With much about the potential impact and scope of monkeypox still unknown, employers should consider taking proactive steps now, as may be appropriate for their workforce, to enhance and reinforce the safety protocols already in place from the COVID-19 pandemic. In this Employee Relations Law Journal article, McDermott’s Michelle S. Strowhiro, Lindsay Ditlow and Priya Singh offer three key considerations for employers with respect to monkeypox.
The DOJ continues its efforts to create a novel area of potential criminal liability for labor market investigations. Historically, government enforcement of alleged anticompetitive labor market practices occurred in the civil context, resulting in fines for companies and individuals found to have participated in inappropriate practices. In late 2016, the DOJ began its campaign to expand Section 1 of the Sherman Act to include naked wage-fixing and no-poach agreements. Since then, labor market criminal investigations—now under their third administration—have become a programmatic and core DOJ investigative priority. This policy shift has resulted in many investigations and more than a dozen criminal cases filed against individuals and corporations to date.
The DOJ’s first two prosecutions for alleged labor market crimes went to trial in spring 2022. The DOJ’s attempts to jam a square peg into a round hole of a per se antitrust law violation resulted in full acquittals on the charged Sherman Act conduct in both instances. Despite the lack of precedent supporting the prosecution of certain labor market practices as per se criminal violations, the DOJ in both instances asserted that the mere existence of any naked wage-fixing or no-poach agreement would constitute a crime. In United States v. Jindal, the first-ever wage-fixing case, the DOJ alleged that the defendants entered into a conspiracy to suppress competition by agreeing to fix prices to lower the pay rates of certain employees. On April 14, 2022, a Texas jury found both defendants not guilty of all Sherman Act charges but convicted one defendant of obstructing a Federal Trade Commission (FTC) investigation.
In United States v. DaVita, Inc. and Kent Thiry (McDermott represented Mr. Thiry in the investigation and trial), the DOJ indicted the defendants on three counts of criminal conspiracy to allocate the market for employees by allegedly entering into non-solicitation agreements with three other companies. This was a landmark case of first impression—the first criminal trial of its kind for liability under the Sherman Act for so-called non-solicit agreements. The court did not agree with the DOJ that a typical per se approach was appropriate. First, the judge held that not every non-solicitation, or even every no-hire, agreement would allocate the market and be subject to per se treatment. The court also required the DOJ to prove that the defendants acted with the specific intent to constrain the labor markets. Given the draconian nature of the per se standard, the court held that the DOJ would “not merely need to show that the defendants entered the non-solicitation agreement and what the terms of the agreement were. It will have to prove beyond a reasonable doubt that the defendants entered into an agreement with the purpose of allocating the market” and that the defendants “intended to allocate the market as charged in the indictment.”
There were two important jury instructions in the same matter. In one, the court instructed that the jury “may not find that a conspiracy to allocate the market for the employees existed unless you find that the alleged agreements and understandings sought to end meaningful competition for the services of [...]
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Effective August 10, 2022, Colorado’s laws governing restrictive covenants were amended to provide additional limitations and hurdles for employers who seek non-compete and non-solicit agreements with their employees, including compensation thresholds and notice requirements. The new law also sets forth steep penalties for any violations. This article provides the details of these new restrictions.
On September 5, 2022, California Governor Gavin Newsom signed landmark legislation aimed at further regulating the working conditions and wages of California’s fast- food workers. This bill has immediate impact on certain employers and franchisors doing business in the Golden State.
Assembly Bill (AB) 257, also known as the Fast Food Accountability and Standards Recovery Act or the FAST Recovery Act, authorizes the creation of a Fast Food Council (Council) that will be tasked with establishing minimum standards with respect to the minimum wage, maximum hours of work, the standard conditions of labor and other working conditions for fast-food workers throughout California.
The Family and Medical Leave Act (FMLA) was enacted in 1993, a year when the idea of working a corporate job from a living room was rare. When the law was passed, the FMLA didn’t contemplate a remote workforce. Now, and especially post-pandemic, many companies are embracing a fully remote workforce (e.g., sales representatives, healthcare medical device technicians and software engineers). While employees’ needs for a leave of absence have always been around, remote employment and its effects on the applicability of the FMLA requirements has not. For well over two years, many employees have been working from home. Some report to a manager at the headquarters or worksite. Plenty of remote employees, however, report to an individual who also works remotely. The new remote landscape is making what used to be an easy application of FMLA eligibility into a difficult analysis. This article examines the FMLA regulatory framework for remote employees, a recent Texas federal court decision on the issue and the practical options that employers have moving forward.
As of July 26, 2022, there are 3,591 confirmed cases of monkeypox in the United States, according to US Centers for Disease Control and Prevention (CDC) data, and the World Health Organization (WHO) Director-General has declared the multi-country monkeypox outbreak a Public Health Emergency of International Concern (PHEIC). With much about the potential impact and scope of monkeypox still unknown, employers should consider taking proactive steps now, as may be appropriate for their workforce, to enhance and reinforce the safety protocols already in place from the COVID-19 pandemic.
Last month, the Washington Court of Appeals affirmed a lower court’s decision to dismiss a challenge to the recently enacted payroll expense tax in Seattle, WA. Seattle Metro. Chamber of Commerce v. City of Seattle, No. 82830-4-I, 2022 WL 2206828 (Wash. Ct. App. June 21, 2022).
The tax, which went into effect on January 1, 2021, applies to entities “engaging in business within Seattle” and is measured using the business’s “payroll expense” (defined as “compensation paid in Seattle to employees,” including wages, commissions, salaries, stock, grants, gifts, bonuses and stipends). The tax only applies to businesses with a payroll expense of more than $7 million in the prior calendar year, and compensation is considered “paid in Seattle” if the employee works more than 50% of the time in the city.
On May 23, 2022, the California Supreme Court issued its decision in Naranjo v. Spectrum Sec. Servs. Inc. (Naranjo), holding that meal and rest break premiums (also known as extra pay or premium pay) constitute “wages” that: (1) must be accurately reported on employee wage statements pursuant to Labor Code section 226 and (2) must be timely paid to employees to avoid waiting time penalties pursuant to Labor Code section 203. The Court explained that “although the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period.” Thus, employees may be entitled to wage statement penalties and waiting time penalties where the employee worked through their break.
As a result of the COVID-19 pandemic, remote working became a necessity. Despite the easing lockdowns, the trend is likely to stay, particularly with “workstations” being actively promoted by the travel industry; however, there are considerable tax consequences for international employers. In this International News article, McDermott’s Gero Burwitz and Isabella Denninger discuss the complexity of this new working order and how international businesses can navigate it.
On January 15, 2022, the New York City Council enacted Local Law 32 of 2022 (Wage Transparency Law or Law) to amend the New York City Human Rights Law (NYCHRL) to require that most employers include compensation data in their job advertisements. The Law was supposed to take effect on May 15, 2022, however, it faced criticism over a number of ambiguities, including undefined penalties. In response, on April 28, 2022, the New York City Council passed an amendment to the Wage Transparency Law. Among the biggest changes is that employers now have until November 1, 2022—more than six months—to ensure compliance with the Law’s requirements. If Mayor Eric Adams signs the Law, which he is expected to do, New York City will become the second jurisdiction in the country (the first being Colorado) to require employers to include minimum and maximum potential salary amounts for open positions in job postings.
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