Gibbons Law Alert

Gibbons Law Alert

Author: Elizabeth Cowit

Proposed Nationwide FTC Ban on Non-Compete Clauses: UPDATE – Virtual Public Forum Scheduled for February 16, 2023

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Posted in General Litigation

On February 14, 2023

As we recently reported, in January 2023, the Federal Trade Commission (FTC) announced a proposed nationwide ban on non-compete clauses. The proposed rule would restrict employers from enforcing all existing and future non-compete agreements with their employees. The FTC announced that it will host a free and open public forum on Thursday, February 16, 2023, from 12 p.m. to 3 p.m. EST, examining the proposed rule and providing the public (workers and business owners) with an opportunity to ask questions, express concerns, and share their past experiences with non-competes. Attendees may register to speak at the forum on the FTC’s website. Registration to speak is on a first come, first served basis. Details about the forum and registration may be found here. The public may also submit written comments on the proposed ban through March 20, 2023, at Regulations.gov. Interested parties should monitor the situation accordingly and consider contacting the firm if they have questions about the proposed rule or seek guidance ahead of the forum and comment period deadline.

The Federal Speak Out Act and Implications for Employers

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Posted in Employment Agreements

On January 10, 2023

In December 2022, President Biden signed into law the Speak Out Act (the “Act”), which has become effective. As discussed below, the Act prohibits pre-dispute nondisclosure and nondisparagement agreements relating to sexual assault and sexual harassment disputes. In connection with the new law, Congress presented, inter alia, the following findings: Sexual harassment and assault continue to be pervasive in the workplace. 81 percent of women and 43 percent of men experience some type of sexual harassment or assault in their lifetime. One in three women has encountered sexual harassment in the workplace, yet an estimated 87 to 94 percent of those who have experienced harassment never file any type of formal complaint. Many women leave their job or industry or pass up advancement opportunities as a result of sexual harassment. To combat sexual harassment and assault, victims must be able to report and publicly disclose such issues. Nondisclosure and nondisparagement provisions in agreements between employers and employees can allow harassment and assault to continue by silencing victims and those with knowledge of the conduct, while protecting those engaging in such conduct, thus allowing it to continue. Prohibiting nondisclosure and nondisparagement clauses will provide transparency around unlawful conduct, allow victims to come forward, hold perpetuators accountable, and make workplaces safer. Explanation of the Act The Act...

Proposed Nationwide FTC Ban on Non-Compete Clauses

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Posted in General Litigation

On January 6, 2023

On January 5, 2023, the Federal Trade Commission (FTC) announced a proposed rule (“Rule”) that would effectively impose a nationwide ban on all existing and future non-compete clauses between workers and employers. By way of background, a non-compete clause is a type of restrictive covenant that prevents a worker from working for a competitor or starting a competing business, generally within a certain geographical area and time frame after the worker’s employment ends. The FTC’s position, as stated in the Rule’s overview, is that non-compete clauses prevent workers from leaving jobs, lower competition for workers, and reduce wages. According to the FTC, non-compete clauses also stop new businesses from forming, stifle entrepreneurship, and prevent novel innovation that would take place if workers were able to freely share ideas. On the other hand, proponents of non-compete clauses have historically argued, among other things, that they are necessary to protect an employer’s confidential information, trade secrets, and intellectual property and its often considerable investment in the training and development of  its employees. Non-compete agreements are currently subject to state law. Key components of the proposed Rule include: Providing that it is an “unfair method of competition” for an employer to enter into a non-compete clause with a worker, attempt to do so, or inform a worker they...

New York City Pay Transparency: What Employers Need to Know

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Posted in Discrimination / Policies and Handbooks

On October 26, 2022

Effective November 1, 2022, covered employers in New York City must comply with new legislation concerning pay transparency. Specifically, the New York City Pay Transparency Law (“Pay Transparency Law” or “Law”) amends the New York City Human Rights Law (NYCHRL) by requiring employers to include minimum and maximum base salaries and wages for a position when advertising or posting a job, promotion, or transfer opportunity. We discuss the new law and guidance issued by the New York City Commission on Human Rights (“Commission”) below. New York City joins a number of other jurisdictions that have passed some form of a pay transparency law, including California, Colorado, Connecticut, Maryland, Nevada, Rhode Island, and Washington. Who Are “Covered Employers?” The Pay Transparency Law applies to all New York City employers with at least four employees (which includes owners and individual employers). For counting purposes, all four employees need not work in New York City or in the same location. Instead, a particular workplace is covered so long as one of the employees works in the city. Employment agencies are also covered by the Law regardless of size, but the Law excepts temporary help firms seeking applicants to join their pool of available workers. What the Pay Transparency Law Requires Any advertisement for a job, promotion, or transfer...

NLRB Reaffirms Test Set Forth in Republic Aviation With Respect to Employees’ Right to Display Union Insignia Under the NLRA

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Posted in Labor

On October 17, 2022

Recently, in Tesla, Inc., the National Labor Relations Board (NLRB) held that Tesla had violated the National Labor Relations Act (NLRA) by banning workers from wearing pro-union attire, and reaffirmed the long-standing precedent established by the Supreme Court in Republic Aviation Corp. and its progeny, holding that when an employer attempts to impose any restriction on a worker’s right to display union insignia, the employer must prove “special circumstances” justifying the restriction. By way of background, Tesla manufactures electric vehicles at a facility in Fremont, California, where they are assembled by production associates in General Assembly (“GA”). Tesla’s team-wear policy requires its production associates to wear black cotton shirts with the company logo or plain black T-shirts, along with black cotton pants. In the spring of 2017, there was a union organizing campaign, during which the associates began to wear black shirts with pro-union insignia as opposed to team wear. Shortly after the workers had started wearing the pro-union apparel, Tesla began to strictly enforce its team-wear policy, which it had not done previously and which prohibited workers from wearing the black pro-union shirts rather than the required team-wear shirts. Pro-union insignia, however, was not banned completely, as the associates were permitted to wear union stickers on their team-wear shirts. The union’s organizing campaign ultimately...

The New Jersey Cannabis Regulatory Commission Issues Much-Needed Interim Guidance on Managing Employees Working While Under the Influence of Cannabis Products

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Posted in Discrimination

On October 13, 2022

The enactment of the New Jersey Cannabis Regulatory Enforcement, Assistance, and Marketplace Modernization Act (CREAMMA), signed into law in February 2021, legalized the recreational use of marijuana for adults ages 21 and older in New Jersey. However, the right to marijuana use is not unfettered, and an employer’s right to maintain a drug-free workplace is often easier said than done where cannabis is concerned. Under CREAMMA, an employer cannot discharge or take any other adverse action against an employee because the employee uses cannabis items outside of the workplace. An employer may, however, require an employee to undergo a drug test: Upon reasonable suspicion of an employee’s use of a cannabis item while performing his or her work responsibilities, or Upon finding any observable signs of intoxication related to use of a cannabis item, or Following a work-related accident subject to investigation by an employer In this regard, CREAMMA directs the Cannabis Regulatory Commission (CRC), the entity tasked with crafting and enforcing rules and regulations governing the sale and use of cannabis in New Jersey, to prescribe regulations for issuing a Workplace Impairment Recognition Expert (WIRE) certification to full- or part-time employees or others contracted to provide services on behalf of an employer. Through education and training, a WIRE becomes certified in detecting and identifying...

New Jersey Supreme Court Rules on Worker Classification Under the “ABC Test”

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Posted in Unemployment

On September 12, 2022

In East Bay Drywall, LLC v. Department of Labor & Workforce Development, the New Jersey Supreme Court upheld a determination by the Department of Labor and Workforce Development (“the Department”) that 16 workers (individuals and business entities) were misclassified as independent contractors, even though East Bay had provided business registrations and insurance certificates for the workers in question. By way of background, East Bay is a drywall installation business that hires installers on a per-job basis. The Department conducted a routine audit and determined that 16 of East Bay’s workers were improperly classified as independent contractors, instead of employees, and thus directed the company to pay unemployment and temporary disability benefit contributions for these misclassified workers. East Bay challenged the audit results and requested a full evidentiary hearing, which was held before an administrative law judge in the Office of Administrative Law (OAL). At the hearing, East Bay’s principal, Benjamin DeScala, testified that once a project bid was accepted, East Bay contacted workers who were free to accept or decline East Bay’s offer of work, and some had even left mid-project if they found a better opportunity. DeScala explained that some workers had told him they had worked for other businesses, but he did not provide any evidence to support that claim. DeScala also stated...

OSHA Issues Updated COVID-19 Guidance

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Posted in Policies and Handbooks

On September 14, 2021

The United States Department of Labor’s Occupational Safety and Health Administration (OSHA) recently updated its Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace (“Guidance”), to bring it in line with the most recent recommendations published by the Centers for Disease Control and Prevention (“CDC”) on July 27, 2021, which were updated in view of the Delta variant. The updated Guidance is designed to help employers (outside of healthcare) protect workers who are “unvaccinated” or otherwise at risk, and differentiates, in certain respects, as to recommendations for unvaccinated and vaccinated employees, with vaccinated employees not subject to the same level of precautionary measures as their unvaccinated peers. The Guidance recommends that employers engage with their employees – and, where applicable, employee representative associations – to determine how to implement multilayered interventions to protect unvaccinated and otherwise at-risk employees, and to mitigate the spread of COVID-19 at the workplace. The recommended interventions are summarized, in part, below: Facilitating Vaccinations: Employers should grant employees paid time off to obtain the COVID-19 vaccine and to recover from any side effects. Employers should also consider working with local public health authorities to provide vaccinations in the workplace and should adopt policies that require employees to either get vaccinated or undergo regularly scheduled Covid testing in addition...

New Jersey Enacts Three Laws with Enhanced Penalties for Employer Misclassification

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Posted in Wage and Hour

On July 20, 2021

On July 8, 2021, Governor Murphy signed into law three bills that amend the Worker Misclassification Package signed into law in January 2020 and intensify penalties against employers that misclassify workers. As employment practitioners across the state will recall, the Misclassification Package signed into law in January 2020 consists of a number of laws that grant the Commissioner of Labor and Workforce Development (“Commissioner”) the power to assess penalties against any employer that misclassifies its employees and to issue stop-work orders at the location where any state wage, benefit, or employment tax law violation is found. The laws included in the previously enacted Misclassification Package also allow the New Jersey Department of Labor (NJDOL) to post on its website a list of employers who have been found to misclassify their workers and to create joint liability for employers and staffing agencies for violations of state wage and hour laws. For a more detailed look at the Misclassification Package, see here.

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