In the wake of the #MeToo movement, a number of states are considering legislation that would limit an employer’s ability to use non-disclosure agreements (“NDAs”) when settling sexual harassment claims. New York was the first state to enact such legislation, which was passed as part of a wide-ranging budget bill that takes effect July 11, 2018. New York’s law bans non-disclosure provisions in settlements of claims involving sexual harassment allegations, unless confidentiality is the “complainant’s preference,” provided some onerous procedures are complied with. Washington State passed a similar law. Arizona, California, and Pennsylvania are also considering legislation to restrict the use of NDAs.
As we previously reported, a federal district court in Philadelphia recently struck down the provision of Philadelphia’s salary history ban prohibiting employers from asking about salary history (the “inquiry provision”), but upheld the provision of the law prohibiting employers from relying on such information (the “reliance provision”). The law was initially scheduled to take effect May 23, 2017, but had been stayed by the district court pending resolution of the Philadelphia Chamber of Commerce’s challenge to the law. The Judge’s decision ostensibly resolved the litigation at the district court level, however, both the Chamber of Commerce and the City of Philadelphia have appealed the ruling to the Third Circuit Court of Appeals. The Third Circuit has not yet issued an order staying the reliance provision, which the district court upheld. We therefore caution Philadelphia employers to act as though the reliance provision is in full effect, and to refrain from relying on salary history information in determining employees’ compensation. We will continue to report on the appellate process as it unfolds.
Let me begin by explaining that this article does not focus on the janitorial profession and whether non-competes in that profession are enforceable. That’s a topic for another day. Instead, this fourteenth article in The Restricting Covenant series discusses a concept that some courts and litigants refer to as the “janitor analogy” or the “janitor test,” when analyzing or illustrating the overbroad scope of a non-compete provision.
In Any Capacity?
The janitor analogy is most often invoked in cases where the employer’s non-compete agreement prohibits a former employee from being employed or affiliated with a competitor “in any capacity” or “in any manner.”
As a reminder, the New York City Earned Safe and Sick Time Act (“Paid Safe/Sick Leave Law”) became effective on May 5, 2018. The Paid Safe/Sick Leave Law applies to all employers with five or more employees who work more than 80 hours a year in New York City and requires employers to provide up to 40 hours (5 days) of paid safe and sick leave. Employers with less than five employees must provide unpaid sick and safe leave. In order to notify employees about their rights under the Paid Safe/Sick Leave Law, New York City employers must distribute written notice to their employees on the first day of employment or by June 4, 2018. Employers can find the new Notice of Employee Rights on the New York City Department of Consumer Affairs (“DCA”) website, available here. The DCA also provides the new notice in Spanish, Chinese and 24 other languages.
Recently, the California Supreme Court issued its decision in Alvarado v. Dart Container Corporation of California. The Court’s decision changes the manner in which an employer must calculate overtime for employees who earn a flat sum bonus during a single pay period. Accordingly, based on the Court’s decision, this is yet another area where the rules in California differ from the federal rules. This decision is significant because it applies retroactively subject to the applicable statute of limitations.
By way of background, both state and federal laws require that amounts awarded as bonuses be included in determining a non-exempt employee’s overtime rate, except in the case of discretionary bonuses. This means that when the employee works overtime hours and receives a non-discretionary bonus, this bonus program will increase the non-exempt employee’s hourly rate for calculating overtime.
In a long-awaited decision, the United States Supreme Court, by a 5-to-4 vote, overturned the National Labor Relations Board’s (the “Board”) ruling that class action waivers violate the National Labor Relations Act (NLRA) because they interfere with the right to engage in “protected activity,” which, according to the Board, includes the ability to bring class or collective actions. Epic Sys. Corp. v. Lewis, No. 16-0285, 2018 WL 2292444, at *23 (U.S. May 21, 2018).