Labor and Employment

FTC Moves to Ban the Use of Noncompete Agreements by All Employers

Kara Maciel Leave a comment

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 →

[Webinar] Practical Advice for Responding to Administrative Charges of Discrimination and Retaliation

Theresa Jordan Leave a comment

On Wednesday, November 16, 2022 at 1 p.m. EST, join Lindsay A. DiSalvo and Megan S. Shaked for a webinar regarding Practical Advice for Responding to Administrative Charges of Discrimination and Retaliation.

When an administrative agency, like the federal Equal Employment Opportunity Commission (“EEOC”), receives a complaint of discrimination or retaliation, the employer is given an opportunity to respond and provide information/evidence pursuant to the agency’s investigation of the complaint. In its response, the employer can explain why the action taken against the employee was legitimate or did not occur as alleged. These responses are an opportunity for the employer to provide sufficient information to avoid further action by the administrative agency or potentially litigation of the claim(s). A strong response could demonstrate there is no support for the complaint and resolve the complaint in a favorable manner for the employer. However, these responses can also create a written record of admissions to which the agency can hold the employer accountable, and any supporting documentation may be closely scrutinized and used to establish liability. Thus, employers must be thoughtful in sharing information at this early stage and should ensure there is a procedure in place for managing and developing these responses.

Participants in this webinar will learn about: Continue reading →

NLRB Memo Addresses Electronic Monitoring and Algorithmic Tools’ Effects on Employee Section 7 Rights

Kara Maciel Leave a comment

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 reading →

California Confirms Meal and Rest Period Claims are a Hook for Attorney’s Fees Awards

Samuel Rose Leave a comment

By Samuel Rose and Megan Shaked

A few months ago, we wrote a blog article on the California Supreme Court’s decision in Naranjo v. Spectrum Security Services, Inc., which held that premium pay for meal and rest break violations is considered “wages,” paving the way to award waiting time and wage statement penalties based on meal/rest period violations alone. We noted that the practical impact of the Naranjo decision could be to encourage class action and PAGA (Labor Code Private Attorneys General Act) litigation within California by providing further remedies in meal and rest period litigation and inflating the settlement value of these cases.

Now, we are starting to see the real impacts of the Naranjo decision. The California Court of Appeal has issued its decision in Betancourt v. OS Restaurant Services, LLC after remand from the Supreme Court with instructions to reconsider its initial opinion in light of Naranjo. Originally, the Court of Appeal decided in Betancourt that, based on Kirby v. Inmoos Fire Protection, Inc. (2012) 53 Cal.4th 1244, an action brought for failure to provide meal and rest breaks is not based on nonpayment of wages. That meant that the Plaintiff could not recover for waiting time penalties and wage statement violations, and that the Plaintiff could not recover attorney fees under Labor Code section 218.5(a).

In applying Naranjo, the Court of Appeal in Betancourt had to reverse course, confirming that Continue reading →

[Webinar] Wage and Hour Best Practices

Theresa Jordan Leave a comment

On Thursday, August 11, 2022 at 1 p.m. EST, join Andrew J. Sommer and Ashley D. Mitchell for a webinar regarding Wage and Hour Best Practices.

Employers are subject to numerous federal and state laws governing employee wages, the hours of work for which an employee must be paid, and the frequency and duration of breaks an employee is entitled to during the workday. Wage and hour issues are further complicated by a shift to remote work during the pandemic. Even the best-intentioned employers could face a multimillion-dollar wage and hour class action. This webinar will give you a blueprint for best practices and common pitfalls to avoid and mitigate the risk of future wage and hour litigation.

Participants in this webinar will learn about: Continue reading →

DC Walks Back Certain Aspects of its Pending Ban on Non-Compete Agreements

Jordan B. Schwartz Leave a comment

DC employers may be aware of the District of Columbia’s impending ban on non-compete agreements, which originally was scheduled to become effective on October 1, 2021 and which was set to become one of the most explicit bans on non-compete agreements in the nation.

"upset,At,You,For,Breaching,The,Non-compete?,Of,Course,Not."The initial iteration of the law, titled the “District of Columbia Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”), prohibited employers from requiring employees who perform work in Washington D.C. (or a prospective employee whom the employer reasonably anticipated would perform work in Washington, DC), from signing any agreement that included a non-compete provision.  The Act also made it unlawful for employers to have any workplace policy prohibiting employees from (i) being employed by another person; (ii) performing work or providing services for pay for another person; or (iii) operating their own business.  In other words, the Act rendered virtually all non-compete provisions unenforceable and forbade employers from instituting workplace policies, such as anti-moonlighting rules, that limit employees’ ability to work for other people or start their own business.

However, along with the effective date of the Act being delayed several times (first to April 1, 2022 and now to October 1, 2022), the D.C. Council recently passed the Non-Compete Clarification Amendment Act of 2022 (the “Clarification Amendment Act”), which tempers certain aspects of the law.

First, the Clarification Amendment Act explains that Continue reading →

Both Employees and Employers Benefit from Revisions to Washington, D.C. Paid Leave Law

Jordan B. Schwartz Leave a comment

Just two years after the enactment of Universal Paid Family Leave Act, it appears that thousands of private-sector employees in Washington, D.C. will receive a substantial increase in the annual amount of paid leave to which they are entitled. At the same time, D.C. employers will receive a significant tax cut to the amount they are required to pay to fund this program.Retro,Styled,Alarm,Clock,Covered,Pile,Of,Money,Isolated,On

The Universal Paid Family Leave Act, which took effect in July 2020, allows eligible D.C. employees to take up to (i) eight weeks for parental leave; (ii) six weeks for family medical leave; and (iii) six weeks for personal medical leave.  This program, which is funded through employer-paid taxes, has cost less than previously forecast and now has excess funds. 

As a result, in a letter sent last week to Mayor Muriel Bowser and D.C. Council Chairman Phil Mendelson, D.C.’s Acting Chief Financial Officer Fitzroy Lee stated that by as early as July 1, 2022, employees will now receive (i) twelve weeks for parental leave; (ii) twelve weeks for family medical leave; and (iii) twelve weeks for personal medical leave. In other words, eligible employees will now be able to take double the amount of paid leave for family medical leave and personal medical leave, and 66% more parental leave, than they currently receive. Eligible employees also will now be entitled to a new benefit of two weeks of paid prenatal leave, which was not previously available.

Employees will not be the sole beneficiary to the changes to the Universal Paid Family Leave Act.  Because of the excess funds currently available, the private employers who pay for this leave program will Continue reading →

DOL Sues Employer Over Pile of Pennies

Lindsay A. DiSalvo Leave a comment

By Lindsay A. DiSalvo

Pennies,Coins,MoneyWe thought it would be a good break from all the COVID-19-related coverage to delve into a retaliation case under the Fair Labor Standards Act (“FLSA”) through the lens of an interesting recent complaint filed by the Department of Labor (“DOL”) involving…a huge pile of pennies. A review of the case addresses both the types of actions that would be considered retaliatory under the law, as well as the significance of proximity when analyzing the viability of a case of retaliation. The facts as alleged by the DOL also act as a warning against the role internet postings can play in supporting a legal action.

Facts as Asserted in the Complaint

Though somewhat extraordinary, the facts in the case seem fairly straightforward. Per the DOL’s Complaint, Continue reading →

[Webinar] Avoiding Common Pitfalls of Company Trade Secret and Non-Compete/Non-Solicit Agreements

Theresa Jordan Leave a comment

On Wednesday, November 17, 2021 at 1:00 p.m. ET, join Jordan B. Schwartz and Megan S. Shaked for a webinar regarding Common Pitfalls of Company Trade Secret and Non-Compete/Non-Solicit Agreements.

Employment agreements and settlement agreements can be an effective way to address employer concerns regarding unfair competition and trade secret protections. Equally important is avoiding the pitfalls of non-compliant provisions. This webinar will review the scope of permissible provisions relating to non-compete and other restrictive covenants, state law efforts to push back on overly broad and restrictive agreements, and best practices for avoiding potential employment claims.

Participants in this webinar will learn: Continue reading →

Employee Handbooks, Training, and Internal Audits [Webinar Recording]

Theresa Jordan Leave a comment

On September 21, 2021, Aaron R. Gelb and Beeta B. Lashkari presented a webinar regarding Employee Handbooks, Training, and Internal Audits.

While few, if any, employers had time to develop state-of-the-art policies or revamp their training programs in 2020 for matters unrelated to COVID-19, they would be wise to consider taking proactive steps as the world returns to some semblance of normalcy. As employees begin to focus on more mundane matters, they would do well to remember that a well-drafted, up-to-date employee handbook tailored to your organization is an essential element of your compliance program. Effective and engaging training is necessary to communicate your policies and priorities to your employees, and to ensure your managers understand their roles and what is expected of them. A state-of-the-art handbook and top-shelf training will be of little value, however, if your employees and/or managers are not following those policies, it is critical that you conduct compliance audits to ensure your organization is walking the talk.

Participants in this webinar learned: Continue reading →