On April 19, 2023, Conn Maciel Carey LLP’s Labor & Employment partners, Kara Maciel and Jordan Schwartz, submitted public comments on behalf of a diverse coalition of employers urging the Federal Trade Commission (“FTC”) to revise its Proposed Rule banning non-competition clauses. While we believe that the FTC does not have legal authority to promulgate the Proposed Rule in its current form, the coalition’s comments focused on three problematic portions of the Proposed Rule and proposed the FTC revise it in three primary respects: Continue reading
Author: Kara Maciel
Join CMC’s Coalition to Combat the FTC’s Ban of Noncompete Agreements
Earlier this month, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking for its proposed rule that would essentially prohibit employers from entering into noncompete agreements with any employee, as well as with independent contractors, interns, volunteers, and other types of workers. 
The proposed rule would require employers to withdraw any existing noncompete agreements and inform employees that noncompete agreements no longer apply. The proposed rule would also make it unlawful for an employer to enter into a noncompete agreement with an employee, to attempt to enter into such an agreement with an employee, or to suggest that an employee is bound by a noncompete agreement when the employee is not.
While the FTC may justify this proposed rule as necessary to allow workers to move freely without restrictions, we believe that this rule, if passed, would severely compromise a company’s ability protect its trade secrets and other confidential information, and could negate a company’s significant investment in valuable investments in its employees, including employee training. Indeed, there are countless reasons why a narrowly tailored noncompete agreement is a necessary tool that has been, and should continue to be, in an employer’s arsenal to protect its significant investment in its employees and the information to which they are privy.
The rule is currently open for comment. To that end, Conn Maciel Carey LLP is organizing a new fee-based coalition of employers and trade groups to advocate for the most reasonable FTC rule possible, with the goal of helping to shape any rule that the FTC ultimately promulgates in such a way that the rule is palatable to employers. We would be honored to partner with your organization in this endeavor. Continue reading
FTC Moves to Ban the Use of Noncompete Agreements by All Employers
By Kara M. Maciel and Samuel S. Rose
The Federal Trade Commission (FTC) has issued a Notice of Proposed Rulemaking for its proposed rule that would essentially prohibit employers from entering into noncompete agreements with any employee, independent contractors, interns, volunteers, and other types of workers. 
The FTC’s self-described mission is “protecting the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education.” This proposed rule is the latest example of the FTC, under the direction of Chair Lina Khan, attempting to control corporate power and influence. Since Khan took over control of the agency in June 2021, the FTC has challenged the Microsoft-Activision merger, worked with the Justice Department to force Epic Games Inc., developer of the popular video game Fortnite, to agree to massive privacy law violation penalties, and filed a lawsuit to block Meta from buying a virtual reality start-up.
Generally, noncompete agreements prevent an employee from joining a competitor or starting a competitive business for a specified period of time. Often, noncompete agreements are limited to a geographic area. Many states regulate noncompete agreements in a variety of ways, including through income levels and notice requirements, but this new federal rule would supersede any state or local law that expressly allows for such restrictions.
The FTC estimates that approximately 30 million people are bound by noncompete agreements. Continue reading
Recap of Year Two of the Biden Administration [Webinar Recording]
On Wednesday, December 7, 2022, Kara M. Maciel and Aaron R. Gelb presented a webinar regarding a Recap of Year Two of the Biden Administration.
As we approach the midway point of the Biden Administration, we will take stock of the lay of the land at Biden’s DOL, reviewing the initiatives the Department and its agencies have focused on in Year 2 and evaluating how they have fared in driving change at DOL, EEOC, NLRB, and OSHA. We will also assess those agencies’ rulemaking, policymaking, and enforcement efforts; make predictions about what employers can expect from the Biden Administration’s DOL in the second half of President Biden’s presidential term; and assess the impact of the mid-term elections.
Participants in this webinar learned about: Continue reading
NLRB Memo Addresses Electronic Monitoring and Algorithmic Tools’ Effects on Employee Section 7 Rights
By: Kara Maciel and Darius Rohani-Shukla
On October 31, 2022, the National Labor Relations Board (the “Board”) General Counsel Jennifer Abruzzo sent a memo to all regional directors, officers-in-charge, and resident officers communicating her concerns over electronic monitoring and algorithmic management. The memo highlighted concerns that employers might be able to use those tools to impair or negate employees’ ability to exercise their rights under Section 7 of the National Labor Relations Act (the “Act”).
Technological advancements have enabled employers to surveil and analyze employees in increasingly intrusive ways. For example, employers can record workers’ conversations, track their movements with wearable devices, and monitor employees’ computers with keyloggers and software. Employers can also use algorithms to: identify disengaged employees at risk of leaving their employment; suggest career paths for current employees; assist employers through the performance management process; assess personality, aptitude, skills, and perceived “cultural fit;” and even monitor employee efficiency.
The Board has previously recognized that some employer surveilling practices are unlawful. In instances where employees are engaging in protected concerted activity and public union activity – the Board has acknowledged that photographing employees engaging in protected concerted activities is intimidating. An employer’s capacity to surveil its employees is analyzed by balancing its justification for the surveillance versus the apparent risk of interfering with or deterring employee activity.
Surveillance Technologies and Algorithmic Tools impact employees’ rights under Section 7 and Section 8(a)(1) of the Act:
- Section 7 of the Act guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”
- Section 8(a)(1) of the Act makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act.
Employer can violate Section 8(a)(1) through the following activities:
- Instituting new monitoring technologies in response to activity protected by Section 7;
- Utilizing technologies already in place to discover that activity, including by reviewing security-camera footage or employees’ social-media accounts;
- Creating the impression that it is doing such things; or
- Disciplining employees who concertedly protest workplace surveillance or the pace of work set by algorithmic management.
Electronic Surveillance in the Workplace
Continue readingHurricane Headaches: HR Tips for Employers
By: Kara M. Maciel
As hurricane season begins, and Hurricane Ian being the first to make landfall in the Southeastern United States, employers need to make sure their employees, customers, and guests are safe from the storms.
Natural disasters such as hurricanes, earthquakes and tornadoes have posed unique human resource (HR) challenges from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time.
Although no one can ever be fully prepared for such natural disasters, it is important to be aware of the federal and state laws that address these situations. Our guidance can be used by employers in navigating through the legal and business implications created by events such as hurricanes. In addition, the information may be applicable to other crises and disasters, such as fires, flu epidemics and workplace violence.
Frequently Asked Questions
If a work site is closed because of the weather or cannot reopen because of damage and/or loss of utilities, am I required to pay affected employees? Continue reading
After the Supreme Court’s Ruling in Dobbs, Employers Explore Options in Providing Travel-for-Care Benefits
In the wake of the U.S. Supreme Court’s decision in Dobbs, State Health Officer of the Mississippi Department of Health v. Jackson Women’s Health Organization, et. al., employers across the country have faced uncertainty in how to navigate the various federal and state laws regarding health-related services for their employees. This is particularly challenging for employers in states that have laws that provide for criminal liability. The Dobbs decision may impact how employers modify their employee benefit plans or create new plans to cover the cost of travel and lodging for medical care, including abortion, that require travel out of state.
Texas’ bounty law is likely the most novel and we have received many questions on whether a company could face criminal liability under that statute for providing benefits to travel of state. Texas Senate Bill 8 prohibits physicians from performing or inducing abortions if the physician detected a fetal heartbeat or failed to perform a test to detect a fetal heartbeat. Notably, this law authorized a private civil right of action – allowing any individual in the state of Texas to bring a civil action against any person [which while undefined in the Bill, in other contexts in the Texas code, does include corporations] who:
(1) performs or induces an abortion in violation of this subchapter;
(2) knowingly engages in conduct that aids or abets the performance or inducement of an abortion through insurance or otherwise, if the abortion is performed or induced in violation of this subchapter, regardless of whether the person knew or should have known that the abortion would be performed or induced in violation of this subchapter; or
(3) intends to engage in the conduct described in subdivision (1) or (2).
See TX SB8 Sec. 171.208
If a company wanted to offer coverage for procuring abortions in other states through its health benefit plans, there are several legal considerations that the company should be aware of. First, under TX SB8 Sec. 171.208 (2), it is unlawful for any individual to aid or abet an individual in procuring an abortion. The Texas statute specifically prohibits “abortion[s] of unborn child[ren] with detectable fetal heartbeat[s]” and outlaws the conduct of physicians that “knowingly perform or induce an abortion on a pregnant woman if the physical detected a fetal heartbeat.” The statute itself defines a physician as “an individual licensed to practice medicine in this state.” So, the violations referenced in the statute arguably are limited only to those abortions conducted contrary to the statute by Texas physicians. If an organization’s health plan allows, as a benefit, costs to be recovered for traveling to procure an abortion in another state – then that would not be an action that would incur civil liability by a Texas physician. The statute legislates that abortions performed by Texas physicians are unlawful; it does not refer to travel to other states, and no court has yet opined on the scope of the statute in that context. But, even if a lawsuit was brought under that theory, the company could raise the general presumption against extraterritorial application of state law.
Continue readingHistoric U.S. Supreme Court Confirmation Hearings Begin for D.C. Circuit Judge Ketanji Brown Jackson
This week, hearings before the Senate Judiciary Committee began for D.C. Circuit Judge Ketanji Brown Jackson’s nomination to the U.S. Supreme Court, which would make her the fourth woman Justice to serve on the Court at the same time. President Biden nominated Judge Jackson earlier in March to replace Justice Stephen G. Breyer who is retiring after over 20 years on the Court. The nomination is historic for several reasons and with the hearings occurring during Women’s History month, it is an example of the importance of honoring diversity at all levels of the branches of government.
During the first day of her confirmation hearings, Judge Jackson detailed her personal and professional history. She spoke in personal terms about her childhood, including her first exposure to the law as a young child while her father was a full-time law student, and her mother supported their family. She introduced her daughters and talked about navigating “the challenges of juggling my career and motherhood.”
Continue readingBREAKING – 6th Cir. Lifts Stay of OSHA’s Vaccinate-or-Test Emergency Temporary Standard
By Conn Maciel Carey’s COVID-19 Task Force
We apologize for interrupting what we hoped be a quiet, pre-holiday weekend for everyone, but we have very important and time sensitive news to share about the status of OSHA’s Vaccination, Testing, and Face Coverings Emergency Temporary Standard (ETS). It was a very busy Friday night for everyone in the OSHA world. In a remarkable turn of events, at 6:50 PM yesterday evening (December 17th), the US Court of Appeals for the Sixth Circuit dissolved the nationwide stay of OSHA’s Vaccination ETS that had been issued by the Fifth Circuit in November.
The Department of Labor and OSHA then immediately issued a statement that OSHA was moving forward with implementation and enforcement of the ETS, but also provided some enforcement relief for companies able to demonstrate good faith efforts to comply. Then, within an hour of the Sixth Circuit decision being released, numerous parties filed an emergency application and motion with the US Supreme Court requesting the Supreme Court reissue a stay of the ETS. And then, finally, shortly after midnight (approximately 1 AM last night), South Carolina along with 26 other State Attorneys General and a host of private entities also filed an emergency application for a stay. What a night.
We briefly summarize the Sixth Circuit’s decision below and explain the lay of the land as it stands at this moment, what might occur next and, most importantly, what this means for employers across the nation. Bottom line is that events are moving fast, but as we said a few weeks ago, do not put a fork in the ETS, and continue to prepare to come into compliance with it. It is alive and well, at least until we hear from the Supreme Court.
Sixth Circuit Decision
In a 2-1 opinion written by Obama-appointee Judge Jane Stranch and, notably, joined by Bush appointee Judge Julia Gibbons, the Sixth Circuit rescinded the nationwide stay of OSHA’s ETS that had been issued by the Fifth Circuit first an administrative stay on November 6th and then as a TRO on November 12th. The three-judge panel that heard the case consisted of one Obama appointee, one Bush (W.) appointee, and one Trump appointee. Judge Gibbons (the Bush appointee) joined Judge Stranch, but she also wrote a separate concurring opinion. Trump-appointee Judge Joan Larsen, who had purportedly been on a Trump’s short-list of potential nominees to the Supreme Court, dissented.
In a nutshell, the Court’s rationale for lifting the stay is that Continue reading
OSHA Issues Its COVID-19 Vaccination, Testing, and Face Coverings Emergency Temporary Standard
By Conn Maciel Carey LLP’s COVID-19 Task Force
At long last, OSHA has revealed its COVID-19 Vaccination and Testing emergency regulation. The Federal Register site has updated to show the pre-publication package, which is set to run officially in the Federal Register tomorrow, November 5th. The 490-page package includes the Preamble and economic analysis of the regulation, as well as the regulatory text. The regulatory text begins on PDF page 473. Also here is a Fact Sheet about the ETS issued simultaneously by the White House.
We are extremely pleased to report that the rule aligns very well with positions for which CMC’s Employers COVID-19 Prevention Coalition advocated to OSHA and OMB on the most significant topics, like the responsibility for the cost of COVID-19 testing and a delayed implementation date, as well as very narrow record-preservation requirements, grandfathering of prior vaccine-verification efforts, and other elements. OSHA and the White House clearly listened to our views and the compelling rational we put forward for these positions, making the rule a much better, more effective and less burdensome one for employers.
Conn Maciel Carey’s COVID-19 Task Force will be conducting a webinar about the ETS on Wednesday, November 10th at 1:00 PM ET.Here is a link to register for that program.
In the meantime, below is a detailed summary of the rule:
What is the stated purpose of the regulation?
The ETS is “intended to establish minimum vaccination, vaccination verification, face covering, and testing requirements to address the grave danger of COVID-19 in the workplace, and to preempt inconsistent state and local requirements relating to these issues, including requirements that ban or limit employers’ authority to require vaccination, face covering, or testing, regardless of the number of employees.”
Who is covered?
As the president signaled in his announcement and action plan from September 9, the ETS applies only to employers with 100 or more employees, and the rule does make it explicit that the way you count those employees is on a company–wide basis, not establishment-by-establishment.
Continue reading