THIS ISSUE'S HEADLINES

New Lead Laws For Rhode Island Rental Properties

The U.S. Federal Trade Commission Bans Virtually All Noncompetition Agreements

DEI Training Does Not Create a Hostile Work Environment


NEW LEAD LAWS FOR RHODE ISLAND RENTAL PROPERTIES

During the 2023 legislative session, the General Assembly passed a number of bills supported by the Rhode Island Attorney General as part of his push for creating and maintaining lead-safe housing. Perhaps the most impactful piece of legislation was the elimination of the owner-occupied exemption for lead certificates.

Prior to January 1, 2024, property owners of rental units that were built before 1978 had to comply with § 42-128.1-8 and obtain what is commonly known as a lead certificate unless the rental property was: (1) lead-safe or lead free; (2) temporary housing; (3) elderly housing; or (4) an owner occupied two- or three-unit dwelling. However, the legislature eliminated the owner-occupied exemption, and thus, as of January 1, 2024, owner occupied dwellings must comply with the requirements of § 42-128.1-8 and obtain lead certificates. Therefore, landlords that had previously relied on the owner-occupied exemption must now obtain lead certificates for their property.

Other amendments to the law include double or treble damages and attorneys’ fees for violation of the lead laws, the ability of tenants to pay rent into an escrow account when the leased premises is not compliant with the lead laws, and registration and filing requirements related to properties and lead certificates with the Department of Health.

If you have questions about Rhode Island property laws or other legal issues, please contact PLDO Partner Patrick J. McBurney at 401-824-5100 or email pmcburney@pldolaw.com.

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THE U.S. FEDERAL TRADE COMMISSION (“FTC”) BANS VIRTUALLY ALL NONCOMPETITION AGREEMENTS

In the last few years noncompetition agreements (“NCAs”) have been under attack in an increasing number of state legislatures. On April 23, 2024, the FTC seems to have put the issue to rest by issuing a nationwide ban on NCAs. The ban becomes effective 120 days after publication in the Federal Register.

The FTC Chair was quoted as saying that noncompetes “… keep wages low, suppress new ideas and rob the US economy of dynamism …” The FTC estimates that the ban will result in the formation of more than 8,500 new businesses each year and the filing of more than 17,000 new patents application for each of the next 10 years. It also estimates that the ban will lower healthcare costs by up to $194 billion over the next 10 years.

Under the new FTC rule, the vast majority of existing noncompetes will become unenforceable when the rule takes effect. One exception is that existing NCAs for senior executives may remain in place, but employers are not permitted to enter into or enforce any new NCAs, even for senior executives. The term “senior executive” is defined as a person making more than $151,164 per year and who serves in a policy making position with the employer.

Companies also are required to notify employees (excluding senior executives) that their employers will no longer be enforcing NCAs against them. To facilitate the notification process, the final rule provides sample language for use by employers.

The new rule is based in part on a finding that a noncompete is an unfair method of competition. As such, it is a violation of the Federal Trade Commission Act.

Permissible Alternatives

The FTC acknowledged that employers still have a legitimate need to protect the investments in their businesses. Therefore, nondisclosure agreements and trade secret laws remain in effect and can provide employers with meaningful remedies, including specific performance, without the need to enforce NCAs.

If you have any questions or would like further information, please contact Attorney Miller of our Corporate and Business Practice at 508-420-7159 or wmiller@pldolaw.com.

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In Young v. Colorado Dept. of Corrections, a Federal Appeals Court affirmed the district court’s dismissal of plaintiff Joshua F. Young’s claims against defendant Colorado Department of Corrections. The Court held that Mr. Young’s hostile work environment claim failed to allege that Colorado created an ongoing hostile presence permeating the workplace that was so severe it altered the terms of employment.

Background

Mr. Young began working for the Department of Corrections in 2017. He was quickly promoted to Housing Seargent in 2017, then to Visiting Seargent in 2020 for his “superior performance.” Following Mr. Young’s promotions, the Department of Corrections implemented mandatory Equality, Diversity, and Inclusion (“DEI”) training, consisting of several online modules that Department of Corrections employees completed on their own computers. Mr. Young, a Caucasian male, alleged that the DEI training included “sweeping and overbroad generalizations about white people,” indicative of a workplace “permeated with [race-based] discrimination, ridicule, and insult.” The training included supplemental readings employees could choose—but were not required—to read, including books about the history and prevalence of racism in America. Mr. Young further alleged that the DEI training included an “Equity Continuum” document that advocated for “treating people differently on the basis of race, in contravention of state and federal law.”

Central to Mr. Young’s hostile work environment claim was his allegation that the DEI training created a “culture of suspicion and distrust in the Department.” This led to him feeling “harassed and intimidated to the point he no longer felt comfortable working for the department.” Mr. Young complained directly to the department but was told his complaint would not be investigated because it “did not establish a reasonable cause to indicate the presence of discrimination or harassment.” The employer’s refusal to investigate or remedy the situation created by the training led him to resign from his employment.

Hostile Work Environment & DEI Training

Title VII of the Civil Rights Act of 1964, codified under 42 U.S.C. § 2000e(a)(1), prohibits “discriminat[ion] against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, religion, sex, or national origin.” To state a racially hostile work environment claim under Title VII, a plaintiff must allege: (1) membership in a protected class; (2) he was subject to unwelcome harassment; (3) the harassment was due to race; and (4) the harassment was so severe or pervasive that it altered a term, condition, or privilege of his employment and created an abusive environment.

The Tenth Circuit held that Mr. Young failed to show the DEI training was unwelcome harassment that was severe and pervasive. Because Mr. Young only subjectively perceived the training to create severe or pervasive harassment, rather than a workplace that is objectively permeated with discrimination, he could not bring a claim against his employer. Specifically, the Tenth Circuit commented on Mr. Young’s lack of evidence showing particular ”hostile” interactions with co-workers resulting from the DEI training. Alternatively, Mr. Young failed to demonstrate that discriminatory treatment or harassment occurred consistently within the Department, and there was no sign that a racial animus infested Mr. Young’s day-to-day work environment.

For employers, this decision shows that employees who object to DEI training may not advance a claim that DEI training, alone, creates a hostile work environment. As shown by the court’s reasoning, the training did not create severe or pervasive discrimination in the workplace. Mr. Young could not show that the alleged harassment occurred with the frequency required to support a hostile work environment claim. Mr. Young was also unable to show that he had been subjected to any other instances of harassment.

If you have any questions or would like further information, please contact PLDO Employment Law Attorneys Matthew C. Reeber or Kathryn M. Couture at (401) 824-5100, mreeber@pldolaw.com or kcouture@pldolaw.com.

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