August 21, 2024

The FTC’s Noncompete Ban Is Dead—For Now

Steven Eheart

By Steven Eheart and Mark Wiletsky

Employers finally have the answer they’ve been waiting for: they don’t need to comply with the Federal Trade Commission’s (“FTC”) Rule banning noncompete agreements—for now.

The FTC’s Rule was set to go into effect on September 4, 2024. But, on August 20, 2024, a federal judge from the Northern District of Texas set aside the Rule and barred the FTC from enforcing it. The same judge previously put the Rule on hold as to only the parties who brought the lawsuit, but this new decision applies to all employers.

Mark Wiletsky

Mark Wiletsky

The Court rejected the Rule for two reasons: 1) the Rule exceeded the FTC’s statutory authority, and 2) the Rule is arbitrary and capricious.

The Court found that the plain language of the Federal Trade Commission Act (FTCA) does not expressly give the FTC authority to create substantive rules regarding unfair methods of competition. Additionally, the Court found that even if the FTCA empowers the FTC to create some rules, it only empowers rulemaking related to unfair or deceptive acts or practices—and noncompete agreements are not unfair or deceptive practices. In the end, the Court stated that the “role of an administrative agency is to do as told by Congress, not to do what the agency thinks it should do.” Read more >>

August 20, 2024

Responding to Employee Requests for Personnel Records

Dana Dobbins

By Dana Dobbins

Question: What are the guidelines for when employees, current or former, request a copy of their personnel file, and what files are required to be provided upon request?

Answer: When it comes to an employee’s or former employee’s request for their own personnel files, employers must be cognizant of applicable state and local law when responding to such requests. Some states, including Idaho, Montana, New Mexico, Utah, and Wyoming do not have any state or regulatory provisions that apply to private-sector employment (though there may be specific regulations related to public-sector employers). Employers should be mindful of any company policies or procedures governing access to personnel files, which should comply with any applicable laws,  and must apply those policies and procedures consistently.

Other states have specific rules governing current and former employee access to the employee’s personnel file. For example, under Colorado law, an employer must allow a current employee to inspect and obtain a copy of his or her personnel file at least annually, upon the employee’s request. However, the employer can require that the review occur at the employer’s office at a time that is convenient for both the current employee and the employer. Read more >>

August 16, 2024

Tenth Circuit Court of Appeals Upholds Workplace Policies Against Secret Recordings

Karina Sargsian

by Karina Sargsian

In recent years, the issue of secret recordings by employees has sparked considerable controversy. You may recall the recent incident involving an employee at CloudFlare, who filmed herself for nine minutes while questioning HR about her termination from the IT company. She posted the video on TikTok, where it quickly went viral. If you have not seen the video, you can view it here.

Such incidents have left many employers wondering how they can protect themselves from covert recordings by employees.

Employees often resort to secretly recording conversations following workplace disputes. And while it may be nearly impossible to prevent employees from secretly recording work-related conversations, employers can implement a no-recording policy that includes termination for violating such policy. One concern for employers, however, is that an employee fired for violating the no-recording policy might claim that the termination was in retaliation for previous complaints, rather than for the policy violation itself. Read more >>

August 7, 2024

A Path Towards Legal Permanent Residency: Applications Open on August 19, 2024 for New DHS Family Unity Program

By Sarah Bileti, Ann Lee, and Chris Thomas

The U.S. Department of Homeland Security (DHS) and the White House recently unveiled a new initiative that promises to transform the lives of undocumented noncitizen spouses of U.S. citizens. Scheduled to start taking applications on August 19, 2024, this groundbreaking program will provide a legal pathway to permanent residence (e.g., Green Card) for eligible individuals residing in the U.S. for over a decade without formal admission or parole.  Initial reports estimate that approximately 500,000 noncitizen spouses of U.S. citizens and 50,000 noncitizen children of these spouses could benefit, marking this initiative as a major step forward in the U.S.’ commitment to family unity and fairness in its immigration policies. Read more >>

July 31, 2024

Second Decision on FTC’s Noncompete Ban Is In

Annie Stuller

Annie Stuller

By Annie Stuller

On July 23, 2024, a federal judge from the Eastern District of Pennsylvania declined to issue a preliminary injunction that would block the Federal Trade Commission’s (“FTC”) rule banning most noncompete agreements, current and future, that is set to take effect on September 4 (“Rule”).

In reaching this decision, the judge concluded that the plaintiff failed to demonstrate a substantial likelihood of success on the merits. First, the judge rejected the plaintiff’s argument that Section 6(g) of the Federal Trade Commission Act (“FTC Act” or “Act”) only authorizes procedural rulemaking, explaining it “is inherently inconsistent and therefore untenable” to read the word “procedural” but not “substantive” into the FTC Act when neither word appears within the Act. She explained, “it [is] clear that the FTC is empowered to make both procedural and substantive rules as is necessary to prevent unfair methods of competition.” Second, unpersuaded by the plaintiff’s supporting reasons, the judge rejected the plaintiff’s alternative argument that—even if the FTC Act empowers the FTC with authority to make substantive rules—the FTC exceeded its authority by banning all noncompete agreements. Read more >>

July 10, 2024

FTC’s Noncompete Ban On Hold…For Parties Involved in Lawsuit

Mark Wiletsky

Mark Wiletsky

By Mark Wiletsky and Annie Stuller

On July 3, 2024, a federal judge from the Northern District of Texas barred the Federal Trade Commission (“FTC”) from enforcing its Rule banning noncompete agreements and paused the Rule’s effective date of September 4, 2024. However, the judge limited the scope of her preliminary order to the plaintiff (Ryan LLC) and plaintiff-intervenors (the U.S. Chamber of Commerce and other business associations), declining to pause the Rule nationwide. As a result, for all other employers, this Rule is still set to take effect on September 4, absent further action by this court or another court in which a challenge to the Rule is pending.

Annie Stuller

Annie Stuller

The challenged Rule broadly bars employers from entering noncompete agreements with employees, invalidates existing agreements except for highly compensated individuals in a policymaking position, and requires employers to provide notice to current and former employees bound by existing agreements that the agreement will not be enforceable once the Rule takes effect.

In siding with the plaintiff and plaintiff-intervenors, the judge reasoned that the FTC lacked statutory authority under Section 6(g) of the Federal Trade Commission Act (“FTC Act”) because it is a “housekeeping statute” that only authorizes procedural—not substantive—rulemaking. She reached this conclusion by looking to “the text, structure, and history of the FTC Act.” The judge further concluded that the Rule violates the Administrative Procedure Act’s prohibition against arbitrary and capricious rules “because it is unreasonably overbroad without a reasonable explanation.” Employers should keep in mind that these conclusions were based on a “substantial likelihood” of success on the merits, signaling the judge will likely (but not certainly) rule in favor of the plaintiff and plaintiff-intervenors. Read more >>

minimum wage

July 1, 2024

Nevada’s New Minimum Wage Starts Today

by JT Washington

Nevada employers may be happy to learn that as a result of a November 8, 2022, ballot measure passing, Nevada’s two-tier minimum wage will be no more. The two-tier minimum wage system reduced the required minimum wage if an employer offered qualifying health benefits. This change means that all employees will be entitled to the same minimum hourly wage regardless of whether they receive qualifying health benefits. Starting July 1, 2024, the minimum wage will increase to $12 per hour for all Nevada workers who are not exempt from minimum wage requirements, regardless of whether the employer offered qualifying health benefits. See 2024 Minimum Wage Bulletin. Read more >>

June 28, 2024

IRS Issues Final Prevailing Wage and Apprenticeship Regulations

By Adam Cohen, Colin J.A. Oldberg, and Melissa Braun

On June 25, 2024, the Internal Revenue Service and U.S. Department of Treasury published final Treasury Regulations (“Final Regulations”) in the Federal Register on the prevailing wage and registered apprenticeship requirements (“PW&A Requirements”) under Sections 30C, 45, 45L, 45Q, 45U, 45V, 45Y, 45Z, 48C, and 179D of the Internal Revenue Code of 1986 (the “Code”). The PW&A Requirements provide rules for taxpayers intending to claim increased amounts of Federal income tax credits or an increased deduction as well as certain recordkeeping and reporting requirements and are comprised of prevailing wage requirements (“Prevailing Wage Requirements”) and apprenticeship requirements (“Apprenticeship Requirements”).

Adam Cohen

Colin J.A. Oldberg

Melissa Braun

Read more >>

June 26, 2024

The Significance of Pay Transparency: A Persistent Legislative Trend and Its Relevance for Employers

By Janae Ruppert

Janae Ruppert

Janae Ruppert

The 2023 and 2024 legislative landscape witnessed a surge in states and cities implementing diverse pay transparency requirements.  Despite the progress in recent years in reducing the wage gap, gender pay disparities persist, with current studies indicating that women, particularly women of color, earn only 84 cents for every dollar earned by men.  Pay transparency laws aim to rectify these disparities by providing salary and other benefit information to applicants during the hiring process. This additional information is intended to equip applicants with the tools to negotiate compensation, which theoretically may reduce the gender wage gap. In response to this trend and the intent to further address the gender wage gap, several states have introduced varying levels of pay transparency regulations. Read more >>

June 24, 2024

Restrictions On Intermittent FMLA Leave

By Janae Ruppert

Question: If an employee takes FMLA leave to bond with his new child, would he be able to take additional bonding time later the same year if he still had FMLA time available?

Janae Ruppert

Janae Ruppert

Answer: The Family Medical and Leave Act (FMLA) has some restrictions on when an employee can take leave for birth or bonding with a new child. First, leave to bond with a newborn child or for a newly placed adopted or foster child must conclude within 12 months after the birth or placement. Generally, both mothers and fathers have the same right to take FMLA leave to bond with a newborn child. However, intermittent FMLA leave to bond with the child throughout the 12-month period is subject to employer approval. “Intermittent leave” is leave taken in separate blocks of time due to a single qualifying reason. Read more >>