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This week’s stories include ...
(1) Social Media Content Key for Non-Solicit Violations
Our top story: An Illinois appellate court weighs in on social media and solicitation. The case involved a defendant who sent LinkedIn connection requests to three former coworkers, even though he had signed a non-solicit agreement. In considering whether social media activity violates non-solicitation agreements, other courts have drawn a distinction between passive social media activity and more active, direct activity. Though these requests were made directly to the former coworkers, the court in this case ruled that the content constituted passive activity because the defendant did not discuss his new job in any way, nor did he directly attempt to recruit his former coworkers. The court concluded that sending the connection requests did not violate the prohibition against inducing co-employees. Brian Spang, from Epstein Becker Green, has more:
“This particular agreement only prohibited direct inducement. It prohibited the employee from inducing other employees to leave. It could have and should have included a restriction against both direct and indirect inducement. This is important because the court pointed out in multiple places that the plaintiff did not present any evidence of ‘direct’ inducement. . . . I think that a non-compete or non-solicit agreement can specifically reference social media as a potential avenue for violation of the agreement.”
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(2) Washington State Approves Paid Family and Medical Leave Law
Paid family and medical leave comes to Washington State. Washington becomes another of the increasing number of states mandating paid and protected family and medical leave for employees. Washington’s law, which takes effect in 2020, provides the most generous mandated income replacement benefit for paid leave in the country. The new law provides for up to 90% of an employee's income for as much as 18 weeks of protected leave in a year. And the new law applies to employers with 50 or more employees. Payroll deductions to fund the benefit may begin on January 1, 2019.
(3) House Republicans Ready Joint-Employer Legislation
Congressional Republicans have readied new joint-employer legislation. As we previously reported, the Department of Labor has withdrawn the Obama-era guidance advocating the “indirect control” standard for joint employment. The National Labor Relations Board (NLRB) could be the next target. Republicans in the House are planning to introduce legislation that would overturn the NLRB’s controversial Browning-Ferrisdecision, which first established the “indirect control” standard. The legislation is expected soon and could include updates to the National Labor Relations Act as well as the Fair Labor Standards Act (FLSA).
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(4) Ninth Circuit: Mortgage Underwriters Are Not Exempt from Overtime
Mortgage underwriters are not exempt from overtime pay, the U.S. Court of Appeals for the Ninth Circuit says. A three-judge panel found that underwriters for a savings bank did not qualify for the administrative exemption to the FLSA’s overtime requirements. Reversing summary judgment in favor of the employer, the Ninth Circuit noted that the underwriter’s job duties were aimed at producing a reliable loan rather than at administering or managing the business. With this ruling, the Ninth Circuit aligns with Second Circuit precedent but reaches a different conclusion than the Sixth Circuit, which found that mortgage underwriters at a different bank did qualify for the administrative exemption.
(5) Tip of the Week
Helen Skinner, Senior Counsel for the Panasonic Corporation of North America, shares some advice on employee benefits and compensation considerations during the M&A process.
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