Articles

 Secretly recording a telephone conversation without the consent of all parties participating in the conversation, such as between an employee and supervisor, violates Connecticut civil law. Conn. Gen. Stat. § 52-570d makes it unlawful for anyone to record a phone conversation without the consent of all parties to the communication. Such consent must be obtained in advance, in writing, or verbally at the start of the recording, or through automatic tone warnings throughout the conversation.

 While there are several exceptions to the two-party consent rule most do not apply to the workplace. One exception that may, however, permits recipients to record calls that convey threats of extortion, bodily harm or other unlawful requests or demands, without the consent of the caller.

 Connecticut’s civil law is more restrictive than either Federal or state criminal law, which both permit the recording of a phone conversation with the consent of a single party. Any person aggrieved by a violation of the state civil law may recover damages, costs and attorneys’ fees.

 The rules governing the secret recording of a face to face discussion are less restrictive. While there are no civil statutory restrictions, under both federal and state criminal law at least one party engaged in the discussion must consent to the recording. Also, if a third party were to record a discussion between two other people at least one of the participants must consent.

 Employers may also have policies that prevent the recording of any discussions. Such a policy would allow the company to take action against the employee for breaching its policy, but the recording could probably still be used in subsequent legal proceedings, provided it was
legally obtained.

 Secretly recording a telephone conversation without the consent of all parties
participating in the conversation, such as between an employee and supervisor, violates
Connecticut civil law. Conn. Gen. Stat. § 52-570d makes it unlawful for anyone to record a
phone conversation without the consent of all parties to the communication. Such consent must
be obtained in advance, in writing, or verbally at the start of the recording, or through automatic
tone warnings throughout the conversation.

 While there are several exceptions to the two-party consent rule most do not apply to the
workplace. One exception that may, however, permits recipients to record calls that convey
threats of extortion, bodily harm or other unlawful requests or demands, without the consent of
the caller.

 Connecticut’s civil law is more restrictive than either Federal or state criminal law, which
both permit the recording of a phone conversation with the consent of a single party. Any person
aggrieved by a violation of the state civil law may recover damages, costs and attorneys’ fees.

 The rules governing the secret recording of a face to face discussion are less restrictive.
While there are no civil statutory restrictions, under both federal and state criminal law at least
one party engaged in the discussion must consent to the recording. Also, if a third party were to
record a discussion between two other people at least one of the participants must consent.

 Employers may also have policies that prevent the recording of any discussions. Such a
policy would allow the company to take action against the employee for breaching its policy, but
the recording could probably still be used in subsequent legal proceedings, provided it was
legally obtained.

 The Second Circuit Court of Appeals recently held that employees bringing claims of
retaliation under the federal FMLA need only prove that their exercise of FMLA rights was a
“motivating factor” in an adverse employment action, and not the “sole factor.” Woods v Start
Treatment and Recovery Centers. This case reverses the Second Circuit’s previous position on
the issue.

 The plaintiff worked as a substance abuse counselor for defendant. She took FMLA
leave to deal with a legitimate medical condition. Within 3 weeks of returning to work from
leave, she was fired. Defendant claimed it was due to her well documented poor performance.
Plaintiff argues it was due to her exercise of FMLA rights.

 The District Court found for the company. The Second Circuit vacated the decision
because it concluded the District Court relied on the wrong section of the law, and the incorrect
standard of proof, when rendering its decision.

 The Circuit Court reviewed two sections of the FMLA that arguably applied. Section
2615(a)(2), which was used by the District Court, prohibits an employer from discharging or
discriminating against an employee for opposing any practice made unlawful by the Act. Under
this section, the District Court held that the “but for” standard applied, and an employee must
show that the sole reason for termination was retaliation for exercising FMLA rights.

 The Second Circuit, however, relied on section 2615(a)(1), which makes it illegal to
interfere with, restrain, or deny any right provided by the law. It discussed how retaliation for
exercising actual FMLA rights, in contrast to retaliation for opposing some practice, is more
aptly covered under 2615(a)(1) than (a)(2). In addition, it also ruled that the lower “motivating
factor” standard applies to section 2616(a)(1), and not the higher “but for” standard. The Court
left open whether the “but for” or “motivating factor” standard applies to section 2615(a)(2)
retaliation claims based on the opposition theory.

 As a result of the Court’s decision, plaintiff’s claims will again be examined by the
District Court using the newly enunciated standard to see if her exercise of FMLA rights was at
least a motivating factor in the termination decision. If so, she wins, as she no longer has to
prove it was the sole factor.

 The ruling eases the burden employees must meet when bringing retaliation claims after
exercising FMLA rights.

 The Connecticut Supreme Court recently released an opinion making it easier to meet the
independent contractor test under Connecticut law. Southwest Appraisal Group v Administrator,
Unemployment Compensation Act. The Connecticut Department of Labor traditionally followed
the ABC test in determining whether a worker was an employee or independent contractor for
unemployment compensation purposes. Part C of the test requires an employer to prove that the
worker is customarily engaged in an independently established trade, occupation, profession or
business of the same nature as that involved in the service provided to the employer. One
element of that test was whether the worker had customers beyond the employer. The Supreme
Court, however, has now held that while the number of customers may be considered there is no
minimum requirement that a worker have multiple customers to be considered an independent
contractor.

 More specifically it stated, “we conclude that evidence of the performance of services for
third parties is not required to prove part C of the ABC test, but rather is a single factor that may
be considered under the totality of the circumstances analysis governing that inquiry.”

 In the instant case, the employer was engaged in appraising damage claims for various
insurance companies. To do so, it contracted with various independent appraisers who
performed the appraisals on a flat fee basis. While some of these subcontractors had multiple
clients, others worked exclusively for the employer. Regardless of the number of customers each
had, they all were required to obtain and pay for a state license, professional liability insurance,
and equipment. The employer did not provide them with any benefits, training, office space,
uniforms, or business cards. The appraisers each had their own home office, were given
flexibility in performing their duties, and were not subject to tax withholdings. They were issued
a form 1099 at year-end, instead of a W-2. All bore the risk of making a profit or loss.

 The lower court had ruled in favor of the Department of Labor, who argued that the
appraisers who worked solely for the employer were economically dependent on it, and would
not survive without that single client. Therefore, they were not “customarily engaged in an
independent business,” and thus flunked part C of the test.

 In reversing the lower court, the Supreme Court noted that part C of the test seeks to
discern whether a worker is wearing the hat of an employee of the employing company, or is
wearing the hat of his own independent enterprise.” In making that determination, the ruling
makes clear there is no specific requirement that a worker have more than one client. Instead,
regulators must use a totality of the circumstances test and consider a number of factors in
addition to the number of clients. These include: (1) the existence of state licensure or
specialized skills; (2) whether the putative employee holds himself or herself out as an
independent business through the existence of business cards, printed invoices, or advertising;
(3) the existence of a place of business separate from that of the putative employer; (4) the
putative employee's capital investment in the independent business, such as vehicles and
equipment; (5) whether the putative employee manages risk by handling his or her own liability
insurance; (6) whether services are performed under the individual's own name as opposed to the
putative employer; (7) whether the putative employee employs or subcontracts others; (8)
whether the putative employee has a saleable business or going concern with the existence of an
established clientele; (9) whether the individual performs services for more than one entity; and
(10) whether the performance of services affects the goodwill of the putative employee rather
than the employer.

 While the number of customers still counts when making the analysis and becomes more
significant when other indicia of independence is lacking, it no longer is a per se requirement of
meeting prong C of the ABC test.

 Employers should remain cautious, however, when it is the sole employer of the putative
independent contractor as federal laws enforced by the U.S. Department of Labor, EEOC, and
IRS use different tests that focus more on direction and control, along with the economic realities
of the relationship, and those regulators may come to different conclusions when an employer is
the worker’s sole source of income.

 On December 30, 2016, the Connecticut Supreme Court held employees bringing claims
of discrimination under the Connecticut Fair Employment Practices Act (“CFEPA”) are not
entitled to punitive damages. Tomick v. UPS, 324 Conn. 470 (2016). In Tomick, a jury awarded
$500,000 in punitive damages to the plaintiff, Michael Tomick after finding his employer,
United Parcel Service, discriminated against him due to a disability. The trial court set aside the
punitive damage award. That decision was appealed and upheld by the Appellate Court. The
Supreme Court affirmed the Appellate Court’s decision.

 In making its decision, the Supreme Court found that Conn. Gen. Stat. § 46a-104 does
not authorize an award of punitive damages. Instead, it permits a court to grant “such legal and
equitable relief which it deems appropriate including, but not limited to temporary or permanent
injunctive relief, attorney’s fees and court costs.”

 While this decision was welcomed by employers, the federal Civil Rights Act, and
Americans with Disabilities Act, specifically permit punitive damages to be awarded. Other
employment laws also permit punitive damages under certain circumstances, such as retaliation.
Therefore, most employers still face punitive damages when their actions are considered by a
jury to be sufficient to warrant this extraordinary punishment.

 The duty of loyalty is a common law concept whereby employees owe their employer a
certain degree of allegiance by not competing against them while employed, or obtaining
monetary gains that are rightfully those of the employer. The Connecticut Supreme Court
recently reviewed the obligations employees owe their employer, and the damages available
should employees breach their duty. Wall Systems v. Pompa, 324 Conn. 718 (2017).

 Here, the plaintiff, William Pompa, while working as an employee for Wall Systems,
secretly worked as an independent contractor for one of its competitors, and took kickbacks from
some of its subcontractors. The employee was fired and litigation ensued. The trial court found
for Wall Systems, and both parties appealed the amount of damages awarded by the court. The
employer argued that it was entitled to greater damages while the employee claimed the award
was excessive.

 More specifically, the employer believed it was entitled to recover all wages paid to the
employee during the term of his employment, as well as any monies paid by his competitor to his
employee (forfeiture), and the amount of any kickbacks received (disgorgement). The trial court
disagreed and instead awarded Wall Systems its provable damages. The Supreme Court upheld
the trial court and found that there is no standard measure of damages, and that the trial court has
equitable discretion in awarding relief.

 The Supreme Court went on to discuss the duty of loyalty and the range of potential relief
available when it is breached. The general principle is that an agent must act solely for the
benefit of the principal in matters connected to the agency. This includes a duty to not compete
or disclose confidential information. Also, an employee must refrain from acquiring material
benefits from third parties in connection with transactions undertaken on the employer’s behalf,
including secret commissions or kickbacks. An employee can be found to be disloyal even if the
unlawful acts do not depend on the use of an employer’s confidential information. Further, the
scope of the duty varies based on the nature of the relationship. Employees occupying a position
of trust and confidence owe a higher duty than those performing low-level tasks. Also, greater
access to confidential information increases the duty.

 Remedies include actual damages suffered by the employer, forfeiture of compensation
paid to an employee during the period of disloyalty, and disgorgement of any amounts received
from third parties related to the disloyalty, even if an employer has not suffered any actual
damages. In making its award, courts are permitted to consider a wide range of factors,
including the employee’s position, duties and degree of responsibility; compensation; the
frequency, timing and egregiousness of the disloyal acts; the effect the acts have on the business;
and the degree of planning undertaken to implement the disloyal acts.

 Employers should consider bringing claims for breach of the duty of loyalty when
employees are found to be working against the company’s interests, especially when there are no
non-compete, confidentiality, or other restrictive covenant agreements in place to otherwise
provide protection.

 Effective November 29, 2016 federal contractors are required to provide employees with
up to 56 hours of annual paid sick time. Executive Order 13706. Since Connecticut already
requires certain employers to provide certain employees up to 40 hours per year of paid sick
time, such employees whose employer is also a federal contractor will only receive an additional
16 hours of paid time off each year. Also, employers with PTO policies that provide an equal or
greater amount of paid time off, which can be used as outlined by the new Order, do not need to
provide additional paid sick time under the Order.

 The requirement covers new contracts and replacements of expiring contracts with the
federal government that result from solicitations on or after January 1, 2017. Employees must
accrue 1 hour of paid sick leave for every 30 hours worked “on” or “in connection with” a
covered federal contract, capped at 56 hours (7 days) in a year.

 Employees that work “on” a covered contract are those that are performing the specific
services called for by the contract. They are covered, regardless of the number of hours worked
in a year and regardless of whether they are full or part time. Employees that work “in
connection” with a covered contract are those that perform work activities that are necessary to
the performance of the contract, but are not directly engaged in the specific services called for in
the contract. An employee who spends less than 20% of his or her hours working “in
connection” with a covered contract in a workweek is not covered.

 Alternatively, employees can be provided at least 56 hours of paid sick leave at the
beginning of each accrual year rather than requiring employees to accrue leave based on hours
worked.

 Employees must be notified in writing of the amount of paid sick leave they have
available at the end of each pay period or each month, whichever interval is shorter.

 Employees may take time off in 1 hour increments, unless their work makes it physically
impossible to leave or return to the job during a shift, and can use the time for their own illness
or other health care needs, for the care of a loved one who is ill, for preventive health care for
themselves or a loved one, for purposes resulting from being the victim of domestic violence,
sexual assault, or stalking, or to assist a loved one who is such a victim. During the leave,
employees must be given their regular pay and benefits, except that they need not earn additional
paid sick leave during that time.

 Employers can require employees using paid sick leave to provide certification from a health
care provider showing the need for leave, if the leave lasts 3 or more consecutive days.

 Employees may carry over up to 56 accrued, but unused paid sick leave from one year to the
next, however the amount of paid sick leave employees may have for use at any one time can be
limited to 56 hours. The integration of the carryover and accrual rules gets complex and the DOL
has provided the following information to help manage the law:

 If an employer front loads the sick time bank with 56 hours, and an employee carries
over 16 hours of paid sick leave from the prior year, the contractor must permit the
employee to have 72 hours (16 hours plus 56 hours) of paid sick available for use at any
time during the second year. This scheme differs from Connecticut law, which
effectively prevents an employee from carrying over any unused time when an employer
front loads their bank.

 If, however, an employer uses the accrual method, any paid sick leave carried over
from the previous year shall offset the amount of time an employee may be able to accrue
at any given time during the second year. For example, if an employee carries over 16
hours of paid sick leave into the second year, she must be permitted to accrue 40
additional hours of paid sick leave. Once she has 56 hours of paid sick leave accrued, the
contractor may prohibit her from accruing any additional leave until the workweek after
she uses some portion of the 56 hours. For instance, if, after reaching the 56-hour cap, she
uses 24 hours of paid sick leave (16 hours of the carryover and 8 hours accrued in the
current year), she must be permitted to accrue up to at least 16 more hours (in addition to
the 40 hours she has already accrued during the second year) for a total of 56 hours
accrued in that year.

 If an employee is rehired by the same contractor within 12 months after a job separation,
the employee is entitled to reinstatement of any accrued, unused paid sick leave, unless the
contractor already paid out the employee upon separation.

 More information can be found on the U.S. Department of Labor’s website in its Fact
Sheet and Overview.

 Outdated employee handbooks can create legal liabilities and provide incorrect
information to supervisors who depend on them when making important decisions. Over the
past year, legislative measures have changed employer obligations in significant ways. Your
handbook and other relevant forms, such as employment applications, I-9s, and leave forms,
should be modified to reflect these changes.

Ban the Box

 Effective January 1, 2017, Connecticut employers may no longer ask about an applicant’s
criminal record, including arrests, criminal charges, and convictions, on an initial employment
application, except when an employer is otherwise required to do so by law, or a security,
fidelity or equivalent bond is required for the position. P.A. 16-83. Employers may inquire
about such matters during a subsequent interview or through supplemental questionnaires
following the initial screening. The new law does not impact existing protections requiring
employers to clearly state that applicants need not divulge prior arrests, charges or convictions
that have been erased. Conn. Gen. Stat. § 31-51i.

 The new law does not go as far as the laws of some states that prevent criminal inquires
until after a conditional offer of employment has been made. Prospective employees who
believe the law has been violated may file a complaint with the Connecticut Department of
Labor, but have no private right of action.

Physician Non-Competes

 Effective July 1, 2016, employers entering into, or renewing a non-compete with current
physician employees, must comply with tighter durational and geographic scope restrictions.
P.A. 16-95. More specifically, aside from the requirement that any such agreement be tailored to
protect a legitimate business interest, the non-compete restrictions can no longer exceed one
year, or cover a geographic radius of more than 15 miles from the physician’s primary work site.
The “primary work site” is defined as the location where the employee generates the majority of
his/her revenue, or any other location where the doctor practices and the parties have expressly
agreed and defined such site in the non-compete agreement.

 A distinction in the law provides greater enforceability where the non-compete is part of
an ownership agreement. In such cases, the agreement is enforceable regardless whether the
termination is voluntary, for cause, without cause, or if the ownership agreement expires without
renewal.

 In contrast, if the non-compete is outside an ownership agreement, the non-compete is
only enforceable if the doctor voluntarily quits, or is termed for cause. It is not enforceable if the
doctor is termed without cause, or the employment agreement expires and the employer fails to
offer a renewal of the contract on the same or similar terms. If the employer offers to renew the
contract on the same or similar terms, but the employee declines the offer, the non-compete is
enforceable.

 In all instances, the employer has the burden of proof when claiming a violation of a non-
compete agreement.

Bi-Weekly Pay

 Effective June 6, 2016, employers are no longer required to seek prior approval from the
Connecticut Department of Labor to move to a bi-weekly payroll period. In the past, such
approval was routinely granted, but required employers to go through the approval process. This
change allows employers to process their payroll 26 times each year, instead of 52, and save
administrative costs associated with payroll processing. P.A. 16-169.

Payroll Cards

 Effective October 1, 2016, employers may pay wages through a “payroll card,” provided
the employee has also been given the option of payment by check and direct deposit, and
voluntarily accepts payment by payroll card instead. Payment by payroll card cannot be made a
condition of employment when hiring new employees, nor can any employer costs associated
with the card be passed on to employees. P.A. 16-125.

 A “payroll card” is defined as a stored value card used by an employee to access wages
from a payroll card account established at a financial institution by an employer, and that is
redeemable at multiple merchants, service providers, bank branches, or ATMs.

 Before instituting a payroll card system, employers must provide employees with a
notice, which can be part of a handbook, stating: use of the card is voluntary and employees may
instead be paid by direct deposit or check; any fees; any terms or conditions for use of the card;
methods available to access wages and avoid or minimize fees; methods to check balances
without incurring fees; and any withdrawal rights.

 Some employers may like card payment as it reduces payroll costs. Processing a payroll
check can cost from $2 to $2.50, while loading a card costs around $.50. Also, many low wage
employees who may prefer to not have a checking account can now take advantage of the payroll
card method of payment.

 Employers may continue to pay through direct deposit, instead of by check or payroll
card, provided the employee consents to direct deposit. Regardless of the payment method, the
employee must be furnished a record of hours worked, gross earnings, deductions, and net
earnings. This statement may be provided electronically, provided the employee consents.

CT FMLA

 Effective June 7, 2016 the Connecticut Family and Medical Leave Act was amended to
closely mirror the federal FMLA’s military exigency leave rights. One difference in the two
laws centers on the length of leave for such reasons. Under federal law the exigency leave is up
to 12 weeks, while the CTFMLA uses the same 16 weeks over a 24-month period applicable for
other forms of leave under the state law. P.A. 16-195.

 Connecticut had previously provided leave to care for injured servicemembers, with such
leave limited to 26 weeks during any 12-month period, which is the same benefit provided by the
federal FMLA for similar needs. Any time taken to care for injured service members offsets the
time permitted for other forms of FMLA leave.

New I-9

 Effective January 22, 2017, employers are required to use an updated I-9 form, which can
be found here. The new form applies only to new hires and need not be completed by employees
already on the payroll.

 The Connecticut Supreme Court recently weighed in on the scope of employee free
speech rights in the workplace. Trusz v. UBS Realty Investors, LLC. In doing so, it expanded
the protections afforded employees when speaking out on matters of public concern, including
those related to their job duties. The Court’s interpretation will bolster the rights of
whistleblowers reporting job related wrongdoing, and better protect employees speaking out on
serious job related issues.

 Free speech rights originate from the First Amendment of the U.S. Constitution, and
Article I, §§ 4,5 and 14 of the Connecticut Constitution. Conn. Gen. Stat. § 31-51q provides a
statutory remedy for employees disciplined or fired for exercising their free speech rights at
work. The statute protects both private and public employees.

 Over the years, the U.S. Supreme Court has provided guidance on the scope of free
speech rights in the workplace under the federal Constitution. The federal test is known as the
Pickering/Connick balancing test, modified by Garcetti.

 In Pickering the Court recognized that a public employer may regulate employee speech
by applying a balancing test that weighs the interests of the employee, as a citizen, in
commenting upon matters of public concern against the interest of the state, as an employer, in
promoting the efficiency of the public services it provides. This test was refined in Connick,
which stated that if a government employee's speech cannot be fairly characterized as
constituting speech on a matter of public concern, it does not enjoy first amendment protections.
Thus, under the Pickering/Connick balancing test, employee speech in a public workplace is
protected from employer discipline if it involves a matter of public concern, and the employee's
interest in commenting on the matter outweighs the employer's interest in promoting the efficient
performance of public services.

 This test was narrowed in Garcetti v. Ceballos, which held that even if the speaker is
discussing matters of public concern, if those matters encompass official job duties, the speech is
not protected by the first amendment. As a result, when analyzing federal free speech claims, a
court must first determine if the employee was speaking as an employee pursuant to his/her
official duties, or as a citizen speaking on non-work related matters of public concern. If the
employee is found to have been speaking as an employee the speech is unprotected. However, if
the employee is found to have been speaking as a citizen on public matters not associated with
official job duties, the court will apply the Pickering/Connick balancing test to determine if the
employee’s right to speak outweighed the employer’s interests in performing its function. In
doing so the court will look at the extent of disruption caused by the speech on workplace
discipline, co-worker harmony, working relationships, the employee’s job performance, the
employer’s responsibilities, and whether the speech was made publically or privately.

 While the Connecticut Supreme Court applied this test to federal claims, the question of
employee speech rights under the Connecticut Constitution remained somewhat unsettled. In
2012 the Connecticut Supreme Court issued companion rulings in Schumann v. Dianon Systems,
Inc., and Perez-Dickson v. City of Bridgeport. Those cases reinforced that the federal test
applies only to federal claims made by either private or public sector employees. Left open was
whether the state Constitution bestowed broader free speech rights to public and private
employees than its federal counterpart.

 In Trusz the Court answered the question in the affirmative. The new test applicable to
free speech claims brought under the state Constitution modifies the Pickering/Connick
balancing test, and eliminates the Garcetti requirement that an employee prove he was not
speaking out on a matter tied to his official duties. Under this modification, while not every
employment dispute will be protected, if the speech is connected to an employee’s job related
concerns about official dishonesty, deliberately unconstitutional action, other serious
wrongdoing, or threats to health and safety, it will not be automatically dismissed, but will be
subjected to the Pickering/Connick balancing test.

 In fashioning the new test, the Connecticut Supreme Court adopted Justice Souter’s
dissent in Garcetti, in which he argued that his “test properly balances the employer's heightened
interest in controlling employee speech pursuant to official job duties—an interest that Pickering
did not specifically address—and the important interests of the employee and of the public in
allowing employees to speak without fear of retaliation about matters of particularly acute public
concern—interests that the Garcetti standard fails to protect.” The Court went on to state that
the new test will apply to both public and private employees who bring suit via 31-51q
contending a violation of the Connecticut Constitution.

 In sum, the new rules are as follows. Free speech claims brought by both private and
public employees under the federal constitution are analyzed under the Pickering/Connick test as
modified by Garcetti. Therefore, if an employee was disciplined or discharged for speech that
touches on their job, the speech will not be protected. Only if the employee is speaking as a
citizen on a matter of public importance that is not related to their job, and their right to speak
outweighs their employer’s interests, will the speech be protected.

 In contrast, free speech claims brought by either private or public employees under the
Connecticut Constitution will be analyzed under the Pickering/Connick test as modified by
Justice Souter’s dissent in Garcetti. Under this new test, an employee who speaks out on a
matter of public concern, including work related concerns that involve official dishonesty,
deliberately unconstitutional action, other serious wrongdoing, or threats to health and safety will
be protected from discipline when making those comments, if the employee’s right to make the
comments outweighs the employer’s interests in preventing the statements. Therefore, the
Connecticut Constitution provides broader protections for public employees speaking out about
serious job related concerns, and § 31-51q extends those same protections to private employees.