FTC Proposed Rule to Ban Non-Compete Clauses

Staying up-to-date with the legality of non-compete clauses The FTC has proposed a rule to ban non-compete clauses. Non-compete clauses have allowed companies to reduce their competition by preventing employees from working at similar companies after leaving their employment. Depending on the wording of the clause, it may prevent independent contractors or employees from even working in the same field within a specified amount of time after leaving the company or project. It may prevent former employers from working within a certain geographic area for a period of time after their employment terminates. It may also prevent former contractors or employees from starting their own company in the same field. Other non-compete clauses require employees to repay the company for training expenses if they terminate within a specified amount of time. The FTC argues that such agreements lower wages for all workers in the particular field, those who signed the clauses along with those who did not. It considers such clauses an unfair method of competition. However, the FTC is asking for the public’s opinion on its proposal. Details of the New Proposed Rule to Ban Non-Compete Clauses The Federal Trade Commission (FTC) has proposed banning future non-compete clauses and rescinding existing non-compete clauses based on the following statistics: One in five American workers have signed non-compete clauses (approximately 30 million people) Banning non-compete clauses would end the restriction of better employment opportunities, resulting in an increase in American workers’ earnings between $250 billion and $296 billion per year As an employer, do you need legal help with employment contracts? By addressing legal concerns or questions early on, employers...

Lawsuits Involving Employee Mental Health Discrimination

Employer awareness of mental health discrimination Lawsuits involving employee mental health discrimination are on the rise and have been since 2018, according to the Equal Employment Opportunity Commission (EEOC). In 2020, the  EEOC ranked anxiety claims third and depression claims fourth based on the total number of Americans with Disabilities (ADA) claims filed. With the rising number of claims, it is important to have sound legal practices in place for employers to protect their businesses and to prevent mental health discrimination lawsuits. Specific Claims Involving Mental Disability The EEOC filed a complaint in December 2021 on behalf of a chief financial officer’s former employer, Ranew’s Management Co. The claim alleged that the company terminated him based on his mental disability. Allegedly, the CFO suffered from major, severe and recurring depression. His mental health state caused suicidal thoughts and mental disability that harmed his ability to sleep, concentrate, think and work. He informed his employer about his need to take off time from work to receive treatment. After cleared by his doctor to return to work, his employer fired him. Another case recently involved a U.S. district judge in the Southern District of New York. The judge evaluated the same issue in the Zuckerman case. The judge dismissed the employee’s claim, which stated that her anxiety disorder resulted in termination. The judge ruled that the claimant failed to show she in fact had a mental disability. The court noted, “difficulties with sleep and concentration are widespread.” The judge also stated that “many employees are anxious when interacting with their bosses and that many people find certain social settings to be...

The DOL Has Proposed a Rule Change for Independent Contractors

As an employer, what should you know about the proposed rule change? The proposed rule change for independent contractors would alter how employers classify a worker as an independent contractor versus an employee. The 2021 IC Rule Used by the Department of Labor (DOL) The 2021 IC Rule used by the DOL considered five factors to determine an independent contractor’s classification. The factors were: Employer’s degree of control over the work Worker’s opportunity for profit or loss Amount of skill required for the work Degree of permanence of the working relationship between the worker and employer Whether the work is part of an integrated unit of production The first two factors (employer’s degree of control over the work and worker’s opportunity for profit or loss) were “core factors.” They carried greater weight in the independent contractor analysis than the other three factors. Based on the two core factors, there was a substantial likelihood that the worker’s classification would be independent contractor or an employee. How does the current classification compare with the proposed change? The current classification approach to the analysis made it easier for employers to determine classification. The new proposed change will make it more difficult for employers. The new proposed change uses a totality-of-the-circumstances analysis rather than giving the two “core factors” more weight. In the totality-of-the-circumstances analysis, the five factors do not have a pre-determined weight. The rationale behind the proposed change is to eliminate misclassification. Misclassification denies workers federal protections such as minimum wage, overtime pay, insurance and other benefits. By comparison, independent contractors do not receive benefits, but they are able to experience...