Photo of Kimberly Franko

Kimberly Franko

Subscribe to Kimberly Franko's Posts
Contact:Read more about Kimberly Franko

New York City employers are one step closer to learning the effective date of New York City’s pay transparency law (Local Law 32 for 2022, the “Salary Disclosure Law”). As we blogged about here, the Salary Disclosure Law will have its original May 15, 2022 effective date postponed to November 1, 2022…

New state and federal limits on post-employment restrictive covenants mean employers must stay on top of more than just vaccination policies or the logistics of office reopenings. The swath of new and on-the-horizon legislation aimed at limiting the enforceability of post-employment non-compete agreements deserves employers’ attention too. Part One of our blog post series on restrictive covenants addressed the intersection of remote work and state non-compete laws. Now, in Part Two, we summarize recent updates to state non-compete laws, pending state legislation that could impact non-competes, and new federal-level activity aimed at limiting non-competes.

State Updates

  • Colorado

Colorado recently raised the stakes for violations of its non-compete law. Effective March 1, 2022, under SB 21-271, a person who violates Colorado’s non-compete statute commits a class 2 misdemeanor.

Colorado’s non-compete statute (C.R.S. section 8-2-113) voids agreements that restrict trade, such as non-competition and non-solicitation of customers covenants, unless they fall within a specific statutory exception: (i) a contract for the purchase or sale of a business or its assets; (ii) a contract for protecting trade secrets; (iii) a contract provision recovering education or training expenses associated with an employee who has been with an employer for less than two years; or (iv) a restriction on executive or management personnel or each of their professional staff. As of March 1, 2022, a person who violates this statute commits a class 2 misdemeanor punishable by up to 120 days in jail and / or a fine of up to $750.

Many questions remain about the enforcement of this amendment, such as who will face ultimate liability for the employer (e.g., in-house counsel, HR staff, line managers, etc.). And though there is no indication that the new law is retroactive, Colorado employers were subject to criminal penalties for a violation of Colorado’s non-compete law even prior to SB 21-271 being passed, under C.R.S. section 8-2-115. SB 21-271 repealed C.R.S. section 8-2-115 while simultaneously inserting language into the non-compete statute itself making a violation a class 2 misdemeanor. It remains to be seen whether this is simple statutory consolidation, or a signal that Colorado plans to increase enforcement of violations of its non-compete statute. Employers should review their non-compete agreements and internal policies regarding which employees are required to sign such agreements to make sure they are in compliance with this new law.Continue Reading The Only Constant is Change: Recent (and Potential) Changes in State and Federal Non-Compete Legislation

Last week, New York City employers received more clarification on New York City’s new salary disclosure law (Local Law 32 for 2022, the “Salary Disclosure Law,” which we previously blogged about here). The New York City Commission on Human Rights (NYCCHR) released a Fact Sheet providing more details on employers’ obligations under…

The writing is on the wall: remote work is here to stay. According to data collected by Ladders, three million professional jobs in the US went permanently remote in the fourth quarter 2021 alone. By the end of 2021, 18 percent of all professional jobs in the US were remote. Ladders projects that number will be close to 25 percent by the end of 2022. Of course, this leaves employment lawyers and HR professionals wondering — what employment laws apply to our distributed workforce?

One particularly thorny issue facing employers in this context is the permissibility of post-termination non-competition agreements. Non-compete laws and their requirements differ greatly from state to state. For example, in Illinois, one of the requirements is that the employee must earn at least $75,000 annually in order to enter into an enforceable post-termination non-compete, but in Oregon, that minimum annual income threshold increases to $100,533 — and that same employee would be subject to no income threshold if Missouri law applied. On the other hand, in Colorado, where post-termination non-competes are generally unlawful, the employer could soon face misdemeanor criminal liability for seeking to enforce an unlawful post-termination non-compete against any employee, and in California, the employer could be exposed to compensatory and punitive damages if a claim is accompanied by other deemed tortious conduct (e.g., interference with the employee’s future employment prospects by seeking to enforce the unlawful agreement).

In this post, we analyze how remote work further muddles the already complicated landscape of post-termination non-competes and how employers can best navigate this complex backdrop.

What law applies? Guidance from recent case law

One issue arising out of remote work is knowing what state’s law will apply when it comes to the enforceability of non-compete restrictions. With remote work, long gone are the days where an employer can be relatively certain that the state where an employee is located at the beginning of the employment relationship will be the same state that employee is living and working in at the end of the employment relationship. As a result, when the need to enforce non-compete restrictions arises, the parties may dispute what state’s law should apply to the non-compete (e.g., the state where the employee was located when they entered into the contract, the state where the employee began work for the employer, or the state whether the employee was living or working at the end of the employment relationship).Continue Reading Navigating The Intersection Of Remote Work And State-Specific Post-Termination Non-Compete Laws

On March 3, President Biden signed the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act,” H.R. 4445, into law. The landmark legislation allows a plaintiff to elect not to arbitrate covered disputes of sexual assault or sexual harassment. To understand the implications of the new law, click here.

President Biden is expected to sign into law landmark #MeToo legislation, which allows a plaintiff to elect not to arbitrate covered disputes of sexual assault or sexual harassment. The “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” amends the Federal Arbitration Act (FAA), by narrowing its scope and applicability. The bill’s passage had bipartisan support in both the House and the Senate.

Historically, some employers have implemented arbitration programs that require both the employer and its employees to arbitrate most or all types of employment claims, including claims alleging sexual harassment or sexual assault. Largely in response to the #MeToo movement, which began in late 2017, some states passed laws designed to prohibit or restrict employers from requiring employees to arbitrate sexual harassment or sexual assault claims. For example, in New York, employers are prohibited from requiring the arbitration of sexual harassment claims except where inconsistent with federal law. New York’s prohibition on mandatory arbitration in relation to sexual harassment claims went into effect on July 11, 2018, and it has applied to contracts entered into on or after that date. New Jersey and California have enacted similar laws. New Jersey’s law prohibits any provision of an arbitration agreement that waives a substantive or procedural right or remedy relating to employment discrimination, harassment, and retaliation claims. This law applies to all contracts and agreements entered into, renewed, modified, or amended on or after March 18, 2019. Further, on October 10, 2019, California enacted a law, which prohibits employers from requiring employees to sign new mandatory arbitration agreements concerning disputes arising under the California Fair Employment and Housing Act (FEHA) or California Labor Code.  California’s law applies only to agreements dated January 1, 2020 or after. However, courts have found these statutes to be pre-empted by the FAA.

On February 7, 2022, the U.S. House of Representatives overwhelmingly passed H.R. 4445, 335 to 97. Shortly thereafter, on February 10, 2022, the bill passed the Senate in an unrecorded voice vote.Continue Reading Landmark #MeToo Legislation Allows Employees To Pursue Sexual Harassment & Assault Claims In Court, Rather Than Arbitration

Special thanks to Guest Contributor Harry Valetk.

In early May, private sector employers in New York will face new disclosure requirements for electronic monitoring of employees.  Beginning May 7, 2022, New York will join Connecticut and Delaware among the states that now require employers to provide written notice to new hires who are subject to electronic monitoring.  These new disclosure requirements come after Governor Kathy Hochul signed into law amendments to Civil Rights Chapter 6, Article 5, Section 52-C*2.

Here’s what New York employers need to know now about the new law:

Who is covered under the law? All private employers with a place of business in New York regardless of size. “Employer” is defined as any individual, corporation, partnership, firm, or association with a place of business in the state (not including the state or any political subdivision of the state).

What does the law require?  In practice, the law requires employers to (1) provide employees with a notice of electronic monitoring, (2) obtain proof of acknowledgement, and (3) prominently post the notice for all to see.Continue Reading New York’s New Electronic Monitoring Disclosure Law Requires Action Before May

On December 15, New York City released guidance on the new private sector COVID-19 vaccine mandate set to take effect on December 27. The new order is the strictest in that nation and comes amid omicron’s emergence, delta’s severity and the holiday season. Below, we provide answers to the key questions NYC employers may have to ensure compliance with the mandate.

Which NYC employers are covered by the mandate?

The mandate applies to any non-governmental entity that employs more than one person in NYC or maintains or operates a workplace in NYC (a Covered Entity), regardless of its industry. “Workplace” is defined as any place where work is performed in the presence of another worker or a member of the public, including vehicles. Self-employed individuals and sole proprietors are not covered by the mandate unless they work at a NYC workplace or interact in person with other workers or members of the public as part of their job duties.

What workers are covered?

Employers must collect proof of vaccination from all full- or part-time employees, interns, volunteers, or contractors. The mandate includes exemptions for those who:

  1.  Work remotely full-time
  2. Only enter the workplace for a quick and limited purpose,
  3. Are performing artists or athletes who are not required to be vaccinated per the Key to NYC program, or
  4. Are granted a reasonable accommodation based on their religion or medical condition.

Purposes characterized as “quick and limited” include using the bathroom, making a delivery, or receiving an assignment before leaving to begin a solitary assignment.Continue Reading NYC Mandates the Jab for Private Employers | What Employers Need to Know About the Detailed Guidance Unveiled December 15

This year New York employers have had to scramble to keep up with many new employment laws, and next year promises more of the same. The latest: New York City Mayor Bill de Blasio’s December 6 mandate that private sector employers require COVID-19 vaccines for their workers in NYC. If it survives expected legal challenges and takes effect December 27 (Happy Holidays!), the rule will be the broadest mandate of any state or large city in the US. From minimum wage increases, to regulations on the use of artificial intelligence tools in employee recruitment, to notice requirements for electronic employee monitoring, to New York’s fulsome response to COVID-19 through the HERO Act—private sector employers in New York have a laundry list of changes to implement and prepare for.

Below we highlight the 10 major employment law changes and updates that businesses need to know.

  1. New York City Vaccine Mandate To Hit All Private Employers December 27

By the end of the month, all in-person private sector New York City employees must have at least one dose of a COVID-19 vaccine, according to an announcement by Mayor de Blasio. The mandate, which will take the form of an order issued by the NYC Department of Health and Mental Hygiene, will apply to nearly 184,000 businesses and will not be limited to businesses in certain industries or based on company size. The mandate will most likely parallel the city worker mandate in that employers will, in certain instances, be permitted to make reasonable accommodations to mandatory vaccination policies for employees with legitimate religious or medical reasons, but will not permit any testing options in lieu of the vaccine. The mandate will not apply to fully remote employees or those who are alone at a worksite. The city has not yet announced whether employers will face inspections or fines if they fail to follow the mandate, but it intends to release implementation and enforcement guidelines by December 15, 2021.

The new mandate is the first of its kind on a local level while the federal vaccine rule for private employers with 100 or more employees remains on pause amid several legal challenges. The city mandate is also set to go into effect only days before the New York City mayoral transition, leaving future enforcement of the mandate uncertain.

 Employer Takeaways

  • Stay abreast of further city announcements concerning additional guidance on the vaccine mandate.
  • Operate under the assumption that the vaccine mandate will take effect December 27, 2021, and notify employees of the new mandate so unvaccinated employees have sufficient time to get vaccinated.
  • Implement procedures to verify applicable in-person employees vaccination status and prepare to collect vaccination records as confidential medical information.
  • Prepare to establish a mandatory vaccination policy and a process for employees to request exemptions, to the extent your business has not already done so.
  • Begin considering operational contingency plans if your business expects that a significant portion of the workforce will not get vaccinated.

Continue Reading Top 10 New York Employment Law Updates For 2021/2022