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Article Summary

Starting on July 1, 2020, employees with a workplace in Virginia will gain significant new rights and protections, courtesy of the 2019 Democratic electoral takeover in Richmond. The Virginia Values Act forbids a far broader range of employment discrimination than previous state laws, while other new statutes protect whistleblowers and workers who are underpaid and/or misclassified. Taken in tandem with some structural advantages enjoyed by plaintiffs in the Commonwealth's trial courts, these changes are transforming Virginia into an employee-friendly venue — a huge turnaround for the state.

This article by TELG associate Andrew D. Howell and TELG managing principal R. Scott Oswald was published by The Employment Law Group, P.C. on June 24, 2020.

A New Day for the Old Dominion

By Andrew D. Howell and R. Scott Oswald

 

IMPORTANT: The employee-protections laws described below become effective in Virginia on July 1, 2020, except as noted. The laws have no retroactive effect. This article provides a top-level summary but is not legal advice upon which you should rely or act. Every case is unique and fact-specific.

 

——————————

 

WHAT’S IN THIS ARTICLE

 
1. Introduction · Jump to section

2. Powerful New Anti-Discrimination Measures · Jump to section

A. Previous Landscape

B. What Has Changed

  • Virginia Values Act
  • Ban on Hair Discrimination
  • Expanded Ban on Pregnancy Discrimination

3. Powerful New Protections for Whistleblowers · Jump to section

A. Previous Landscape

B. What Has Changed

4. Powerful New Wage-and-Hour Measures · Jump to section

A. Previous Landscape

B. What Has Changed

  • Private Right of Action on Wages
  • Anti-Retaliation Provision for Wage Claims
  • Private Right of Action on Misclassification
  • Anti-Retaliation Provision for Misclassification Claims
  • Other Misclassification Enforcement
  • Minimum Wage Provisions

5. Why Virginia’s Courts Now Look Attractive for Employees · Jump to section

 

——————————

 

1. INTRODUCTION

It’s a new day for employees in the Old Dominion. Long a state that offered its workers few protections and limited remedies, as of July 2020 Virginia transforms into one of the more progressive jurisdictions in the nation.

While the U.S. Supreme Court just banned workplace discrimination based on sexual orientation and gender identity as a matter of federal law, Virginia already was set to become the first state in the South to do so under state law — and its courts offer several advantages over federal venues.

The Commonwealth, meanwhile, joins a vanguard of states that are banning so-called “hair discrimination” as a flavor of race bias, and Virginia’s women now have additional protections for discrimination related to pregnancy, childbirth, and related medical conditions.

Virginia law now offers powerful protections for whistleblowers, too. A new statute solidifies many claims that employees previously struggled to fit into the narrow rubric of wrongful termination under Virginia common law.

And Virginia has enacted private rights of action for wage payment issues and for misclassification as an independent contractor, along with a minimum hourly wage that will rise in stages to $15 over the coming years.

All of these changes combine with favorable litigation rules to make Virginia’s circuit courts a welcoming environment for employees — a major turnaround from the past.

 

2. POWERFUL NEW ANTI-DISCRIMINATION MEASURES

A. Previous Landscape

Historically, Virginia’s Human Rights Act has provided only the barest of protections to employees who faced discrimination.

Under previous law, employees had a private right of action against employers of 15 or more only for “discharge” on the basis of “race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, including lactation.” Based on case law, the prohibition on sex discrimination did not encompass firings on the basis of sexual orientation or gender identity. For age discrimination (40 or older), employees had a right of action against employers of 20 or more — again limited to discharge.

Even when a plaintiff prevailed, the old statute severely limited remedies. Back pay was capped at 12 months, plus interest. Compensatory damages and punitive damages were not allowed. The law did not allow for job reinstatement as an equitable remedy. And it capped attorney fees at 25 percent of the awarded back pay.

B. What Has Changed

As of July 1, 2020, just about all of these limitations are changed dramatically. The biggest differences arrive via the Virginia Values Act, but some separate legislation also has an effect. What follows is a summary of the major measures.

The Virginia Values Act

Effective on July 1, the Virginia Values Act (VVA) amends the Virginia Human Rights Act (VHRA) and makes it illegal for an employer to:

Fail or refuse to hire, discharge, or otherwise discriminate against any individual with respect to such individual’s compensation, terms, conditions, or privileges of employment because of such individual’s race, color, religion, sex, sexual orientation, gender identity, marital status, pregnancy, childbirth or related medical conditions including lactation, age, status as a veteran, or national origin.

(Emphasis added)

Put simply, the VVA expands the scope of prohibited adverse employment actions and the covered bases of discrimination. The law generally still limits its private causes of action to employers with 15 or more employees — except for cases of discriminatory firing, which can be brought against employers with as few as five employees.

That’s not all. The VVA demands only that employees show discrimination to be a “motivating factor” in the employment decision, rather than the sole or determinative factor. And the remedies available to prevailing employees now include:

  • Uncapped compensatory damages;
  • Punitive damages up to $350,000;
  • Uncapped reasonable attorneys’ fees and costs; and
  • “Any permanent or temporary injunction, temporary restraining order, or other order, including an order enjoining the defendant from engaging in such practice, or order such affirmative action as may be appropriate.”

To launch an action under the VHRA, employees must file a complaint with the Virginia Division of Human Rights. Notably, under the modified law,

Upon receipt of a written request from the complainant, the Division shall promptly issue a notice of the right to file a civil action to the complainant after (i) 180 days have passed from the date the complaint was filed or (ii) the Division determines that it will be unable to complete its investigation within 180 days from the date the complaint was filed.

This is similar to 29 C.F.R. § 1601.28(a)(2), the federal regulation that allows employees to request a Right to Sue Notice from the U.S. Equal Employment Opportunity Commission. Upon receiving such a notice from the Division of Human Rights, aggrieved employees may bring suit directly in Virginia’s court system and request a jury trial.

Ban on Hair Discrimination

Under House Bill 1514, Virginia has also amended the definition of race discrimination as follows:

The terms “because of race” or “on the basis of race” or terms of similar import when used in reference to discrimination in the Code and acts of the General Assembly include because of or on the basis of traits historically associated with race, including hair texture, hair type, and protective hairstyles such as braids, locks, and twists.

With this law, Virginia is preceded only by California, New York, and New Jersey in banning hair discrimination as a form of race discrimination.

Expanded Ban on Pregnancy Discrimination

House Bill 827 broadened the definition of pregnancy discrimination under the Virginia Human Rights Act. The amended VHRA allows a cause of action against an employer who “refuse[s] to make reasonable accommodation to the known limitations of a person related to pregnancy, childbirth, or related medical conditions, unless the employer can demonstrate that the accommodation would impose an undue hardship on the employer.”

The law’s definition of reasonable accommodation includes:

more frequent or longer bathroom breaks, breaks to express breast milk, access to a private location other than a bathroom for the expression of breast milk, acquisition or modification of equipment or access to or modification of employee seating, a temporary transfer to a less strenuous or hazardous position, assistance with manual labor, job restructuring, a modified work schedule, light duty assignments, and leave to recover from childbirth.

In short, working mothers are entitled to any reasonable help they might need to carry out their duties before or after a birth. Moreover, the amended VHRA forbids employers from retaliating against workers for requesting such help.

 

3. POWERFUL NEW PROTECTIONS FOR WHISTLEBLOWERS

A. Previous Landscape

Like 48 other states, Virginia is an “at-will” employment state. This means an employer may fire an employee for any reason at all, so long as it is not a reason forbidden by law.

As in most other at-will states, Virginia’s courts recognize a modest exception to this doctrine in cases where the employee “claim[s] to have been discharged in violation of an established public policy.” Bowman v. State Bank of Keysville, 331 S.E.2d 797, 801 (Va. 1985). In the absence of a robust whistleblower protection statute — something Virginia never had until now — this “public policy” exception is often an employee’s only protection against being fired for blowing the whistle on wrongdoing.

In Virginia, Bowman claims are available to whistleblowers only after they are fired, and only in narrow circumstances. The Supreme Court of Virginia recognizes them only where:

  • An employer has violated the employee’s statutory rights;
  • A termination violates a public policy expressed in a statute and the employee falls within a class protected under that statute; or
  • The employee is fired for refusing to engage in illegal or criminal behavior.

Rowan v. Tractor Supply Co., 559 S.E.2d 709, 711 (Va. 2002).

Beyond Bowman claims — and the protections of federal laws — a limited number of Virginia whistleblowers also could seek protection via the Virginia Fraud Against Taxpayers Act (VFATA), which forbids retaliation against employees who take actions “in furtherance of an action under [the VFATA] or other efforts to stop one or more violations of [the VFATA].” The VFATA deals with fraud against the Virginia government.

B. What Has Changed

House Bill 798 codified and broadened the common-law exceptions found in Bowman and its progeny, offering employees statutory protection against a range of punishment that now goes far beyond firing. Specifically, as of July 1, 2020:

An employer shall not discharge, discipline, threaten, discriminate against, or penalize an employee, or take other retaliatory action regarding an employee’s compensation, terms, conditions, location, or privileges of employment, because the employee:

  1. Or a person acting on behalf of the employee in good faith reports a violation of any federal or state law or regulation to a supervisor or to any governmental body or law-enforcement official;
  2. Is requested by a governmental body or law-enforcement official to participate in an investigation, hearing, or inquiry;
  3. Refuses to engage in a criminal act that would subject the employee to criminal liability;
  4. Refuses an employer’s order to perform an action that violates any federal or state law or regulation and the employee informs the employer that the order is being refused for that reason; or
  5. Provides information to or testifies before any governmental body or law-enforcement official conducting an investigation, hearing, or inquiry into any alleged violation by the employer of federal or state law or regulation.

Retaliation for some of these whistleblowing actions was already actionable under Bowman if it included firing — but for other situations a claim would have been difficult or impossible to pursue. Now whistleblowers have a clearer path and may bring a civil action within one year of a violation. Remedies include:

  • An injunction to stop continued retaliation;
  • Reinstatement to the same position held before the retaliatory action, or to its equivalent;
  • Lost pay, including benefits and other remuneration, plus interest; and
  • Reasonable attorney fees and costs

Though not as comprehensive as general-purpose whistleblower provisions in states such as New Jersey and California, the new law is a major upgrade for Virginia employees.

 

4. POWERFUL NEW WAGE-AND-HOUR MEASURES

A. Previous Landscape

Among other things, Virginia law already required all employers to “pay salaried employees at least once each month and employees paid on an hourly rate once every two weeks or twice in each month.” Va. Code § 40.1-29(A)(1).

For a worker whose employer violated such wage-and-hour laws, however, there was no private right of action — meaning that, instead of filing suit, employees were forced to rely on government agencies to vindicate their rights. And until now, employees had no direct protection against retaliation for questioning their employer’s compliance with the law.

B. What Has Changed

Private Right of Action on Wages

House Bill 123 grants employees a private right of action for non-payment of wages, either individually or collectively, and calls for doubled damages along with reasonable attorney fees and costs if the plaintiff prevails. What’s more, a knowing violation of the new law will result in trebled damages, which is better than the federal Fair Labor Standards Act. The new statute calls a violation knowing when:

the person, with respect to information, (i) has actual knowledge of the information, (ii) acts in deliberate ignorance of the truth or falsity of the information, or (iii) acts in reckless disregard of the truth or falsity of the information. Establishing that a person acted knowingly shall not require proof of specific intent to defraud.

The law has a three-year statute of limitations and is operative “without regard to any exhaustion of alternative administrative remedies.”

Anti-Retaliation Provision for Wage Claims

House Bill 337 forbids employers from retaliating against employees who file a wage claim, or who testify in a wage proceeding, under Va. Code § 40.1-29. This new law doesn’t directly authorize a private right of action — instead it calls for a complaint to the Virginia Department of Labor — but it’s arguable that Virginia’s new whistleblower protection law (see above) may expose violators of H.B. 337 to private civil action. The viability of such an approach will need to be tested in litigation.

Private Right of Action on Misclassification

House Bill 984 provides a private right of action for misclassification — an incorrect portrayal of an employee as an independent contractor, most often for the purpose of avoiding the payment of proper wages or benefits. The new law creates a presumption of an employer-employee relationship between a person who pays remuneration to another for services, unless it can be shown that the putative employee actually is an independent contractor as defined by the Internal Revenue Service.

Available remedies include “damages in the amount of any wages, salary, employment benefits, including expenses incurred by the employee that would otherwise have been covered by insurance, or other compensation lost to the individual, a reasonable attorney fee, and the costs incurred by the individual in bringing the action.”

Anti-Retaliation Provision for Misclassification Claims

Meanwhile, House Bill 1199 makes it unlawful for employers to:

discharge, discipline, threaten, discriminate against, or penalize an employee or independent contractor, or take other retaliatory action regarding an employee or independent contractor’s compensation, terms, conditions, location, or privileges of employment, because the employee or independent contractor:

  1. Has reported or plans to report to an appropriate authority that an employer, or any officer or agent of the employer, has failed to properly classify an individual as an employee and failed to pay required benefits or other contributions; or
  2. Is requested or subpoenaed by an appropriate authority to participate in an investigation, hearing, or inquiry by an appropriate authority or in a court action.

Again, there is no direct private right of action. An employee may file a complaint with the Virginia Department of Labor, which may bring an action on the employee’s behalf to recover lost wages, possibly order reinstatement, and possibly assess a civil penalty against an offending employer.

Other Misclassification Enforcement

Effective on January 1, 2021, two additional measures will provide the government with new powers against employers who seek to misclassify their workers:

  • Senate Bill 744 provides for civil penalties for misclassification and allows debarment from public contracts for repeat offenders. This bill also has an anti-retaliation provision.
  • House Bill 1407 empowers the Department of Taxation to investigate misclassification.

Minimum Wage Provisions

Under House Bill 395, Virginia’s minimum wage will increase to $9.50 per hour effective January 1, 2021, a 31 percent jump from the current level. The wage floor will then rise each following year until January 2026, when it is slated to reach $15.00 per hour.

Because Governor Ralph Northam has recommended some changes on effective dates, however, the bill will be returning to the legislature for further approval. See Va. Const. art. 5, § 6(b)(iii).

 

5. WHY VIRGINIA’S COURTS NOW LOOK ATTRACTIVE FOR EMPLOYEES

In the past many Virginia employees have looked to vindicate their complaints in the federal court system, rather than in state courts, simply because the Commonwealth’s statutes and common law were unsympathetic to their cause. Now that the legal balance has been reset by Democratic legislators in Richmond, some procedural mechanisms that favor plaintiffs will come to the fore. As a result, Virginia’s circuit courts are likely to see an influx of employment disputes.

In particular, state judges are loath to cut a case short at summary judgment, since the Supreme Court of Virginia has described such an outcome as a “drastic remedy.” Shevel’s, Inc.-Chesterfield v. Southeastern Associates, Inc., 320 S.E.2d 339, 342 (Va. 1984). Recall that Virginia has a unique rule: In most cases, a party cannot obtain summary judgment if the motion is “based in whole or in part upon any discovery depositions under Rule 4:5, unless all parties to the suit or action shall agree that such deposition may be so used.” Va. S. Ct. R. 3:20; see also Va. Code § 8.01-420(A). Meanwhile there’s no prohibition against using depositions to oppose a motion for summary judgment. Lloyd v. Kime, 654 S.E.2d 563, 568-69 (Va. 2008).

Since employers usually are the party seeking to avoid a trial, while many employees are happy to reach a jury, this procedural advantage is attractive to plaintiff’s attorneys.

In addition, unlike in federal court, employees in Virginia state court have a right to voir dire their jurors directly at the start of a trial — and to excuse jurors with harmful biases who cannot “stand indifferent.” Va. Code § 8.01-358.

Viewed alongside a set of statutes that now offers protection that’s similar to — or better than — their federal analogues, Virginia’s court system suddenly looks like a genuinely attractive venue for employees. For workers in the Old Dominion, it truly is a new day.

———-

Andrew D. Howell is an associate at The Employment Law Group, P.C. R. Scott Oswald is the firm’s managing principal.

 

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