January 17, 2023

The Latest on the Wyoming Legislature’s Employment Proposals

Janae Ruppert

The Wyoming Legislature began the 2023 General Session on January 10, 2023. At this early stage of the session, only two employment related bills have been introduced.

Prohibiting Mask, Vaccine and Testing Discrimination. House Bill 66, entitled “Prohibiting mask, vaccine and testing discrimination” seeks to prohibit discrimination based upon a person’s vaccination status, medical testing status, or use of a facial covering (i.e. mask). This bill is not limited to defining new categories of discrimination in the workplace but would prohibit imposing masking, testing or vaccination requirements as a condition for accessing publicly available goods and services. Notably, the bill is not limited to COVID-19, but extends to testing, masking or vaccination for any communicable disease. The bill would also repeal the immunization requirements for children and childcare and school employees. Read more >>

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 >>

December 5, 2022

Can An Employee Be Required to Sign a Noncompete Agreement Before They Receive Their Final Paycheck?

Juan Obregon

By Juan Obregon

Question: Can we require an employee to sign a noncompete agreement before they receive their final paycheck?

Answer: In short: no, employers cannot withhold an employee’s final paycheck until they sign a non-compete. Doing so likely violates Colorado’s restrictive covenant statute (Colo. Rev. Stat. 8-2-113) and the Colorado Wage Claim Act (Colo. Rev. Stat. 8-4-101, et seq).

Under Section 8-4-109 of the Colorado Wage Claim Act, when the employer terminates an employee, “wages or compensation for labor or service earned, vested, determinable, and unpaid at the time of such discharge is due and payable immediately.” When an employee quits “the wages or compensation shall become due and payable upon the next regular payday.” Either way, if the employee performed the labor to earn those wages, they are due and failing to pay it timely could subject the employer to significant penalties. Read more >>

December 1, 2022

New Guidance on Bonuses and Commissions May Cause Headaches for Employers

Juan Obregon

By Juan Obregon

Organizations commonly require employees to be employed on the date a commission or bonus is paid to receive the commission or bonus. The Colorado Department of Labor and Employment (CDLE), which interprets and administers Colorado’s Wage Act, recently indicated that practice is not permissible, which means employers will need to revisit their bonus agreements and commission plans sooner rather than later. The failure to heed the CDLE’s guidance may result in costly wage claims.

Overview

The Colorado Wage Act requires employers to pay employees the wages and other compensation they earn. Non-discretionary bonuses and commissions are considered wages. Under the Colorado Wage Act, an employee is not entitled to wages or compensation unless such amounts are “earned, vested, and determinable.” The question, of course, is: when are bonuses or commissions earned, vested, and determinable? Read more >>

July 22, 2022

Very Bad Year for Wyoming Noncompetes (And What You Can Do To Improve Yours)

by Brad Cave

Brad Cave

The Wyoming Supreme Court decided four cases in the last 12 months against the enforcement of employees’ agreements not to compete with their former employer. Although each case was unique, the tenor and direction of these decisions are bad news for Wyoming employers who rely on noncompete agreements. In addition, one of the rulings requires Wyoming employers to immediately review the reasonableness of the geographic scope and time covered by their noncompete agreements and perhaps modify those terms, or they risk being unable to enforce the agreement at all. You should act now to improve your odds of enforcing the agreements against disloyal former employees. Here’s our take on the steps you should take.

Confirm your noncompetes are supported by consideration

Contracts must be based on consideration—something of value—exchanged between the parties. All employees have employment contracts with their employers, which are supported by consideration of the job itself with its promise of payment of wages. When noncompete agreements are signed at the time of hiring, the job is the consideration. When an employer asks employees to sign a noncompete after employment begins, they must give new consideration beyond just keeping the job. Consideration can consist of anything of value that is specifically offered and accepted in exchange for the noncompete, but without new consideration, the post-hire noncompete is not enforceable. Read more >>

May 2, 2022

CDLE Issues New Guidance on Vacation, PTO, and Payroll Deductions

By Mark Wiletsky

Mark Wiletsky

The Colorado Department of Labor and Employment (CDLE) recently provided guidance for Colorado employers on two important issues: payment of vacation and paid time off (PTO) to employees upon separation from employment, and deductions from pay. While these documents are not binding, they represent the CDLEs interpretation of Colorado law and therefore provide helpful guidance to employers.

Vacation, PTO, Floating Holidays, and More. In Nieto v. Clark’s Market, Inc., 2021 CO 48, the Colorado Supreme Court held that employers must pay employees all accrued but unused vacation pay upon separation from employment. Unfortunately, that decision left open some questions for employers, which CDLE addresses in INFO #14, including:

What counts as vacation pay? Basically, any leave that can be used at the employee’s discretion, such as paid time off (PTO), annual leave, personal days, floating holidays, etc. The CDLE explains that “vacation pay” includes any paid leave for which there is no qualifying event. Leave that is based on a qualifying event, such as health needs, a designated public holiday, caretaking, or bereavement, is not considered vacation pay.
Does that mean PTO, annual days, etc. must be paid upon separation from employment? Yes, according to the CDLE. If the paid leave can be used without a qualifying event, then any accrued but unused paid time off must be paid upon separation from employment.
What about a “floating holiday” that can be used for any holiday the employee celebrates? That is not vacation pay, according to the CDLE, because it is tied to a specific qualifying event, e., a holiday the employee celebrates. However a “floating holiday” that can be used completely at the employee’s discretion is vacation pay.
If we do not have a written policy, do we still have to pay accrued but unused vacation upon separation? Yes, if you have a practice of providing vacation or paid time off, it does not matter whether the policy is written.
What about “unlimited vacation” – do we need to pay anything upon separation? No, but the CDLE notes that if the company caps the time off or otherwise does not allow for “unlimited” vacation, then you likely would have to pay any unused vacation upon separation.
Are use-it-or-lose-it policies permissible? No, according to the CDLE. Once employees earn vacation pay (regardless of the name used for such pay), they cannot forfeit such pay. Capping the amount of earned vacation or PTO that rolls over from year to year would amount to a forfeiture. The Colorado Supreme Court did not address this question in Nieto, but the CDLE’s guidance appears to be consistent with the reasoning in Nieto.
Can we cap the amount of vacation pay employees earn? Employers may set a maximum cap at which accrual stops, until such time as the employee falls below that cap.

January 14, 2022

U.S. Supreme Court Blocks OSHA’s Vaccine-or-Test Rule; Upholds CMS’s Healthcare Vaccine Mandate

By Mickell Jimenez and Curtis Greenwood

The U.S. Supreme Court, in a 6-3 decision, has blocked the Department of Occupational Safety and Health Administration (OSHA) Emergency Temporary Standard (ETS) requiring private employers with 100 employees or more to vaccinate-or-test for COVID-19 from taking effect. However, in a separate decision, the Court allowed a more limited Centers for Medicare and Medicaid Services (CMS) Interim Final Rule, requiring COVID-19 vaccination of staff working at health care facilities that receive Medicare and Medicaid money from the federal government.

The Court’s decision on OSHA’s ETS does not prohibit employers across the country from implementing their own vaccinate-or-test policies. But absent an obligation to do so, it remains unclear whether employers will choose to implement such a policy given the already challenging staffing issues and the need to comply with the myriad confusing and sometimes contradictory patchwork of laws and regulations enacted by state and local governments. Employers that implement a vaccinate-or-test policy, or other type of policy to address the impact of COVID-19 in the workplace, should ensure that the policy complies with applicable law. Particular attention should be paid to the requirement to accommodate, where appropriate, employees’ sincerely held religious beliefs and/or medical conditions. Read more >>

November 15, 2021

Utah’s New Law on Employer Vaccination Policies: What Employers Need to Know

By Bryan Benard and Kody Condos

Bryan Benard

On November 16, 2021, Governor Spencer Cox signed into law SB2004 “Workplace COVID-19 Amendments,” a bill passed during a special session of the Utah Legislature. While the bill was introduced in response to vaccine mandates contained in the Executive Orders of President Biden and the special rule or ETS from the Occupational Health and Safety Administration (“OSHA”) (which has now been stayed by the federal courts), this new law nonetheless carries significant legal requirements for Utah employers. The bill became immediately effective yesterday upon the Governor’s signature without giving employers any lead time to prepare or change policies/processes. This law does not apply to any “person” that is regulated by the Centers for Medicare or Medicaid Services related to COVID-19 (unless a state entity) or that is a federal contractor.

Kody Condos

At a high level, the bill:

(1) requires that any employer vaccination mandate include exemptions for a) health reasons; b) sincerely held religious beliefs; and c) “sincerely held personal beliefs”;

(2) prohibits employers from taking any adverse action against an employee or potential employee who is not vaccinated or asks for an exemption;

(3) requires employers to pay for any COVID testing requirements; and

(4) prohibits employers from retaining a copy of any vaccination documents but allows employers to keep a record of whether an employee is vaccinated. Read more >>

November 10, 2021

The Disappearing Future of Non-Compete Agreements

By Jeremy Ben Merkelson, Tyson Horrocks, S. Jordan Walsh, Shaun Kennedy, and Brit (Brittany) Merrill

ERE Recruiting Intelligence

Republished with permission ERE Media, Inc. Originally appeared in the November 10, 2021 online edition of ERE.net

For the last two decades, with the principal exception of California and a handful of other jurisdictions, non-competition covenants have been a standard component of the defense architecture for U.S. companies to protect valuable confidential information and trade secrets from falling into the hands of a competitor. Over time, though, this tool has been dramatically curtailed.

Hostility to non-competition agreements is growing. In July, President Biden deputized the Federal Trade Commission (FTC) to explore nationwide restrictions on their use. Additionally, in the last five years, state-law restrictions on entering into non-competition agreements with low-wage earners have been adopted in Illinois, Maine, Maryland, New Hampshire, New York, Rhode Island, Virginia, and Washington (and the District of Columbia will see new restrictions take effect in April 2022). Read more >>