Davis Wright Tremaine LLP USA - Alaska

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1 LABOR AND EMPLOYMENT DESK BOOK Davis Wright Tremaine LLP USA - Alaska CONTACT INFORMATION James H. Juliussen Davis Wright Tremaine LLP JimJuliussen@dwt.com 1. Do you have a plant closing law in your jurisdiction and if so, what does it require? (For U.S. jurisdictions, please answer: Is there a Baby WARN Act in your state and if so, what does it require?) No, Alaska does not have any legislation or regulations that parallel the WARN Act. 2. Are there special rules on releases/waivers in your jurisdiction? Alaska courts need not decide whether a release agreement entered into in good faith should or should not be enforced because it was the product of unilateral or mutual mistakes. Rather, the courts determine whether, at the time the release was entered into, the releaser intended to discharge a liability which was subsequently discovered, i.e., not known to the releasor at that time. Witt v. Watkins, 579 P.2d 1065 (Alaska 1978). Under the rule that contracts are interpreted to give effect to the reasonable expectations of the parties, Alaska courts will enforce broadly-drafted release agreements entered into in good faith, supported by adequate consideration, even if the parties did not specifically list all possible released claims. Alyeska Pipeline Service Co. v. Shook, 978 P.2d 86, (Alaska 1999) (a release agreement releasing the employer from any and all claims..., liabilities, demands and causes of action, known or unknown, arising from [the employee s] employment or as a result of this separation of employment released all of [the employee s] employmentrelated claims, including any potential Alaska Wage & Hour Act claim ).

2 3. What are the equal employment opportunity/ non-discrimination categories in your jurisdiction (For U.S. jurisdictions, please answer: Are there protected categories beyond Title VII in your state?) Yes. The Alaska State Law Against Discrimination, Alaska Statutes ( A.S. ) 18.80, includes all of the categories protected under Title VII of the Civil Rights Act. In addition to that, the Alaska State Law Against Discrimination prohibits discrimination on the basis of age, physical and mental disabilities, marital status, changes in marital status, pregnancy and parenthood. A.S (a)(1). This antidiscrimination law applies to any employer who has one or more employees in the state but does not include a club that is exclusively social, or a fraternal, charitable, educational, or religious association or corporation, if the club, association or corporation is not organized for private profit. A.S (4). This law applies to both for-profit private sector employers and the State of Alaska and its political subdivisions. The Alaska antidiscrimination law also prohibits discrimination by labor organizations on the basis of the protected classifications, and it forbids employers and employment agencies from advertising job openings which limit job applications in certain of the protected classifications unless justified by a bonafide occupational qualification. A.S (a)(2) & (3). The Alaska State Law Against Discrimination prohibits discrimination in places of public accommodation and in the sale or rental of real property. It prohibits unlawful financing practices, and it bars the State of Alaska and its political subdivision from denying any funds, services, goods, facilities, advantages, or privileges because of race, religion, sex, color, or national origin, and further limits state or local government actions that adversely affect individuals with physical or mental disabilities. A.S What are the minimum wage and overtime rules (and exemptions) in your jurisdiction? The Alaska Wage and Hour Act ( AWHA ) is in some instances more stringent than the FLSA. The AWHA applies to any employee employed in the State of Alaska except for agricultural employees, fishermen, domestic servants, individuals employed by the United States government, the State of Alaska or it political subdivisions, newspaper carriers, volunteers, hunting and fishing guides, taxicab drivers, and a few other categories of employees. A.S Since November 7, 2005, Alaska follows the FLSA exemptions for bonafide executive, administrative, or professional employees including computer professionals and for employees employed as outside salesmen. A.S The Alaska minimum wage is currently $7.15 per hour. A.S Tips and gratuities may not be counted by the employer toward payment of the Alaska minimum wage. AWHA generally requires employers to pay overtime to non-exempt employees for all hours worked in excess of eight hours per day and forty hours per week. A.S Employers with less than four employees in the regular course of business are exempt from this overtime pay requirement. Additionally, several categories of employees are exempt from overtime pay under AWHA, including most agricultural employees, employees engaged

3 in small mining operations, seamen, casual employees, hospital employees whose employment includes the provision of medical services, employees employed under a flexible work hour plan incorporated in a collective bargaining agreement, employees employed under a flexible work hour plan voluntarily entered into by the employee and approved by the Alaska Department of Labor, and certain line haul truck drivers. 5. Is there employment-at-will, or some other rule, in your jurisdiction? What are the exceptions? Alaska courts recognize the common law at will employment relationship. The Alaska Supreme Court has confirmed that an employer may generally discharge an employee, with or without cause, in the absence of a contract for a specified period of time. Eales v. Tanana Valley Medical-Surgical Group, Inc., 663 P2.d 859 (Alaska 1983). Alaska courts also recognize several exceptions to employment-at-will, the most important of which are implied employment contracts, the implied covenant of good faith and fair dealing and tortious violation of public policy. In Alaska, the implied covenant of good faith and fair dealing is read into every employment relationship, whether at-will or not. ERA Aviation, Inc. v. Seekins, 793 P.2d 1137 (Alaska 1999). 6. What are the legal obligations upon terminating an employee in your jurisdiction? If the employee terminates his or her employment, payment of all wages, salaries, or other compensation due must be made on the next regular payday that is at least three days after the employer receives notice of the employee s termination. On the other hand, if the employee s employment is terminated by the employer, regardless of the cause for termination, payment of all wages, salaries and other compensation due must be made within three working days after termination. A.S An employer that violates this rule may be penalized in the amount of the employee s regular wage, salary or other compensation for each day the required final payment is overdue, up to a maximum of 90 working days. A.S (d). An employer may also have an obligation to provide return transportation to the employee if the employee was hired at a different location in the state or was hired outside Alaska. See Return Transportation and Subsistence in answer to question 8 below. 7. Are there any family and/or medical leave laws in your jurisdiction, and if so, what do they require? (For U.S. jurisdictions, please answer: Are there family and/or medical leave laws in your state beyond FMLA and if so, what do they require?) Not for private sector employers in Alaska. However, the State of Alaska and its political subdivisions are covered by the Alaska Family Medical Leave Act. The Alaska act is similar to the federal FMLA although it requires up to 18 weeks of leave for eligible employees. A.S et. seq. 8. Please list any miscellaneous, interesting or oddball laws in your jurisdiction, and state under what circumstances they pertain.

4 Polygraph Tests: Alaska employers are prohibited from requesting or even suggesting that an employee or job applicant submit to a polygraph examination as a condition of employment, except for the State of Alaska and its political subdivisions when dealing with police officers. A.S Violation of this law is a misdemeanor in Alaska. Return Transportation and Subsistence: Under Alaska law, an employer who finances, furnishes, agrees to finance or furnish, or in any way provides transportation to a person in order to employ that person must provide return transportation under certain circumstances. In most cases, an employee hired at a different location in Alaska from the place at which he or she is employed, or hired from a location outside of the state, must be returned to that location at the employer s expense at the end of the employee s employment. The return transportation can be either to the place of hire or another mutually agreed upon destination. A.S An employee who desires return transportation must make that request within 45 days after employment is terminated. The employee may forfeit his or her right to return transportation if the employee was terminated for one of four reasons: (1) falsification of employment application; (2) intoxication; (3) fighting; or (4) prolonged unexcused absence from duties. Unless the employer has accepted a broader obligation by contract, the employer s return transportation obligation usually is limited to paying the costs of returning the employee to the point of hire (e.g., purchasing a one-way airline ticket home). If the employee is unable to travel after termination, the employer must furnish board and lodging or, if the employer does not normally furnish those services, a per diem of $100 per day. Deposit of Wages: An employer may not deposit an employee s wages in a bank account or other account unless the employee has voluntarily authorized that form of payment. A.S Meal Periods and Rest Breaks: Unlike many other states, Alaska has not passed any law or adopted any regulation that requires employers to provide employees with meal periods or rest breaks during the work day, except with respect to employment of minors. AS However, most Alaska employers voluntarily provide unpaid meal periods and paid rest breaks to their employees. A Little Marijuana at Home: The Alaska Constitutional right of privacy has been interpreted by both of Alaska s appellate courts as permitting residents to possess a small amount of marijuana (less than 4 oz.) in the privacy of their homes. Ravin v. State, 537 P.2d 494 (Alaska 1975); State v. Crocker, 93 P.3d 93 (Alaska App. 2004). These decisions limit state and local law enforcement agencies. They do not affect federal law that criminalizes possession of marijuana, nor do they limit employers in banning marijuana in the workplace. 9. Does your jurisdiction have a law requiring employers to give employees access to, or a copy of, their personnel records? Yes. Employers are required to permit their employees and former employees to inspect and make copies of the employee s personnel file and other personnel information maintained by

5 the employer concerning the employee under reasonable rules during regular business hours. The employer may require the employee or former employee to pay the reasonable costs of duplication of these personnel records. A.S The term personnel file and other personnel information is broadly interpreted to mean all papers, documents, and reports pertaining to a particular employee that are used or have been used by the employer to determine the employee s eligibility for employment, promotion, additional compensation, transfer, termination, disciplinary or other adverse personnel action. 8 AAC (d). That term does not include information of a personal nature, the disclosure of which would constitute an unwarranted invasion of that person s privacy, or information of an employer s on-going investigation of employee misconduct or a violation of a criminal or federal statute by the employee. Id. 10. Does your jurisdiction outlaw or restrict drug tests, alcohol tests, genetic tests or any other kind of testing? At this time, Alaska has not adopted any law or regulations regarding genetic testing. The Alaska Supreme Court has held that private sector employees have a common law right of privacy affected by random drug testing, however, such testing is likely to be considered lawful when balanced against important employer safety interests. Luedtke v. Nabors Alaska Drilling, Inc., 768 P.2d 1123, (Alaska 1989) ( Where the public policy supporting the [plaintiffs ] privacy in off-duty activities conflicts with the public policy supporting the protection of the health and safety of other workers, and even the [plaintiffs] themselves, the health and safety concerns are paramount ). The Alaska Supreme Court also has held that a public sector employer may not conduct random urinalysis testing of its police or firefighters without a documented history of substance abuse problems among such employees. Anchorage Police Department Employees Assoc. v. Anchorage, 24 P.3d 547, 559 (Alaska 2001) (Such random testing constitutes an unreasonable search or seizure under Article I, Section 14 of Alaska s constitution, which is interpreted more broadly than its federal counterpart). The State of Alaska has adopted the so-called Safe Haven Law regarding drug and alcohol testing. This law provides substantial protection from employee lawsuits for employers who voluntarily conform their drug and alcohol testing programs to the requirements of the Safe Haven Law. A.S Among other things, the Safe Haven Law requires that employers who seek the protection of the law adopt and publish drug and alcohol testing policies that identify the types of testing required, the circumstances under which employees will be tested, the consequences of failing a test, the testing methodologies to be used, the information to be provided to the tested employee at his request, and which require the use of a medical review officer and protect confidential testing information, among other safeguards. Compliance with this law is voluntary. Time spent in drug and alcohol testing is compensable, and all costs associated with such testing, including transportation costs, must be paid by the employer. AS Does your jurisdiction have any special rules on the payment of sales commissions?

6 No. Outside salesman and salesman employed on a straight commission basis may be exempt from overtime pay under the Alaska Wage and Hour Act if they meet the exempt criteria established by the Alaska Department of Labor in 8 AAC (a)(10) and (12). 12. What are the basic rules on enforcing non-competes and related agreements in your jurisdiction? Non-competition agreements are disfavored in Alaska law because they impose hardships upon individuals seeking to earn a livelihood. Such agreements are therefore strictly construed. De Cristofaro v. Security National Bank, 664 P.2d 167 (Alaska 1983). Alaska courts will nevertheless enforce reasonable non-competition covenants entered into in good faith. Data Management, Inv. v. Greene, 757 P.2d 62 (Alaska 1988); Wirum & Cash Architects v. Cash, 837 P.2d 692 (Alaska 1992). Alaska courts considered the following factors in deciding whether to enforce a non-competition agreement: a) the absence or presence of limitations as to time and space; b) whether the employee represents the sole contact with the customer; c) whether the employee is possessed of confidential information or trade secrets; d) whether the covenant seeks to eliminate competition which would be unfair to the employer or merely seeks to eliminate ordinary competition; e) whether the covenant seeks to stifle the inherent skill and experience of the employee; f) whether the benefit to the employer is disproportional to the detriment to the employee; g) whether the covenant operates as a bar to the employee s sole means of support; h) whether the employee s talent which the employer seeks to suppress was actually developed during the period of employment; and whether the forbidden employment is merely incidental to the main employment. Data Management, Inc. v. Greene, supra