CLIENT ALERT: Delaware Governor Signs Two New Employment Bills

Firm News

On Wednesday, August 29, 2018, the Governor signed a bill making explicit that sexual harassment in the workplace is a violation of law and establishing new employer notification and training requirements.

In addition, on July 11, 2018, Governor Carney signed into law the Delaware Worker Adjustment and Retraining Notification [WARN] Act.

HB 360 – “Unlawful employment practices; sexual harassment”

On August 29, 2018, Governor Carney signed into law HB 360, which requires all employers of four or more to provide an information sheet to their employees regarding sexual harassment, and employers of 50 or more to provide training to their employees and supervisors on the subject. Inspired by the #MeToo Movement, the bill is intended to ensure that employees are aware of their right to be free from harassment in the workplace and that employers are held accountable when harassment does occur.

The bill requires the Delaware Department of Labor to create an information sheet containing the legal definition of “sexual harassment,” the legal remedies available to employees and the complaint process available through the Department of Labor, directions on how to contact the Department, and the legal prohibition against retaliation. The new law will become effective on January 1, 2019 and will require employers to provide the information sheet, either physically or electronically, to new employees at the commencement of employment and to existing employees by June 30, 2019.

In addition, for employers of 50 or more, the bill requires employers to provide interactive training and education to all employees regarding the nature of and right to be free from sexual harassment, and additional training to supervisors regarding the prevention of sexual harassment. New employees and supervisors must be provided training within 1 year of their start-date and every 2 years thereafter, while existing employees and supervisors must receive training within 1 year of the effective date of the Act and every 2 years thereafter.  However, if an employer conducts qualifying training before the effective date of the law (January 1, 2019), no additional training will be required prior to January 1, 2020. No training is required for applicants, independent contractors, or those employees who are employed less than 6 continuous months.

The training for all employees is required to cover the same topics as in the Department of Labor’s information sheet, namely the definition of “sexual harassment” using examples, the legal remedies and complaint process available to employees, instructions on how to contact the Department of Labor regarding a complaint, and the employee’s right to be free from retaliation. The additional supervisor training must cover a supervisor’s responsibilities for preventing and correcting sexual harassment, and inform supervisors of the legal prohibition against retaliation.

In defining “sexual harassment,” the new law adopts long-standing language in the EEOC’s Guidance on sexual harassment. Because Delaware historically has followed federal law in regard to its interpretation and enforcement of anti-discrimination laws, this definition does not create any new right or cause of action and does not alter the substantive requirements for an employee to bring a viable claim of sexual harassment. To rise to the level of sexual harassment prohibited by law, plaintiffs will continue to be required to show that the conduct suffered was “severe” or “pervasive” and created a hostile working environment, was implicitly or explicitly a term or condition of employment, submission to the conduct was used as the basis for an employment decision, or that a supervisor’s sexual harassment resulted in a negative employment action directed to an employee. 

As is the case under federal law, an employer may defend against certain claims involving alleged harassment on the part of a supervisor by proving that the employer exercised reasonable care to prevent and promptly correct such harassment, and that the employee unreasonably failed to take advantage of the employer’s preventive or corrective programs. Specifically, such a defense may be asserted under Delaware law only in regard to claims that submission or rejection of the offending conduct was used as the basis for an employment decision affecting an employee.  In contrast, under federal law, the defense may be used only to avoid liability for harassment that does not involve an adverse employment action.

In anticipation of the new requirements, employers should ensure they obtain the Department of Labor information sheet prior to January 1, 2019 and should begin planning for training sessions that are in compliance with the requirements of the statute. We will continue to update you on this and other employment-related legislation.

HB 409 – The “Delaware Worker Adjustment and Retraining Notification Act”

On Wednesday, July 11, 2018, Delaware Governor John Carney signed into law the Delaware “WARN” Act, which closely follows the federal WARN Act. The new law, like its federal counterpart, deals with the notice that Delaware employers must give to affected employees in the event of a “plant closing,” “mass layoff,” or “relocation.” A “mass layoff” results pursuant to the statute when an employer reduces its workforce by 500 or more employees. (This differs from the federal definition of “mass layoff,” which specifically excludes any part-time employees in reaching the 500-employee threshold.) A “relocation” occurs when all or substantially all of an employer’s operations move to a location 50 or more miles away.

The purpose of the Act, which will take effect on January 7, 2019, is to provide dislocated workers with “Rapid Response” assistance from the Delaware Department of Labor, and ultimately minimize the economic disruption that large-scale loss of employment may cause by assisting displaced workers in finding new work as quickly as possible post-termination.

The Act will apply to employers with 100 or more full-time employees (i.e., working more than 20 hours per week) and to employers with 100 or more employees that work an aggregate of at least 2,000 hours per week. (In contrast, the federal WARN Act covers businesses with 100 or more employees who work an aggregate of at least 4,000 hours per week.) As a result, some employers not currently subject to the federal WARN Act now will be required to comply with the Delaware statute, and employers already subject to the federal law will have to fulfill additional requirements under Delaware law.

Like the federal WARN Act, its Delaware offshoot requires employers to “warn” employees, in writing, at least 60 days in advance of a plant closing or mass layoff that would cause certain levels of employment loss. In addition, notice must be given to the employees’ bargaining representatives (if any), the Delaware Department of Labor Division of Employment Training, and the Delaware Workforce Development Board. Exceptions to the notice requirement apply only when:  (i) the employer is seeking capital or additional business that might avoid the closing or layoff and providing notice would have foreclosed such possibilities; (ii) the employment loss results from a physical calamity or act of terrorism or war; (iii) the layoff results from sudden and unexpected circumstances (such as the termination of a major contract, a strike, an unanticipated and dramatic economic downturn or government-ordered closing of an employment site or natural disaster) that occur without prior notice; and (iv) the plant closing is of a temporary facility or a mass layoff results from the completion of a particular project or undertaking and the employees knew the project was of limited duration. 

In the case of the sale of part or all of an employer’s business, the seller remains responsible for providing the notice through the effective date of the sale. All individuals who are employed by the seller on the effective date of the sale then are deemed employees of the purchaser, and the purchaser becomes responsible for the required notices.

The notice required by the act must include the names and contact information of each dislocated worker and information regarding any payouts, severance packages, job relocation opportunities, or retirement options the employer plans to offer, and whether the employer is self-insured for workers’ compensation insurance. Delivery will be deemed proper if the notice is sent to an employee’s last known address by first class or certified mail, hand delivered, or included in the employee’s paycheck.

In addition to liability for wages and benefits otherwise due during the 60-day period, civil penalties may be imposed on a Delaware employer that fails to pay such amounts within three weeks of the plant closing, layoff, or relocation. The prescribed penalty is the greater of $1,000 per day of violation or $100 per day of violation for each dislocated worker.  (However, total penalties may not to exceed the maximum amount for which the employer may be liable under federal law for the same violation.)  Notably, the rights and penalties provided by the new act are in addition to, and not in lieu of, any other contractual or statutory rights and remedies of the employees and generally “are not intended to alter or affect such rights and remedies.” Therefore, under appropriate circumstances, an employer’s violation could result in a double payment or other liabilities being imposed.

The Secretary of the Delaware Department of Labor is authorized to promulgate rules and regulations as necessary to carry out this law and to investigate and make determinations regarding any alleged violation of the law. In addition, employees, local governments, and bargaining representatives may bring a civil action against the employer at any time within three years of the alleged violation.

Media Contact

Lisa Altman, Jaffe PR, Senior Vice President

About Potter Anderson

Potter Anderson & Corroon LLP is one of the largest and most highly regarded Delaware law firms, providing legal services to regional, national, and international clients. With more than 100 attorneys, the firm’s practice is centered on corporate law, corporate litigation, intellectual property, commercial litigation, bankruptcy, labor and employment, and real estate.

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