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Special thanks to presenter Melissa Allchin.

The possibility of putting COVID-19 in our collective rearview mirrors grows every day. But before we declare the pandemic over, our Labor & Employment and Immigration lawyers discuss the key items employers should keep in mind as we head towards the pandemic’s exit, including:

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The U.S. Supreme Court just handed employers a huge win in the continuing war over California’s Private Attorneys General Act (PAGA), a bounty-hunter statute that deputizes employees to sue on behalf of the state. In yesterday’s Viking River Cruises, Inc. v. Moriana, decision, the Supreme Court held that employers may compel employees to arbitrate

We are pleased to share a recent Life Annuity Specialist article, “Why Insurers May Worry About New York’s Salary Transparency Law,” with quotes from Robin Samuel. This article discusses the likely impact of New York City’s new salary transparency law on insurers, other employers and job postings in New York City.

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The Supreme Court of California has just resolved a long-standing debate over whether employees may recover additional statutory penalties if employers do not include unpaid premium payments for meal period and rest break violations (commonly referred to as “break penalties”) on employee paystubs, or include such premium payments with an employee’s final wages due immediately

On March 24, 2022, Governor Jay Inslee signed into law Engrossed Substitute House Bill 1795, also known as the Silenced No More Act, which expands worker protection in Washington State. More specifically, it prohibits employers from requiring or requesting that workers sign agreements containing nondisclosure or non-disparagement provisions restricting their right to discuss factual information regarding illegal discrimination, harassment, sexual assault, retaliation, wage and hour violations, or any other conduct “that is recognized as against a clear mandate of public policy.”  Washington State’s Silenced No More Act will go into effect on June 9, 2022.

While other states such as California, New York, and Illinois have enacted similar NDA-narrowing laws covering different forms of employment discrimination, Washington’s new law is arguably the most restrictive. For instance, New York, California, and Illinois prohibit nondisclosure provisions related to unlawful discrimination in settlement agreements unless an employee wants such confidentiality. Washington State, however, takes it a step further by barring confidentiality clauses even if requested by the employee (as defined by the Act). As another example, New York law still permits nondisclosure clauses in pre-employment and severance agreements, but Washington’s law applies broadly to any agreement between the employer and “employee” as defined in the Act, including independent contractors not typically protected by EEO laws.

While Washington is the most recent state to pass a law on this subject, it may not be the last. The movement to prohibit secrecy covenants is gaining traction as workers’ advocates push for legislation at both the state and federal level banning the use of such covenants.

Prohibited Agreements

The newly-added section to Chapter 49.44 of the Revised Code of Washington provides that “a provision in an agreement between an employer and employee not to disclose or discuss conduct, or the existence of a settlement involving conduct, that the employee reasonably believed to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, sexual assault, or against a clear mandate of public policy is void and unenforceable.” The Act broadly defines “employee” to include current, former, and prospective employees, as well as independent contractors; and encompasses all work-related conduct, whether occurring in the workplace or off-site.

Continue Reading Washington State Takes Aim At Workplace NDAs Under Its Silenced No More Act

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

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.

As the COVID-19 Omicron wave recedes and the desire to get back to a pre-pandemic “normal” is stronger than ever, scores of states have either lifted mask mandates or have set a date for lifting them. But what should employers take into account before allowing employees to toss masks aside?

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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