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Across the world, trade secrets are becoming increasingly important. As companies align workforce transformation, manage supply chain operations and balance the needs of their digital transformation journey, new strategies are required for the identification, protection and enforcement of their most valuable, complex and market-differentiating trade secrets.

In this series of bite-sized videos, hear from Baker McKenzie’s global trade secrets team across disputes, intellectual property, data & technology and employment & compensation on best practices for a strategic, multidisciplinary approach to manage your trade secrets, disputes and risks.

How Baker McKenzie Manages Trade Secrets Globally

Brad Newman (Partner, Palo Alto), Christine Streatfeild (Partner, Washington, DC), Celeste Ang (Partner, Singapore) and Jason Raeburn (Partner, London) talk about our Global Trade Secrets Group and uncover regional trends through this video.

Click here to watch the video.

Remote Working:
The New Normal and the Impact on Your Trade Secrets

Today’s remote working environment can lead to unexpected complications when employers seek to prevent the disclosure of trade secrets or enforce restrictive covenants. Stephen Ratcliffe (Partner, London) outlines some of the key trade secrets issues that arise in remote working scenarios and provides practical tips for avoiding common pitfalls.

Click here to watch the video.

Mexico’s New Trade Secrets Laws

In this episode, Marina Hurtado-Cruz (Partner, Mexico City) explores key changes to Mexico’s new trade secrets law under new legislation, including an expanded scope of protection for eligible subject matter and enhanced enforcement mechanisms.

Click here to watch the video.

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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 termination of employment. Finding that break premium payments are “wages,” and not penalties, the Supreme Court has ruled that employees may recover additional Labor Code penalties for the late payment of final wages or paystub violations if break premiums are not included on paystubs or in an employee’s final wages. These “penalties on penalties” can make noncompliance extremely costly for employers.

In Naranjo v. Spectrum Security Services, a putative class of security guards alleged meal break violations for on-duty, compensated meal periods under California Labor Code section 226.7, seeking to recover premium payments for allegedly deficient meal breaks, penalties for the late payment of the allegedly owed premium payments on termination of employment (pursuant to Labor Code Section 203), penalties for allegedly inaccurate wage statements that omitted the premium payments allegedly owed (pursuant to Labor Code section 226), and attorney’s fees.

The Court of Appeal held that unpaid premium wages for meal break violations do not entitle employees to additional waiting time penalties or penalties for inaccurate pay stubs (i.e., penalties on penalties) if their pay and pay statements during the course of the violations included the wages earned for on-duty meal breaks, but not the unpaid premium wages.

The issues on appeal to the Supreme Court of California:

  • Does a violation of Labor Code section 226.7–requiring payment of premium wages for rest and meal period violations–give rise to waiting time or inaccurate pay stub penalties when the employer does not include the premium wages in the employee’s wage statements but does include the wages earned for meal breaks themselves? The Court of Appeal answered this question “no,” but the California Supreme Court reversed and held that employees may recover Section 226.7 penalties if premium wage payments are not listed on paystubs.
  • Must premium payments for missed breaks be paid within the time limits for final wages proscribed by Labor Code section 203? The Supreme Court answered “yes,” opening the door for penalty claims on the late payment of premium payments on termination.
  • What is the applicable prejudgment interest rate for unpaid premium wages owed under Labor Code section 226.7? The Court of Appeal said seven percent, and the California Supreme Court agreed.

What does this mean for employers?

Employers should immediately:

  • Check that premium payments for missed breaks are being included on employee paystubs for the pay periods in which the premiums are owed;
  • Ensure the final wages for any terminating employee includes any premium payments “earned” by the employee before the termination date; and
  • Ensure that premium payments are being calculated and paid at the employee’s “regular rate of pay,” instead of their base hourly rate. (See our prior blog, here).

With the Supreme Court’s ruling in Naranjo, meal and rest break premiums are now “wages,” and an employer’s failure to pay premiums can bring about costly wage statement and waiting time penalty claims. Employers who have been diligent about paying meal and rest break premiums now must also be even more careful to avoid having to pay additional penalties to employees.

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Pay transparency laws (laws requiring employers to disclose compensation ranges to applicants) are spreading like wildfire across the US. Regulators are hoping such laws eliminate pay differentials based on gender or race. Putting good intentions aside, the laws are a source of huge consternation for businesses as the state and local requirements vary greatly in terms of what must be disclosed to whom and at what point in the hiring process.

In this Quick Chat video, our Labor & Employment lawyers discuss key developments in New York City, California, Colorado, Washington and several other jurisdictions. Liz, Paul and Di are all in the weeds helping multistate and multinational businesses develop consistent and compliant compensation plans and recruitment policies, and they share their advice here.

Click here to watch the video.

 

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New York City employers can breathe a short sigh of relief. On May 12, 2022, New York City Mayor Eric Adams signed a bill into law amending New York City’s pay transparency law (Local Law 32 for 2022, which we previously blogged about here, here, here and here), postponing the law’s original May 15, 2022 effective date to November 1, 2022. The law will require NYC employers with four or more employees to disclose in job postings – including those for promotion or transfer opportunities – the minimum and maximum salary offered for any position located within New York City. Despite the delay of the effective date, employers should prepare so they can comply by November 1, 2022.

As we previously reported, the law (as amended):

  • Requires employers to provide the minimum and maximum salary for any position located within New York City. This range may extend from the lowest to the highest salary that the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity.
  • Covers all employers that have four or more employees (or one or more domestic workers). Owners and individual employers count towards the four employees. The four employees do not need to work in the same location, and they do not need to all work in New York City. As long as one of the employees works in New York City, the workplace is covered.
  • Does not apply to positions that cannot or will not be performed in New York City.
  • Applies to employees who are paid hourly or through an annual salary.
  • Limits lawsuits based on the law to lawsuits brought by individuals who are current employees bringing an action against their employer for advertising a job, promotion or transfer without posting a minimum and maximum hourly wage or annual salary.
  • Provides that there is no monetary penalty for the first violation of the law, and that employers will have 30 days to correct the violation.

The New York City Commission on Human Rights (NYCCHR) released a Fact Sheet in March providing details on employers’ obligations under the law. Employers should keep an eye out for an updated Fact Sheet addressing the amended law. In addition, the NYCCHR is authorized to promulgate rules to implement the new bill, so employers should also keep an eye out for the anticipated rules as well.

The uptick in pay transparency laws across the US

With the current focus on equal pay for equal work, New York City’s pay transparency law is just another in a nationwide trend imposing pay transparency requirements on employers, including wage range disclosure obligations. However, the laws vary regarding where, when, how and to whom required disclosures must be made. For instance:

  • California requires employers to provide job applicants with the salary or hourly wage ranges for positions upon the applicant’s reasonable request, provided the applicant has completed an initial interview with the employer. (Effective January 1, 2018)
  • Colorado requires employers disclose the pay, or pay range, of a position in the job posting itself, along with a description of incentive compensation and benefits. (Effective January 1, 2021)
  • Washington’s recent amendment to its Equal Pay and Opportunity Act (see our blog, here)–similar to Colorado–requires disclosure of wage, salary and benefit information in job postings. However, it leaves unchanged a prior requirement that employers provide the same information to employees offered new positions or promotions within the company only when requested. (Effective January 1, 2023)

Multistate employers should consult with Baker McKenzie employment attorneys for strategies to address the varying requirements across jurisdictions. And for New York City employers navigating New York City’s new pay transparency law, reach out to your Baker McKenzie employment attorney for assistance.

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Nondisparagement clauses have long been a staple in settlement agreements between employers and employees as a way to discourage disgruntled employees from debasing the company after they have departed. Nondisparagement clauses often require employees to refrain from saying anything negative about their former employer at all. But employers should keep a few things in mind to ensure that the use of a nondisparagement clause does not create additional risk for the company.

  1. Keep an Eye Out for Activity by the National Labor Relations Board (NLRB)

The NLRB has signaled it may revisit current Board precedent holding nondisparagement agreements in employee settlement agreements are legal-meaning employers should watch out for Board action or decisions reverting to restrictions on nondisparagement agreements. On August 12, 2021, in her first memo as NLRB General Counsel, Jennifer Abruzzo issued a Mandatory Submissions to Advice Memorandum, setting forth that NLRB Regional Directors, Officers-in-Charge, and Resident Officers must submit certain types of cases to the NLRB Division of Advice (“Advice”) (which, in addition to other duties, provides guidance to the NLRB’s Regional Offices regarding difficult and novel issues arising in the processing of unfair labor practice charges).

Abruzzo identified 11 areas of Board case law involving doctrinal shifts from previous Board precedent that the Board, through submissions to Advice, would be examining-including “cases finding that separation agreements that contain…nondisparagement clauses…lawful.”

Abruzzo highlighted cases involving the applicability of Baylor University Medical Center, 369 NLRB No. 43 (2020), overruling Clark Distribution Systems, 336 NLRB 747 (2001), and International Game Technology, 370 NLRB No. 50 (2020) to be submitted to Advice for review.

Before it was overruled, Clark Distribution Systems stated that a provision in the confidentiality clause of a severance agreement prohibiting the employee from voluntarily appearing as a witness, voluntarily providing documents or information, or otherwise assisting in the prosecution of any claims against the company unlawfully chilled the employees’ Section 7 rights under the National Labor Relations Act (NLRA)(which guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”)

The provisions at issue in the severance agreements in Baylor University Medical Center included a “No Participation in Claims” provision in which the departing employee agreed not to assist or participate in any claim brought by a third party against Baylor (unless compelled by law to do so), and a “Confidentiality” provision in which the employee agreed to keep confidential any of Baylor’s confidential information made known to the employee during their employment. The complainants alleged that by offering the severance agreements with these provisions, Baylor violated Section 8(a)(1) of the NLRA (which makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act). The Board disagreed, in part because the severance agreement only pertained to postemployment activities having no impact on terms and conditions of employment. The Board also found that Baylor’s mere offer of the separation agreement was not coercive or otherwise unlawful, and that there was no sign that the agreement was offered under circumstances that would tend to infringe on the separating employees’ exercise of their own or their co-workers’ Section 7 rights.

International Game Technology (IGT) applied Baylor to a separation agreement with a nondisparagement clause,  finding in that case that the severance agreement at issue was entirely voluntary, did not affect pay or benefits that were established as terms of employment, and was not offered coercively-and the nondisparagement provision did not tend to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights under the Act.

What to do?

What should employers do now given the NLRB review of cases applying Baylor and International Game Technology to ensure they don’t run afoul of the NLRA when using nondisparagement clauses in settlement agreements with employees? Employers should:

  • Keep an eye out for changes in the law stemming from the NLRB’s review of cases applying Baylor and International Game Technology.
  • Use precise language to make it clear that a nondisparagement clause only applies at the time of and after termination, to avoid claims that the terms of the clause interfere with an employee’s Section 7 rights under the NLRA.
  • Consult with counsel regarding the possibility of using a savings clause stating that the severance agreement, and specifically the nondisparagement clause, are not intended to prevent the employee from engaging in protected activity under the NLRA.

Continue Reading “If You Can’t Say Anything Nice…” Keep These Tips in Mind When Using Nondisparagement Clauses in Settlement Agreements with Employees

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 With special thanks to our colleagues in Canada, William Watson and Dave Bushuev.

In December 2021, the Ontario government passed Bill 27 – Working for Workers Act, 2021 requiring employers with 25 or more employees to create a “Disconnecting from Work Policy” by June 2, 2022. The Ontario government is following the lead of France, Spain and Portugal — all of which have adopted similar legislation in recent years.

In this In Focus video, our Canadian Labor and Employment lawyers share key considerations and important timelines for employers to know as they develop Disconnect policies for their workplaces.

Click here to watch the video.

 

 

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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 if New York City Mayor Eric Adams signs a bill amending the law. Now, the mayor has scheduled a hearing on the amendments for May 12, 2022, according to the New York City Council’s legislative site. Stay tuned for further developments on the Salary Disclosure Law, and contact your Baker McKenzie employment attorney for help with your employment needs.

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Many thanks to Marredia Crawford (Director, Inclusion & Diversity, Americas) for sharing this invitation. 

Please join us on Wednesday, June 8, 2022 as we host a virtual program to commemorate Juneteenth. We are delighted to welcome Dr. Fredera Hadley, a historian and Professor of Ethnomusicology at the Julliard School for this exciting program.

Dr. Hadley will lead us on an impactful journey, discussing the history of Juneteenth and the impact of African American culture on multiple genres of music. Participants will share in the music, culture and a specially curated musical playlist developed by Dr. Hadley for Juneteenth.

Juneteenth is the oldest nationally celebrated commemoration of the ending of slavery in the United States. Dating back to 1865, it was on June 19th that the Union soldiers landed at Galveston, Texas with news that the war had ended and the enslaved were now free.

Welcome and introduction by Colin Murray, Baker’s North America Chief Executive Officer.

Date:
Wednesday, June 8, 2022

Time:
1 pm – 2 pm ET
12 pm – 1 pm CT
10 am – 11 am PT

Click here to register now.

Speaker 

Fredara Mareva Hadley, Ph.D. is an ethnomusicology professor in the Music History Department at The Juilliard School where she teaches courses on ethnomusicology and African American Music. Dr. Hadley has presented her research at universities and conferences both domestic and abroad and has been published in academic journals and other publications. Her commentary is featured in several documentaries including the recently released PBS doc-series, The Black Church.

Dr. Hadley’s current book projects include her forthcoming book, that centers the musical ecosystems of Historically Black Colleges and Universities and their impact on Black and American music. Her other book project is an edited volume about Aretha Franklin for Cambridge University Press.

Moderator

Taryn Brown is an Associate in the Firm’s North America Corporate & Securities Practice Group in our Washington, DC office. Taryn has extensive experience in transactional, corporate governance, financial restructuring, and securities law matters. She advices and counsels clients on a wide variety of legal matters. Taryn focuses her practice on advising on mergers and acquisitions transactions, including leveraged buy-outs, dispositions, carve-outs and asset manager transactions.  She also advises public and private clients in a wide variety of corporate matters, including public and private offerings of debt and equity securities, securities law compliance and disclosure issues, financial restructurings, corporate governance matters and the negotiation of commercial contracts.

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With special thanks to our colleagues in Mexico: Javiera Medina-Reza, Liliana Hernandez-Salgado and Salvador Pasquel-Villegas.

In May, employers in Mexico will encounter new rules regarding compulsory company profit sharing entitlements for employees. This labor reform requires the immediate attention of companies doing business in Mexico.

In this video, Baker McKenzie’s Labor and Employment partners share important insights on the new regulations, including:

  • How to calculate profit sharing amounts
  • Understanding maximum allotments
  • Applicable payment timelines
  • Possible consequences for companies failing to comply

Click here to watch the video.

PTU 2022: A Deep Dive into Your Top Questions on Compulsory Company Profit Sharing Entitlements for Employees

With special thanks to our colleagues in Mexico: Liliana Hernandez-Salgado, Alfonso Garcia-Lozano and Daniel Urdiain-Dector.

As of May, employers in Mexico are subject to new rules governing compulsory company profit sharing entitlements for employees. This comes as a result of the labor reform of 2021.

In this video, Baker McKenzie’s Labor & Employment lawyers address some of the most common questions on this topic, including:

  • The impact of the new 3-month cap, company mergers and employer substitutions in 2021
  • Mitigating the impact of high PTU payments
  • Navigating payment calculations for employees with variable compensation and employees with less than 3 years of seniority

And more!

Click here to watch the video.

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New York City’s salary transparency law (Local Law 32 for 2022, the “Salary Disclosure Law,” which we previously blogged about here and here)–originally set to take effect on May 15, 2022–could now take effect November 1, 2022 if a new bill is signed into law by New York City Mayor Eric Adams. On April 28, 2022, the New York City Council voted to approve a bill amending the Salary Disclosure Law by:

  • Clarifying that the law applies to employees who are paid hourly or through an annual salary;
  • Emphasizing that the law does not apply to positions that cannot or will not be performed in New York City;
  • Limiting lawsuits based on the law to lawsuits brought by individuals who are current employees bringing an action against their employer for advertising a job, promotion or transfer without posting a minimum and maximum hourly wage or annual salary;
  • Stating there is no monetary penalty for the first violation of the law, and that employers will have 30 days to correct the violation; and
  • Changing the effective date of the law to November 1, 2022.

Businesses have rallied against the law on several fronts, including lobbying for a restriction on the companies subject to the law, for general “help wanted” notices that an employer is hiring without reference to any particular position to be excluded from the law’s requirements, and seeking full exemptions for companies with fewer than 15 employees. However, none of these were included in the version of the amendment passed on April 28. Stay tuned for any updates on the Salary Disclosure Law, and contact your Baker McKenzie employment attorney for all of your employment needs.