Publications

The Federal Trade Commission issued a proposed rule on January 5, 2023, that would ban the use of so-called “non-compete” agreements, which are often used in certain industries to protect intellectual property and the companies’ investment in training their employees. According to the FTC, approximately 30 million employees are bound by such agreements, and because they decrease competition for workers, they lower wages across the board. “Non-compete clauses also prevent new businesses from forming, stifling entrepreneurship, and prevent novel innovation which would otherwise occur when workers are able to broadly share their ideas.” The FTC estimates that its proposed rule would increase American workers’ earnings “between $250 billion and $296 billion per year.”

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Passed in 2018, the District of Columbia’s Tipped Wage Workers Fairness Amendment Act’s (TWWFA) mandatory sexual harassment training provisions are now in effect. Employers with workers for whom an employer takes a tip credit must take several steps related to sexual harassment policies and training. Employers must ensure that they:

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On October 24, 2022, the Sixth District issued a decision in in Camp v. Home Depot, handing employees a major win in the wage and hour arena by holding that Home Depot’s practice of rounding hourly employees’ total daily worktime to the nearest quarter hour, rather than using the actual worktime recorded by Home Depot’s timekeeping system “Kronos.” The Court found the rounding resulted in the failure to pay employees for all time worked. Plaintiffs Camp and Correa filed a putative class action for unpaid wages and unfair competition, and Home Depot moved for summary judgment on the basis that the rounding policy was neutral on its face, neutral as applied, and lawful under See’s Candy Shops, Inc. v. Superior Court *(2012) 210 Cal.App.4th 889 (See’s). For the past ten years, *See’s has been cited in support of the rule that rounding is permissible if it “is neutral on its face and is used in such a manner that it will not result, over a period of time, in failure to compensate employees properly for all the time they have actually worked.” Granting summary judgment, the trial court reasoned that it could not disregard the binding appellate authority of See’s.

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The Department of Labor recently issued a new proposed rule distinguishing between employees, who are covered by the Fair Labor Standards Act, and independent contractors, who are not. This follows on the heels of a rule issued by the previous administration on the same topic, which has now been repealed. The previous rule elevated two factors (control and opportunity for profit or loss) as “core” factors above other factors in determining workers’ economic dependence on their employer, and slightly favored a finding of independent contractor status. The current proposed rule returns to a balanced review of factors, and is more geared to finding employee status, as the DOL expressly wants to ensure that workers are not deprived of their rights under the FLSA.

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1. Pay Transparency Law [SB 1162]

Starting on January 1, 2023, employers are required to do the following:

• Include the pay scale for a position in any job posting, whether the posting is internal or external (only for employers with 15+ employees).

• Upon an employee’s request, provide the pay scale for the position in which the employee is currently employed.

• Maintain records of each employee’s job title and wage rate history for the duration of an employee’s employment and three years after the end of the employment. These records shall be open to inspection by the Labor Commissioner.

• Provide pay scale data to any third-party who announce, post, publish, or otherwise make known a job posting to applicants.

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California’s Fair Employment and Housing Act prohibits employment discrimination based on certain protected classes and empowers the Civil Rights Department to investigate and prosecute complaints alleging unlawful practices. On September 18, 2022, Governor Gavin Newson signed AB 2188, which, upon its effective date of January 1, 2024, essentially adds a new category of protected persons – cannabis users.

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The subject of transgender Americans has been raised a lot recently, sometimes in political contexts, but regardless of the politics, it is important for employers to understand their obligations with respect to transgender employees and job applicants. On June 15, 2020, the Supreme Court held that discrimination against gay or transgender employees “simply for being homosexual or transgender” was clearly a violation of Title VII. Some localities, including New York City, have passed legislation mandating the use of employees’ chosen pronouns, and the EEOC notes that failure to do so can contribute to a hostile environment under Title VII. And the Fourth Circuit Court of Appeals recently decided that gender dysphoria, “discomfort or distress that is caused by a discrepancy between a person’s gender identity and that person’s sex assigned at birth,” which often accompanies transgender status, can be a “disability” under the Americans with Disabilities Act.

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Most California employers understand that they are required to provide suitable seating to employees when the nature of their work reasonably permits the use of seats. However, a California Court only recently opined on specifically what it means to “provide” suitable seating. In July of 2022, in Meda v. AutoZone, an Appellate Court ruled that employers may need to do more than simply have seats available in the workplace.

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There are two Georgia employment laws effective this summer that employers should be aware of in reviewing their policies.

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In December of 2020, the D.C. City Council passed the Ban on Non-Compete Agreements Amendment Act of 2020, which would have added D.C. to a growing list of states and localities that either completely ban or severely limit the enforcement of non-compete agreements by completely banning non-compete agreements within the District. However, after numerous delays and challenges from the public, the Council followed up with the Non-Compete Clarification Amendment Act of 2022 on July 12, 2022.

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