Author Archives: Jordan Walsh

January 10, 2023

End of Year Federal Employment Law Update: 2022

Jordan Walsh

By Jordan Walsh

In 2022, there were some impactful, but relatively quiet developments in federal employment law. These developments affect confidentiality, non-disparagement, and arbitration agreements, and create protections for pregnant and nursing employees. Employers are encouraged to consult with legal counsel regarding these changes to ensure their compliance with these changes.

1.  No Mandatory Arbitration of Sexual Assault or Sexual Harassment Claims:

On March 3, 2022, President Biden signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, (2021-2022) (the “Act”), into law. The Act amends the Federal Arbitration Act by rendering all pre-dispute arbitration agreements and pre-dispute joint action waivers entered into on or after March 3, 2022 invalid and unenforceable in the context of sexual assault disputes[1] and sexual harassment disputes[2]. H.B. 4445 § 402(a). Instead, the Act leaves it up-to the claimant to elect to arbitrate such claims; the claimant may not be compelled to arbitrate sexual assault and/or sexual harassment claims. Id.

The Act applies to all claims of sexual assault and harassment, regardless of whether the matter is brought under state, federal, or local law. Additionally, the Act expressly provides that regardless of whether an arbitration agreement authorizes an arbitrator to make a determination of arbitrability concerning claims arising under the agreement, a court, not an arbitrator, has the authority to determine the enforceability of an agreement in the context of the Act. Id. at § 402(b).  Read more >>

January 6, 2023

FTC Proposes A New Regulation That Kicks Non-Competes to the Curb

By Jeremy Merkelson and Jordan Walsh

Jordan Walsh

On January 5, 2023, the FTC issued a Notice of Proposed Rulemaking (“proposed Rule”) that would ban most non-competition agreements in the United States and put to the wastebin the 50-state patchwork of laws that currently govern the enforceability of such covenants across the country.

The proposed Rule bars post-employment non-competes with “workers” (defined to include not only employees but also independent contractors and others). This fact sheet published on the FTC’s website provides policy-related information about the FTC’s reasoning for the ban.

The proposed Rule sweeps within its ambit not only non-competition covenants that bar workers from new employment but also “de facto” agreements that the FTC considers to be unfair, including non-disclosure, non-solicitation and other covenants that have “the effect of prohibiting the worker from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer.”

As drafted, the proposed Rule contains no exclusions for management, protection of trade secrets or other exemptions that state laws currently provide. The sale of business exception that typically allows sellers of a business to be subject to non-competition covenants in favor of the acquiror is preserved to some extent by the proposed Rule, but only if the seller holds a “substantial” interest in the company being sold, which is pegged at 25% or greater of the company’s equity—a high threshold that could effectively do away with many sale-of-business non-competes currently in place. If the proposed Rule is adopted, companies would be required to provide notice to both current and former employees to notify them that their non-competes are no longer in effect and may not be enforced against them. Read more >>