On May 30, 2023, General Counsel to the National Labor Relations Board (“NLRB”) issued a memorandum (“Memo”) informing its regional offices of the agency’s current stance on the enforceability of employee non-competition agreements. In brief, the NLRB’s position is that most non-competes imposed against non-supervisory employees violate the National Labor Relations Act (“NLRA”). The Memo
The Pregnant Workers Fairness Act (“PWFA”) will take effect on June 27, 2023. The law seeks to close long-standing gaps in the protections afforded to pregnant workers under other federal laws. The rights created by the statute are especially important for employees who live in jurisdictions without state or local laws requiring employers to make
As discussed in our previous blog, New York recently enacted a Compensation Transparency Law (CTL) that is set to take effect on September 17, 2023. Generally speaking, the law will require employers to disclose salary ranges in advertisements for job, promotion and transfer opportunities.
On March 3, 2023, Governor Kathy Hochul signed off on a series of amendments to the CTL, which are summarized below.
Continue Reading New York Amends Compensation Transparency Law in Advance of Effective Date
On the evening of September 25, 2008, federal regulators seized Washington Mutual (“WaMu”) in what was, and still is, the largest bank failure in United States history. The government immediately sold virtually all of WaMu to J.P. Morgan Chase (“Chase”), at which point Chase took control of all of WaMu’s branches and deposits, and became the employer of WaMu’s more than 43,000 workers.
In the ensuing months, WaMu’s headquarters, which were in Washington, were shuttered and its operations were moved to Chase’s New York headquarters and other locations throughout the country. Many WaMu branches were closed rather than rebranded as Chase locations. While some employees initially stayed on with Chase, thousands were laid off. Others were offered bonuses to remain with Chase temporarily for a transition period.
It is not uncommon for employers to offer departing employees a severance package in exchange for their signature on a separation agreement. The employer’s primary goal in doing so is often to secure a release of all claims the departing employee may have. But some employers want to impose other obligations on departing employees, like commitments to refrain from disparaging the employer or disclosing information about the employer/the agreement itself. Their ability to do so was recently limited by the decision of the National Labor Relations Board (NLRB) in McClaren McComb.
Many employment contracts contain non-competition clauses. There has long been a body of case law limiting the enforceability of these restrictive covenants in New York. For example, under the so-called BDO Seidman test, a non-compete provision is only enforceable if it is no greater than required to protect the legitimate business interests of the employer, does not impose undue hardship on the employee, and is not injurious to the public. See generally BDO Seidman v. Hirshberg, 93 N.Y.2d 382 (1999).
The BDO Seidman test and other judicially created rules governing non-competition clauses may soon fall by the wayside. On January 5, 2023, the Federal Trade Commission (FTC) issued a proposed rule (PR) that would largely ban non-competition provisions throughout the United States. The PR follows an executive order issued by President Biden on July 9, 2021, which urged the FTC to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”
Continue Reading What Employers Should Know About the FTC’s Proposed Ban on Non-Competition Clauses
On December 21, 2022, New York joined several other jurisdictions, including New York City, in enacting a compensation transparency law. All New York employers with four or more employees must begin complying with the law starting on September 17, 2023.
Continue Reading New York State Enacts Compensation Transparency Law