Category: Strategic counseling

We Are Hiring: PA Superior Court Upends the Law on “No Hire” Agreements

Scott F. Cooper

Countless companies contract with other companies to provide services and include a “no hire” provision (pursuant to which the parties to the contract agree to not hire employees of the contracting company) in the service contract. The goal of these provisions is to prevent the contractual business partner from raiding the other’s talent—at least not without paying a fee.

In what the Court acknowledged was the first test of this issue in Pennsylvania, earlier this month the Superior Court invalidated a “no hire” agreement between companies—even though they were not competitors. The Court reasoned that companies may enter into agreements barring solicitation of customers, but they cannot agree to “no hire” provisions. Non-compete agreements between employer and employee are still valid, but not via company-to-company “no hire” clauses. Continue reading “We Are Hiring: PA Superior Court Upends the Law on “No Hire” Agreements”

#TakeTheLead: California Employment Laws Boldly Go Where No Legislation Has Gone Before

Emily K. Borman

Unless you’ve been living under the Starship Enterprise, you’ve seen the laundry list of new laws recently passed by the California legislature, which went into effect this year. If you do business in the Golden State, you need a clear and concise understanding of what these new laws mean to your business. To assist, we’re rolling out a series of blog posts to spotlight some of the most far-reaching and significant California legislation to date.

Today, our focus is on #MeToo-inspired legislation, as we examine California’s newest sexual harassment laws and how they affect your business.

Now that we’ve got your attention…Warp Speed Ahead! Continue reading “#TakeTheLead: California Employment Laws Boldly Go Where No Legislation Has Gone Before”

Garden State Says #MeToo: Bill Barring Non-Disclosure Clauses Passes in Both Chambers

Asima J. Ahmad

New Jersey appears to be the next state to ban non-disclosure clauses in employment contracts or settlement agreements. On January 31, 2019, Senate Bill 121 passed the New Jersey Assembly by a 68-4-4 vote and the Senate in a 36-0 vote, sending the bill to Governor Phil Murphy’s desk.

Not Just About Non-Disclosure. The bill was introduced early last year in response to the #MeToo movement and deems unenforceable and against public policy any employment contract provision that either waives substantive or procedural rights or remedies relating to claims of discrimination, retaliation, or harassment, or has “the purpose or effect of concealing the details” of such any such claim. In effect, the bill prohibits forced arbitration of discrimination, retaliation, or harassment claims—of course, that includes sexual harassment claims. Similarly, the bill prohibits confidentiality or non-disclosure provisions from being included in employment contracts or settlement agreements involving those same types of claims. The bill does not prohibit employers from including noncompetition provisions in employment agreements, or from prohibiting the disclosure of proprietary information, which includes non-public trade secrets, business plan, and customer information. Continue reading “Garden State Says #MeToo: Bill Barring Non-Disclosure Clauses Passes in Both Chambers”

Hold onto Your Hats! DOL Sends “Regular Rate” Rule for Review

Jason E. Reisman

On January 23, 2019, the Department of Labor (“DOL”) passed along another potential bombshell rule (see our prior post here on the white collar exemption salary threshold rule that’s also currently under review) to the White House Office of Information and Regulatory Affairs (“OIRA”)—this time, it’s a proposed rule to update and clarify the definition of “regular rate” under the Fair Labor Standards Act (“FLSA”). Here’s what the DOL said in its fall 2018 agenda:

The Department believes that changes in the 21st century workplace are not reflected in its current regulatory framework. … The Department is interested in ensuring that its regulations provide appropriate guidance to employers offering these more modern forms of compensation and benefits regarding their inclusion in, or exclusion from, the regular rate. Clarifying this issue will ensure that employers have the flexibility to provide such compensation and benefits to their employees, thereby providing employers more flexibility in the compensation and benefits packages they offer to employees. Similarly, the Department believes that the proposed changes will facilitate compliance with the FLSA and lessen litigation regarding the regular rate.

Once OIRA reviews the rule, it can be released to the public for comment.

Sounds fantastic, doesn’t it? Can’t wait to see what new and wonderful clarity the DOL has to offer—remember, the general rule is that the “regular rate” (which is used for the calculation of overtime pay for non-exempt employees) must include all forms of remuneration for employment, other than certain specified exceptions. We should expect some employer-favorable clarifications to those “exceptions,” which could relate to the ever-elusive concept of “discretionary bonuses,” and other compensation perks.

Get excited—the Trump DOL is working for you (employers of the world, that is)!

It’s Back!! New DOL Salary Threshold Rule Is on the Doorstep!

Jason E. Reisman

Just when you thought it was safe to go back in the water, the U.S. Department of Labor (“DOL”) reappears to address an issue that has most American employers on edge: How far will it expand the scope of who is eligible for overtime pay? After taking what seems like forever, the Trump DOL—despite the government shutdown—has apparently now completed its long-awaited revised new rule to reset the minimum salary threshold for employees subject to the Fair Labor Standards Act’s white collar exemptions.

We all remember the Obama DOL’s effort to expand overtime eligibility to four million currently-exempt employees by increasing the salary minimum by more than double, to $47,476 (which was blocked by a federal judge in Texas). The real question for now is, what has the Trump DOL decided is the “correct” new salary level? All signs point to a figure in the low to mid-$30,000s. We should find out very soon.

For now, sources are reporting that the finalized proposed new rule is about to be submitted (maybe today) to the White House’s Office of Information and Regulatory Affairs (“OIRA”) for review. This is the first step in the process before the proposed rule is released to the public for comment. Though the federal government is currently shut down, the White House is working. The last agenda issued by the DOL stated that this new rule would be released in March, so they seem to be on track for that.

So … stay tuned— “Same Bat time, same Bat channel!” More to come.

ALERT: New Jersey Raising Minimum Wage!

Thomas J. Szymanski

New Jersey’s minimum wage will increase by 25 cents, from $8.60 to $8.85 per hour, effective January 1, 2019. For non-exempt employees making the minimum wage, employers will be required to pay an overtime rate of $13.28 for every hour worked over 40 in a work week, to comply with the State’s minimum wage requirements.

Employers should be aware that one of Governor Phil Murphy’s top legislative priorities is to increase the minimum wage to $15 per hour. Although the Legislature passed a $15-an-hour minimum wage bill in 2016, which was vetoed by then-Governor Chris Christie, neither Governor Murphy nor the Legislature has communicated a path forward to get another bill on the table.

As wage payment violations carry significant penalties in New Jersey, you should contact a member of Blank Rome’s labor & employment practice group if you have any questions about compliance with New Jersey’s minimum wage increase or any other wage and hour issues.

Requesting a Background Check to Make an Employment Decision? Read This First.

Thomas J. Szymanski

The Fair Credit Reporting Act (“FCRA”) provides federally-imposed limitations on all employers who seek information from a Consumer Reporting Agency about an applicant or employee for use in making an employment decision, such as a hiring or promotion. The FCRA contains specific notice, authorization, and reporting requirements related to obtaining a Consumer Report, including credit reports and criminal background checks, and potentially taking an adverse employment action based on that information.

Requirements before you request a Consumer Report: Continue reading “Requesting a Background Check to Make an Employment Decision? Read This First.”

Update on New Jersey Paid Sick Leave Act

Mark Blondman

In an earlier post, we provided a preview of the New Jersey Paid Sick Leave Act. The Act goes into effect on October 29, 2018. Last week, the Department of Labor and Workplace Development, the state agency responsible for interpreting the Act, published a “Notice of Employee Rights” under the Act and a copy of that Notice/Poster is available here. The Notice must be posted by employers in conspicuous locations in every worksite in New Jersey and must be distributed to all New Jersey employees by November 29 and at the time of hiring for all new employees hired after October 29.

The Act imposes significant obligations on employers in New Jersey. You can contact a member of Blank Rome’s labor & employment practice group if you have any questions about what needs to be in your policies.

NY Harassment Training Deadline Extended!

Mark Blondman

As we have advised you in previous blog posts, New York State has passed legislation mandating that employers adopt an anti-harassment policy and conduct harassment training for all employees. The law requires that, by October 9, 2018, employers distribute to employees in New York State a written policy that meets certain prescribed legal standards.

Earlier this week, New York State issued a final set of employer guidance materials on sexual harassment prevention, including model training materials and Minimum Standards for Sexual Harassment Prevention Policies, a Model Sexual Harassment Prevention Policy, and a Model Complaint Form. Employers are permitted to implement the Model Policy or may develop policies on their own as long as they meet minimum legal requirements.

Most importantly, although the New York law had originally required that employers conduct harassment training for all employees by January 1, 2019, the guidance issued this week extends the deadline to October 9, 2019. Please use this additional time effectively!

OFCCP Is Staying Busy—So Should Government Contractors

Merle M. DeLancey Jr.

In February, the Office of Federal Contract Compliance Programs (“OFCCP”) sent Corporate Scheduling Announcement Letters (“CSALs”) to 1,000 contractor establishments. Shortly thereafter, in March, OFCCP mailed follow-up compliance review scheduling letters (“Scheduling letters”). On September 7, 2018, OFCCP sent a second round of CSALs to an additional 750 contractor establishments.

Further, on September 19, 2018, OFCCP issued Directive 2018-08: Transparency in OFCCP Compliance Activities. The purpose of the Directive is to “ensure transparency in all stages of OFCCP compliance activities to help contractors comply with their obligations and know what to expect during a compliance evaluation, and to protect workers from discrimination through the consistent enforcement of OFCCP legal authorities.” The Directive identifies the “Roles and Responsibilities” of OFCCP and contractors during a compliance review and the “Policies and Procedures” that will be followed. Continue reading “OFCCP Is Staying Busy—So Should Government Contractors”