Non-compete agreements between employers and their employees traditionally are governed by state law. But that did not stop the Antitrust Division of the Department of Justice (DOJ) from recently filing a statement of interest encouraging a Nevada state court to consider federal antitrust principles to invalidate non-compete agreements between a large medical group and its physician-employees. Taken together with other recent actions by the president and federal enforcement agencies, the DOJ’s decision to file this statement signals a more aggressive approach to non-compete enforcement at the federal level.
Tag: Employer Liability
Employment Law Update: Employer Restrained from ‘Firing and Rehiring’, Dismissal for Raising Frivolous Grievances, and Employment Status of Taxi Driver
Tesco Restrained From ‘Firing and Rehiring’ Employees
In USDAW and ors v Tesco Stores Ltd [2022] EWHC 201 (QB), the High Court (HC) granted an injunction to restrain U.K. supermarket giant, Tesco, from ‘firing and rehiring’ employees who did not agree to the removal of a permanent right to a benefit.
This decision is significant as it offers a potential new legal remedy for employees whose employers are looking to ‘fire and rehire’ them in order to remove a permanent entitlement. The practice of ‘fire and rehire’ was already controversial and under increasing scrutiny prior to this decision, and it will be interesting to see the extent to which employers will try to deploy it in the future.
Luxembourg Transposes EU Whistleblower Protection Law
On January 12, 2022, Luxembourg’s Minister of Justice submitted to the country’s legislature Bill 7945, which transposes Directive (EU) 2019/1937, otherwise known as the Whistleblower Protection Directive (“Directive”). The official deadline for EU member states to transpose the Directive into national law was December 17, 2021, however, nearly every state, including Luxembourg, failed to meet this deadline. Now that Bill 7945 has been presented to the legislature, experts will review it and compare the legislation against the requirements of the Directive. Given the expiration of the deadline for transposition in December, the legislature is expected to act quickly in passing Bill 7945 into law, so as to avoid the European Commission taking legal action for non-implementation.
Bill 7945 provides a framework to protect individuals who have obtained information in the work context about acts or omissions that violate national law or are against the public interest, and report protected information in any of the manners proscribed by the draft law. Specifically, Bill 7945 protects reports made by current and former employees, prospective employees, volunteers, trainees, self-employed individuals, shareholders, contractors, subcontractors, and suppliers. To be protected under the draft law, individuals must have reasonable grounds to believe the information they report is true and that it falls within the scope of the measure. The measure prohibits retaliation against individuals based on them reporting protected information in accordance with the draft law’s provisions.
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Several States are Increasing Penalties for Enforcing Non-Compete Agreements
As non-competition laws and the scrutiny of non-compete agreements continue to be in the spotlight, several states are revisiting their non-compete laws. Colorado has been in the spotlight after the Colorado Legislature passed S.B. 21-271 on July 6, 2021 in an effort to reform the sentencing provisions related to numerous petty offenses and misdemeanors. As a result, several Colorado laws related to labor and employment are affected, including Colorado’s statute addressing restrictive covenant agreements, C.R.S. § 8-2-113.
Under C.R.S. § 8-2-113, it is unlawful to: intimidate workers in order to limit their ability to engage in lawful work; and enter into covenants that restrict trade, such as non-compete and non-solicitation agreements, unless the covenants fit within limited exceptions provided under the statute. The penalty if convicted for violating the non-compete statute is currently a misdemeanor punishable by a fine between $10–$250, or jail time of not more than 60 days, or both. C.R.S. § 8-2-115. Effective March 1, 2022, the penalty for violating the non-compete statute will be increased to a class 2 misdemeanor punishable by up to 120 days in jail, or a fine of up to $750, or both, as a result of the changes from S.B. 21-271. S.B. 21-271 also amends the text of C.R.S. § 8-2-113 to include the increased penalty as a new subsection (4).
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Illinois Supreme Court: BIPA Claims Not Barred By Workers’ Compensation Act
Companies with Illinois employees have been bombarded with class action lawsuits under the Illinois Biometric Information Privacy Act (BIPA) over the last several years. These lawsuits generally allege that employers have not complied with BIPA’s notice and consent requirements before collecting or disclosing employees’ biometrics. One of the defenses has been that such claims are preempted under the Illinois Workers’ Compensation Act (IWCA) as workplace injuries, and thus cannot be brought in court. However, on February 3, 2022, in a long-awaited decision, the Illinois Supreme Court held in McDonald v. Symphony Bronzeville Park, LLC, 2022 IL 126511, that preemption does not apply to BIPA claims raised by employees for damages, thereby allowing such claims to proceed in court.
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U.K. Employment Tribunal Decisions: When Employees Refuse to Attend the Workplace for Fear of COVID-19
Recent Employment Tribunal (ET) decisions have shed light on the risks that can arise for employers where employees refuse to attend the workplace because of COVID-19 concerns. We consider below how ETs have dealt with claims of discrimination and automatic unfair dismissal related to COVID-19.
Discrimination
In X v. Y (ET 241947/2020), an employer withheld an employee’s wages after she refused to attend the workplace due to her fear that she would contract COVID-19 and pass it on to her vulnerable husband. The employee brought a claim for unlawful discrimination arguing that her opinion regarding the risk of COVID-19 and the need to protect herself amounted to a philosophical belief that was capable of constituting a protected characteristic under the Equality Act 2010. The ET disagreed. It found that the employee’s view was not a philosophical belief protected under the Equality Act 2010 but “a widely held opinion based on the present state of information” and a “reaction to a threat of physical harm”. Her claim therefore failed.