Laborsphere

Will the DOL Exemption Rules Be Enjoined Before December 1, 2016?

The Department of Labor’s May 16, 2016 Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees require that, by December 1, 2016, employees must be paid a weekly salary of at least $913 (annually, $47,476) to maintain “white collar” exemption from overtime and other federal Fair Labor Standards Act requirements, as long as the employees’ duties satisfy the exemption rules too. We wrote about this previously.

Last month, twenty-one states, led by Nevada and Texas, filed an emergency motion to enjoin implementation of the Final Rule in a federal court action commenced the month before. State of Nevada, et al. v. DOL (USDC, Eastern District of Texas, case No., 4:16-cv-00731-ALM). At its core, the action challenges DOL authority to increase the salary threshold and set automatic increases, and whether the Final Rule infringes on state government employer’s sovereignty. This blog post does not analyze the merits of this action, but instead updates our clients and friends on its status given that we are now just a few weeks away from December 1.

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The SEC’s First Risk Alert of Fiscal Year 2017 Targets Registrant Rule 21F-17 Compliance

The Securities and Exchange Commission (SEC or Commission) Office of Compliance Inspections and Examination (OCIE) issued a Risk Alert on October 24, 2016, titled “Examining Whistleblower Rule Compliance.” This recent Risk Alert continues the SEC’s aggressive efforts to compel Rule 21F-17 compliance and puts the investment management and broker-dealer industries on formal notice that OCIE intends to scrutinize registrants’ compliance with the whistleblower provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank). By way of background, Dodd–Frank established a whistleblower protection program to encourage individuals to report possible violations of securities laws. Importantly, in addition to providing whistleblowers with financial incentives, Rule 21F-17 provides that no person may take action to impede a whistleblower from communicating directly with the SEC about potential securities law violations, including by enforcing or threatening to enforce a severance agreement or a confidentiality agreement related to such communications. As discussed in our prior publications, the SEC’s Division of Enforcement (Enforcement) has instituted several settled actions against public companies for violating the “chilling effect” provisions of Rule 21F-17. During the past two months, the SEC has filed two additional settled enforcement actions, as summarized below. Thus, as the SEC embarks on the start of its 2017 fiscal year (FY2017), Rule 21F-17 remains an agency-wide priority, and issuers, investment management firms, and broker-dealers—if they have not done so already—need to take heed and proactively remediate any vulnerabilities that they may have regarding their Rule 21F-17 compliance.

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Under New OSHA Rules, Employers May Not Conduct Post-Accident Drug Tests Simply as a Matter of Course

A mandatory drug and alcohol test after a workplace injury seems like a no brainer, right? Most companies believe so, which is why mandatory drug and alcohol testing after workplace injuries has become a common policy. However, new Occupational Health and Safety Administration (“OSHA”) regulations on electronic reporting of workplace injuries cast doubt on the continued legality of such policies. Specifically, OSHA’s new position is that mandatory post-injury testing deters the reporting of workplace safety incidents by employees and therefore employers who continue to operate under such policies will face penalties and enforcement scrutiny. In light of OSHA’s enforcement position, it is time for your company to review and revise its mandatory post-accident drug and alcohol testing policy.

Effective August 10, 2016,[1] OSHA’s final rules on electronic reporting of workplace injuries require employers to implement “a reasonable procedure” for employees to report workplace injuries, and that procedure cannot deter or discourage employees from reporting a workplace injury. The final rule, which amends OSHA’s regulation on Recording and Reporting Occupational Injuries and Illnesses (29 CFR 1904), requires employers to electronically submit injury and illness data to OSHA that they are already required to keep under OSHA regulations. Even though the content of these submissions depends on the size and industry of the employer, all employers are now required to: 1) inform employees of their right to report work-related injuries and illnesses free from retaliation; 2) clarify that an employer’s procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting; and 3) incorporate the existing statutory prohibition on retaliating against employees for reporting work-related injuries or illnesses.

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Antitrust Authorities Warn Human Resources Professionals about Illegal Agreements That Restrain Competition for Employees

On October 20, 2016, the United States Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) issued “Antitrust Guidance for Human Resource Professionals” regarding antitrust prohibitions of agreements that restrain competition for employees’ services. (Click the following links for a copy of this guidance, and the accompanying press release.) The guidance addresses business-to-business agreements regarding employee non-hiring and recruitment, and is intended to both remind HR professionals that these agencies have challenged such types of understandings over the past several years, and warn employers that the DOJ, in particular, intends to begin prosecuting at least some employers criminally in the months and years ahead.

The overall message is that employees are entitled to all of the benefits of competition for their services and that the FTC and DOJ are now increasing scrutiny of all practices that may impede those benefits. Some examples are formal or informal “wage-fixing,” “anti-poaching” and exchanges of compensation information generally. Over the course of the past several years, both agencies have challenged some of these practices in a variety of industries, particularly within the high-tech and healthcare sectors, as “per se” antitrust violations. These government actions have been followed by private class actions seeking treble damages, which in some cases, have resulted in judgments for hundreds of millions of dollars. As noted above, the DOJ now intends to treat at least some of these practices as felony criminal violations of the antitrust laws.

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Summary of Key New California Laws for 2017: What Employers Should Know

Governor Brown has this year signed several new laws impacting California employers, some of which have already gone into effect and others that will be effective or operative in 2017 or later. A summary of key new laws follows. The effective date of the particular new law is indicated in the heading of the Assembly Bill (AB) and/or Senate Bill (SB).^_[1] The list below is in numerical order by the AB or SB.

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My House My Rules: California Reigns In Employers’ Use Of Forum-Selection and Choice-of-Law Clauses to Avoid California Law

Last week, California Governor Jerry Brown signed into law Senate Bill 1241 (“SB 1241”). The new law (available here), which takes effect on January 1, 2017, adds section 925 to the California Labor Code (“Section 925”). In general, Section 925 will prohibit employers from requiring California-based employees to enter into agreements requiring them to: (1) adjudicate claims arising in California in a non-California forum; or (2) litigate their claims under the law of another jurisdiction, unless the employee was represented by counsel. Section 925 represents a considerable limit on parties’ rights to contract and may be the end of forum-selection and choice of law provisions, currently common in employment agreements.

For years, employers based outside of California have incorporated forum-selection and/or choice-of-law provisions in agreements with their California employees. Some employers used these provisions to create company-wide uniformity among their workforce. Others used forum-selection and choice-of-law provisions to avoid some of California’s more rigid rules about restrictive covenants. Whatever the motivation, forum-selection and choice-of-law provisions have become commonplace in employment and arbitration agreements.

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