Employment Law This Week®: Top Issues of 2016 – DTSA, Non-Competes, Paid Sick Leave, Transgender Law, Overtime, NLRB DecisionsEpisode 53: Week of December 19, 2016 December 19, 2016
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For our final show of the year, we’re looking back at the biggest employment, workforce, and management issues in 2016, as featured in EBG’s Take 5 2016 Wrap Up:
This week's stories include . . .
(1) Impact of the Defend Trade Secrets Act
This year saw significant developments in the law governing trade secrets and non-competes. The Defend Trade Secrets Act (DTSA) opened federal courts to trade secrets claims, regardless of the dollar value. Jonathan Shapiro of Epstein Becker Green comments:
"Because the DTSA's remedies largely overlap with those already available at state law, it's not a radical expansion of available remedies. But the law is still of great significance to employers, both because the provision of jurisdiction in federal court and the forthcoming creation of a uniform body of federal law in this area."
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(2) States Called to Ban Non-Compete Agreements
The DTSA does include some unique provisions - whistleblower protections in some cases and an ex-parte seizure provision for some extreme circumstances. The political winds blew steadily against non-compete clauses in 2016. Pressure from the federal government culminated in a White House “call to action” encouraging states to ban non-compete agreements in some circumstances. Jonathan Shapiro continues:
"Consistent with the White House's call to action, Illinois passed the Illinois Freedom to Work Act, barring non-compete agreements for workers who earn the greater of the federal state or local minimum wage or $13/hour. Utah enacted a law limiting restrictive covenants entered into on or after May 1st, 2016, to one year post-termination, subject to certain limitations. Rhode Island and Connecticut both enacted laws this year restricting physician non-competes. And finally, Alabama codified a more middle of the road approach, allowing two year non-compete and 18 month non-solicitation clauses for employees, provided that they are limited to the geographic area where the company operates a similar business."
(3) Paid Sick Leave Laws Expand
Paid sick leave emerged as a major issue on the state and federal level this year. Sick leave laws mandate paid time off for employees to deal with their own health issues and care for sick family members. Eight of these laws took effect this year and another 10 are on the horizon for 2017, including paid sick leave for employees who work on certain federal contracts. Overall, there are 39 paid sick leave laws currently in effect or that will become effective in the next two years.
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(4) Transgender Employment Law
This year has also brought expanded protections for transgender employees. Most of the change has come not from the courts, but from the executive branch. Through guidance, rulemaking and litigation, the EEOC and Justice Department have worked to expand Title VII to include discrimination based on gender identity. President Obama has also issued executive orders increasing protections. But the new administration brings uncertainty, and these initiatives could easily be rolled back, increasing the significance of the court cases brought by private individuals.
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(5) Uncertainty Over the DOL’s Overtime Rule and Salary Thresholds
No issue has created more challenges for employers in 2016 than overtime. Companies worked most of the year to comply with the Department’s new salary thresholds for white collar workers. Just before the regulations were scheduled to go into effect, a federal judge in Texas issued a preliminary nationwide injunction. The DOL has appealed and requested expedited review, but no decision will come before President-elect Trump takes office. Under the new administration, the Department could choose to concede the case, eliminating the new salary thresholds all together.
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(6) NLRB Addresses Joint Employment
The National Labor Relations Board (NLRB) was extremely active this year, with many of its decisions favoring unions and workers. Laura Monaco of Epstein Becker Green comments on how the Board addressed joint employment in 2016.
"The Board continued to take an expansive approach towards joint employment this year. Last year, in the Browning-Ferris case, the Board expanded the definition of when two entities could be considered joint employers. And this year, in their decision in Miller & Anderson, they took it another step further. In the Miller & Anderson case, the Board found that temporary employees, so, for example, staffing agency employees, could organize into a single unit with an employer's direct hires, even if the employer did not consent to that arrangement. … So, employers need to remain mindful, not only of how their supervisors interact with temporary employees on a day-to-day basis, but also what their contracts say with, for example, temporary staffing agencies, how much authority they potentially could exert over those temporary employees."
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(7) NLRB Rules on Union Organizing
This year, the Board helped to expand union organizing with cases like Trustees of Columbia University, where it ruled that graduate students and research assistants can unionize and engage in collective bargaining as employees. The NLRB also continued its aggressive treatment of policies and handbooks in nonunion settings. It is unclear what lasting impact these decisions will have, as President-elect Trump will likely appoint a new majority to the Board along with a new General Counsel next year. But employers will continue to feel the effect of these rulings, at least in the short term.
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