 Good afternoon, and thank you for joining us for another episode of Kondo Insider. And our show is one for people who live and work in condos. And today, we're going to be talking about employment laws that would affect associations. And we have our go-to person, John Konorek, attorney John Konorek. And thank you, John, for being our guest today. Thank you. Why don't you tell us a little bit about yourself? No. I'm an managing partner at a law firm called Torkelson Cats. I've been practicing management employment law for about 35 years in Hawaii. And I do a lot of work with condominium associations. So I know the difficulty that you have spending your free time as homeowners managing people and the property. And there are a couple of laws and issues that have arisen this year, one from our state legislature and one from the federal government that I think might impact how we operate. And how are associations affected by these laws? Well, the first law involves what you can and cannot ask applicants for employment and also restricts what you can and cannot require them to do with regard to information about compensation. And that was Senate Bill 2351. That is. Senate Bill 2351 became Act 108. Yeah. And it's called the Equal Pay Act, I think. Well, that's what they call it. And the purpose of the bill essentially was to further equal pay and employment by excluding consideration of possibly discriminatory past payment practices. So we know that women make less than men on average throughout the country. And we know some minorities on average make less per hour than non-minorities. And as a result, there's been an effort across the country in different jurisdictions to limit the kind of information employers can consider in setting a wage rate or salary for a new hire. Well, how would this come about? I mean, when would the employer even be asking the job applicant? So most job application forms have a portion that asks for your employment history. And there's a section in there that says, what were you making? What was your salary? So you can't ask that anymore. That will be forbidden. So beginning January 1, 2019, all employers in Hawaii are prohibited from asking any applicant for employment what their prior compensation has been. It also prohibits any employment agency or agent of an employer from doing any kind of background check to determine what an applicant's compensation or benefits were in their past employment. It doesn't forbid you from asking questions about sales figures or productivity or things like that, objective measures of performance. But it does prohibit any inquiry into an applicant's prior compensation history. And why is that? Well, the idea is that if I know that you are making X dollars in your prior employment, I'm only going to offer you a little bit more than that to get you to come to work for me. And because the legislature believes there's been historical discrimination against women and minorities, that negatively impacts women and minorities because their rate of pay is going to be set lower than a man's or a non-minority. So as the prospective employer and associations are employers? Absolutely. They're the legal employer of most of their employees, although you do have management companies that assist you in managing your employees and help you in the process of hiring, the legal employer is the association. And many times, boards and directors get involved in talking to resident managers that they hire or operations managers or general managers or site managers. So that means that the board members can't be asking these kinds of questions? Probably not. You're right. A board member could not ask any questions about prior compensation. So before you start the process of finding a new resident manager, you're going to have to decide how much are we willing to pay. Now you can ask an applicant what your salary expectation is, but not how much you are making at your prior employer. I see. Okay. Now it goes beyond that though. Okay. So that's the first part of the law. The first part of the law says, thou shalt not ask applicants how much they were making. The second part of the law says, all employees have the right to talk to one another about how much they're making. So what happens now is many employers think it's okay to tell employees, you know what, our salary information is confidential, don't discuss it. Well, the National Labor Relations Board has said you can't do that, but still a lot of people think you can. This law makes it absolutely clear that under Hawaii's discrimination laws, employees have the absolute right to share with other employees how much they're making, what their benefits are, and compare notes. And the reason for that is the legislature believes that by allowing employees to freely share how much they make with one another, that will eliminate some biases in how pay is practiced. Now, you know, you either believe or don't believe that there's inherent bias in setting of compensation, and the legislature apparently does. And so they pass this law to make it easier for employees to say, hey, Jane, how much are you making? And Jane says, well, I'm making $10 an hour. Gee, that's funny. They're only paying me $8 an hour. I think I'm being discriminated against because I'm a man. And that may give me the opportunity to use the information I get from coworkers about their compensation to pursue legal claims on equal pay, gender discrimination, race discrimination, and compensation. But doesn't the compensation depend on your skills and how long you've been working for that particular employer? It should. And maybe you've done some extra work. And the idea behind the law is that this is going to guarantee that that's all it's based on and not prior compensation history. Oh, it seems like it would be counterintuitive. Now, there's some exceptions. Let me go back to the applicant question. I told you that you can ask an applicant what your expectation is. So that's legit. And then once that's discussed, then you can say, well, we're only willing to offer this or, OK, we can meet that, but not asking questions about their past compensation. On the other hand, if an applicant voluntarily tells you, I was making $50,000 at my prior employer, so I want to make at least $55,000, then it's open door. Once they voluntarily disclose what their prior compensation is, then you can use that to set their new compensation. I see. OK. So there's that exception if it's a voluntary disclosure. But you can imagine how many cases somebody will say, I didn't voluntarily disclose that. They asked me. So you have to be very careful not to ask and train and make sure all board members are aware of that if they're involved in the hiring process. And if you're letting your general manager or somebody in your organization hire people, make sure they understand that come January 1, it will be absolutely illegal to ask that question. And the Hawaii Civil Rights Commission and our state law makes it illegal to ask a question even though you don't discriminate on the basis of what you learn from that question. Employers have been fined $10,000 and $20,000 just for asking an inappropriate question. So is the Civil Rights Commission going to be involved? I believe so. Yes. It's a part of our employment discrimination law. So that means that the employee who feels discriminated against can go to the Civil Rights Commission. Right, a file acclaim. And file a claim and get investigated. Say, I was asked my compensation history. Then you're going to have to say, I didn't ask, they voluntarily disclosed. Then you go to battle over that. So how can you protect yourself? Make sure you train all of your boards. Make sure you train all of the people that do hiring for your condominium that they do not ask and that they can always go back and say, we know what the law is. We were trained. We understand what our limitations are. But let me go to the second part of this law too. So while I said employees have the right to share that compensation information, nothing requires you to disclose that. So if an employee comes up to the HR person or the general manager and say, I want to know how much my coworkers are making, you don't have to tell them. But if one of your internal employees that knows that information, let's say an administrative assistant sees that compensation history and they share it with employees, arguably this law protects that person from disclosing information even though their job might be to keep it confidential. There's nothing in the law that has an exclusion for employees whose job it is to keep compensation information confidential. Okay. And so would that apply to, you know, a lot of the associations use the management companies to assist in the hiring process? So that would include the staff of management companies. So the management companies have to now change their property managers? Oh, yes. Oh, yes. And that's already begun. All the property management companies that I work with are aware of this law and are in the process of making sure their property managers and the individuals within their organizations that do any hiring know not to ask prior application or prior compensation history and understand that employees have the right to talk about it with one another. And so, I mean, so how would a claim be made by a person who talks to another employee about their compensation? I think I was fired because I talked about my compensation with somebody else. My boss told me he doesn't want me talking about the raise I just got and I went and told somebody about the raise and he got mad at me and fired me for disclosing what he told me to keep confidential. So you have to remember this all feeds into work rules and policies of companies. So if an association believes it's important to keep compensation information confidential, you can't do that any longer. So that you have to go through your administrator rules and maybe policies to see if any of that stuff is there. Yep. Yep. And that's the first thing. Everybody should be starting to look through their handbooks and policies. If you use a management company, many of the management companies have already updated their handbooks or will be shortly to make sure it doesn't include any limitations on employees talking about their compensation. But if you haven't been updating your handbook annually, I really recommend that you do that particularly this year for the reason that this law takes effect January 1 and you want to make sure that nothing in your handbook restricts employees from talking to one another about compensation. That's point one. But there's a whole other law that's applicable that's creating a lot of stir as well. While this law restricts things on a state level, there are laws on a federal level that apply to condominium associations that are being loosened or being made easier for employers. There's an organization, a federal agency, called the National Labor Relations Board. Most people know that organization as the one that manages union elections and union issues and things like that, and they do that. But they also administer a law that applies to all employees whether or not you're unionized. So most condominium associations are not unionized, so you kind of forgot about this law until the last eight years during the Obama administration when the National Labor Relations Board went on a campaign to expand the protections for non-union employees to engage in what's called protected concerted activity. Protected concerted activity under the National Labor Relations Act means that I am joining together in some way. I'm reaching out or trying to get other employees to join with me to complain about working conditions. So part of the issue is if I go to my boss and say, Bill and I were talking in the lunch room. We think we're underpaid with like a dollar raise. That's protected concerted activity. Also is protected concerted activity. If I post on my Facebook page, my supervisor is a jerk. He keeps me working extra hours and doesn't pay me overtime. That's protected concerted activity. Those comments, those behaviors are protected under a federal law. And if you were to discipline an employee or terminate them, the National Labor Relations Board could issue a complaint in order that person reinstated with back pay. You'd also have to post a notice that says, I violated the law and I violated employees' rights and I promise never to do that again. Why don't we just hold that thought because we're going to take a break now and then we'll come back and we're going to explain how we deal with this. So we're going to take a break now and we'll be back with John Connork and learn more about how we can stay out of trouble by complying with labor laws that affect associations. My name is Stephanie Mock and I'm one of three hosts of Think Tech Hawaii's Hawaii Food and Farmer series. Our other hosts are Matt Johnson and Pamai Weigert and we talk to those who are in the fields and behind the scenes of our local food system. We talk to farmers, chefs, restaurateurs and more to learn more about what goes into sustainable agriculture here in Hawaii. We are on at Thursdays at 4 p.m. and we hope we'll see you next time. Okay, thank you for joining us. We're back with John Connork and we're talking about labor issues and you were talking about this NLRB, the rules. So some people don't even know who the NLRB are. There are five member board in Washington D.C. appointed by the president and as you can imagine, if they're appointed by the president, who sits on that board is going to change depending on who's in the White House. So for the past eight years, the Obama administration appointed members of the National Labor Relations Board that were more protective of employers' rights. Since Trump has taken office, he's appointing more Republicans who are more protective of business interests. So for the last eight years, the National Labor Relations Board has made it a point of protecting employees' complaining about working conditions and telling employers that if you have a rule that in any way could possibly chill an employee's exercise of that right, like scare them into thinking they can't do that. It's illegal and we'll strike it down and anybody can complain about it and we will file a complaint and make you post the notice that says you have to change it and you're not going to violate the rules anymore. It creates other problems too because if you terminate somebody in violation that rule they can get reinstated with back pay or if there's a unionizing effort and a union loses an election. If they point to an illegal rule they get a second election. But the most important thing is you don't want to fire somebody for violating a rule that's illegal. So we have to go through our rules to determine whether they're legal. So for the last eight years, employers have been changing their rules to comply with these greater protections. Well, what's happened is the National Labor Relations Board with a new, newly constituted board that's more business friendly has said, we're going to change all that. We're going to go back to allowing employers greater discretion to kind of control employee behavior. And the old rule basically said if it could feasibly interfere with employees exercising those protected rights, it's an illegal rule. Now the new general counsel, the big attorney for the National Labor Relations Board has said ahead of time, look, we're giving up that old test. The board issued a new test that says we're going to balance the interests of the two parties. So we're going to look at what is the business interest for this work rule and what's the protected conduct that might be affected. And if the business interest outweighs the protected conduct, we're going to let's say it's an OK rule. So they issued basically a memorandum that broke work conduct rules into three categories. They said these are rules that are going to be OK. We'll give them the green light. These are rules that, well, it depends on how they're written. So we'll give that a yellow light. And rules that cover these areas we're going to have to look at carefully, and they may or may not violate the law. And then they said here's a set of rules that are always illegal. That's the red light. You can't have those rules. Or they violate the National Labor Relations Act. The good news is most of the activity over the last year has been in the green light area now. And they basically said work rules that cover areas such as civility, workplace civility, no recording of photographing rules, rules against insubordination, non-cooperation with supervisors, disruptive behavior rules, rules protecting confidential business information, rules against defamation misrepresentation, rules against employees using employer logos or intellectual property, rules requiring authorization to speak for the company, and rules regarding disloyalty, and epitism, or some kind of self-dealing. Those are going to be OK from now on. Previously, the NLRB has struck down enormous number of rules from every major corporation in the country. So civility rules used to be, under the old law, that I can't be rude to my co-employees. If I had that as a work rule, oh, you can't have that. That interferes with the employees vigorously exercising their Section 7 rights. So a work rule that said you have to treat your co-workers civilly and can't be rude was found to be illegal. So what happens if you're rude to your co-worker? You get to be rude, because if you're engaging in protected activity. More importantly, the board says that rule itself, even if you don't enforce it, is illegal. So now what we know is the board has said we're not going to take that position anymore. And in a balancing of interests, workplace civility rules that say you can't be rude to co-workers are OK again. Now, one of the things you have to realize is most companies, you go through cycles of revising your handbook. If anybody's revised their handbook rules in the last eight years, now's the time to revise them again, because what we did in the last eight years was pair back on these rules because of the board saying that you had to allow employees to engage in some abusive bad behavior because it would interfere with their protected rights. Now the board is saying no, no, no, no. You can have those work rules. Now, you cannot apply those work rules in a way that limits your Section 7 rights. These are the protected concert activity. So if an employee complains about their wages, I can't fire them because I think they're rude. They're engaged in protected activity. But I can fire another employee who's rude for some other reason. So employers have to understand their work rules they can have so they can regulate behavior in the workplace better than they used to be able to. But you have to go back and redo your rules. You have to go back and look through all of your rules that were modified over the last eight years and determine whether they fit within one of these nine categories. And if so, you can go back to older language that gave employers more authority and more control over what happens in the workplace. But the NLRB, which you said is a federal, it's a federal organization in Washington, DC. How can it control what an association sets up rules for its employees here in Hawaii? There's a sub-regional office here in Honolulu. And anybody can call up the NLRB here in the local office and ask them to file a complaint on an issue. And they review it. And they say, yep, we're going to file a complaint. And then you'll get a letter from the NLRB and a call that says, we need you to come in here. We've got a problem with your work rules. Oh, that doesn't, that doesn't sound like fun. And if nothing else, even if it's just to change your work rule, that costs you time and money. Right? You're going to have to hire an attorney. You're going to have to spend your time dealing with this. So the whole idea here is we want people to be aware that the rules have changed, gives you more authority to do things with your workers in the workplace. But in order to do that, you need to look at your work rules and say, OK, we can now say things that we couldn't say before that give us a better idea and a better control over how employees treat one another, how employees treat company information, what employees can say to the media about us or to third parties about us. So you can go back to a time when you had better ability to regulate bad behavior in the workplace. Earlier when you were talking about some of the behavior that was OK, you were talking about people making comments on their Facebook page. Yep. So now under this new regime, is that going to be permitted? Employees cannot be critical or demeaning to coworkers. However, they can still be demeaning and critical of their employer. So remember what I said. What's protected is the employee's effort to improve their working conditions. So if an employee posts on their Facebook page, my boss is a jerk. It makes me work too much over time. That's protected concerted activity. Because I call my boss a jerk, I can't discipline you. But if I posted on the Facebook page, my co-worker is a jerk. He doesn't help me do my job. I can't stand working with him. I could discipline you for being rude to your co-workers undermining morale and being uncooperative. So I can discipline you for being posting something that's rude to a co-worker. But I can't discipline you for posting something that's rude and offensive about your supervisor. But this brings up a whole new area. Because in the old days, before Facebook, I mean, people would talk to each other and say things. And you might hear through rumors that so and so says. But now, I mean, you just go on the internet, and you can see all. Well, right. But I mean, one of the things that's important to most businesses is that their employees work cooperatively together. And if you know that somebody you work with has posted stink stuff about you on Facebook, you're not going to feel really good about working with them. So most businesses want to tell employees, don't talk stink about your co-workers on Facebook. And we can enforce that rule now. Before, there were more limitations on being able to discipline an employee for saying negative things about co-workers. They still are able to say negative things about their boss and about the company or about the association in your example. And with no consequences. Right. But most, again, this is one of those areas where the manager, particularly, who is going to issue any kind of discipline and apply these rules of conduct, has to understand what's protected and what's not protected. Because the work rules now are going to be broader and allow us to discipline employees for bad conduct, but we still can't discipline them for protected conduct. So the managers that you hire have to be knowledgeable in this area and consult with their management companies to make sure that they're taking appropriate disciplinary action and not violating any of the laws. I mean, this goes to all the different laws, but this one in particular allows employees to engage in this protected, concerted activity concept. And a lot of the associations, I mean, they rely a lot on their management companies. And are the management companies getting information and actually telling their associations that they've got to update their rules on this type of? I know several that are currently in the process of updating their rules based on what we're talking about today to give more authority to associations. And all of the management companies that I've worked with, which are most in town, are aware of all these laws and changes. And so right now, I mean, if people are watching the show, a lot of them are board members. So what would you suggest that the board members do ask their? Ask their property management company to review their handbook to make sure they have up-to-date work rules that'll give them the greatest authority over the workforce that they want. Without so that they don't get into trouble? So they don't get into trouble by having illegal work rules and that they take advantage of the loosening of the law to have greater rights over their employees, particularly if they've modified their work rules in the past eight years. OK, and so now we know that the associations have to look out for not only the Civil Rights Commission, but now we've got to watch out for the NLRB. Oh, you do. I mean, I've told this before, but there are more. Most people hear this concept of at will. And they think, oh, somehow this is a talisman. It saves me from any liability. If you're at will, I can fire you and there's no consequence. That's completely untrue. The at will doctrine is simply a contractual theory that says I have no contractual rights greater than an at will employee. That means I can be fired for any reason at any time as long as it's not an illegal reason. And illegal reasons are still applicable to all at will employees. You cannot discriminate against an at will based on their race, sex, religion, national origin. You cannot fire an at will employee for a reason that violates public policy. You cannot retaliate against an at will employee because they reported something illegal or took protected leave and all those kind of things. So the point of it is at will is not a protection any longer. There are too many laws that give employees protections and rights beyond at will status. And what the takeaway, I guess, for the board members who are listening is that they have to be aware of this and make sure that they consult with their property management companies to make sure that they are aware of this. And then they should call you or somebody who does the same type of law as you do to assist them. I agree entirely. I think at this point, given these two changes in the law, every board should be asking their property manager, is our handbook up to date? Are we complying with the new Equal Pay Law? And are our work rules compliant with current board law? OK, well, thank you very much for being with us today and sharing your information with us. And to our viewers, I ask you to tune in next week. And we're going to be talking about giving access to elected or candidates for elected office to your building. And this is something I feel very, very important because we got to get condominium owners involved in their community. So thank you for joining us today. And please join us next week for our show on access to condominiums. Thank you, Jay. Thank you.