A federal judge recently ruled in favor of a Department of Homeland Security regulation that permits the spouses of H-1B visa holders to work. According to this Forbes article, McDermott Partner Paul Hughes drafted the amicus brief for more than 40 companies and organizations.
“This decision confirms that tens of thousands of H-4 employees—highly skilled and critical members of their teams—are lawfully employed,” said Hughes. “The court’s correct analysis follows decades of consistent practice and recognition that the Executive may determine categories of visa holders eligible for employment.”
The US Court of Appeals for the Sixth Circuit recently upheld a district court’s grant of a preliminary injunction restricting a former employee from working for conflicting organizations or communicating with a competitor’s counsel. Stryker Emp. Co., LLC v. Abbas, Case No. 22-1563 (6th Cir. Feb. 16, 2023) (Clay, Bush, JJ.; Sutton, C.J.) The Court found that the preliminary injunction was an appropriate measure to protect the plaintiff’s confidential information that was consistent with the employee’s noncompete agreement.
On February 15, 2023, employers in California regained the ability to enforce mandatory arbitration as the US Court of Appeals for the Ninth Circuit ruled that Assembly Bill 51 (AB 51), which prohibited “forced arbitration” as a condition of employment, was pre-empted by the Federal Arbitration Act (FAA).
After years of litigation, the Ninth Circuit’s ruling upholds a federal district court’s preliminary injunction that temporarily blocked California from enforcing AB 51 and all but guarantees that AB 51 will never be enforceable. While California could seek review from the Ninth Circuit (en banc) or the Supreme Court of the United States, given the Supreme Court’s line of cases upholding FAA pre-emption, we think this decision will stand.
That said, US President Joe Biden’s Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (HR 4445) must not be ignored. Employers may include sexual harassment and sexual assault claims in a voluntary arbitration agreement, but an employee may choose to file these particular claims in court.
As of November 16, 2022, New Jersey Senate Bill No. 315 (S-315) has come into effect. The bill introduces fresh employment protections for qualifying employees of select private healthcare organizations that experience a “change in control.” The legislation mandates several obligations, such as giving prior notice, extending job offers to eligible employees, and providing improved job security against termination for a minimum of four months post-transaction. To avoid employment-related lawsuits and penalties, healthcare employers and investors in New Jersey must ensure compliance with these regulations.
CEOs may think they are fully in control of their workforces, but this belief may be more of an illusion than reality. In this Forbes article, McDermott Partner Michael Peregrine says certain pandemic-era changes to their authority may be more lasting than they realize–especially as it relates to their dynamic with the board of directors.
Employers, especially in the context of workforce reductions, may provide departing employees with severance agreements in exchange for a release. Those agreements often include non-disparagement clauses and confidentiality clauses regarding the terms and the amount of the agreement. On February 21, 2023, in McLarenMacomb, the National Labor Relations Board held that such clauses infringe on employees’ rights under the National Labor Relations Act. Importantly, McLaren applies to both unionized and non-unionized workplaces alike.
The board’s executive compensation committee is the focus point for many of the extraordinary financial, economic and operating challenges currently facing healthcare organizations. Executive compensation increases are impacted by both an inflationary economy and significant revenue downturn. In addition, the US Department of Justice has identified executive compensation as an important conduit through by which corporate compliance incentives and deterrence can be implemented. Furthermore, executive recruitment and retention amidst the “Great Resignation” remains a key compensation concern.
These and similar issues have become important agenda items for the board’s executive compensation Committee. Michael Peregrine is joined by industry experts Tim Cotter and Ralph DeJong for the first in a two-part conversation about the impact of the developments on the compensation committee, including:
Key topics for briefing the board’s compensation committee.
Increasing communication between the compensation committee and the C-Suite.
Addressing pressures felt by executive committee members.
Insights from the Sullivan Cotter compensation data survey.
Projections for the impact of inflation on next year’s salary increases.
Expectations for future CEO salary increases and organization departures.
The segmenting approach to leadership plans.
Coordination with the Audit & Compliance Committee on compensation incentives
On October 11, 2022, the United States Department of Labor (DOL) issued its Notice of Proposed Rulemaking (NPRM) seeking to undo the Trump administration’s 2021 independent contractor regulations and revert to the six-factor economic realities test. While the test factors remain the same (for the most part), the DOL’s NPRM advances interpretations of the various factors that support employment status at every turn.
California companies with more than 15 California-based employees will have to disclose hourly or annual salary ranges for all job postings by January 1, 2023. According to this HR Brew article, McDermott Partner Michelle Strowhiro said she recommends HR professionals review job descriptions with business leaders and legal counsel (preferably, under legal privilege). The goal is to identify and resolve overlap between rules and adjust salary bands accordingly.
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