



Bradley Arant Boult Cummings LLP is a national law firm with a global perspective. The firm has more than 500 attorneys serving established regional, national and international companies, emerging businesses, and individuals. The firm's offices – strategically located in Alabama, Florida, Mississippi, North Carolina, Tennessee, Texas and the District of Columbia – provide an extensive geographic base from which to best accommodate clients. The key areas of practice are labor and employment, litigation – class, collective, multidistrict, and single-plaintiff, advice and pre-emptive counsel – and immigration matters. Recognized across the country, its attorneys serve as national, regional, and statewide counsel for clients across many industries. Clients rely on the firm for innovative legal services that reflect a deep understanding of their business objectives. Bradley’s labor and employment practice group provides public and private employers with the comprehensive legal counsel needed to help maximize the competitiveness, productivity, and efficiency of their modern workforces. The firm's attorneys have many years of hands-on experience in handling virtually every type of employment case imaginable. Clients rely on the firm when they face high-stakes, large-scale, and multi-plaintiff claims with the potential to seriously disrupt operations and profitability.

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