iWe invite you to view Employment Law This Week® - a weekly rundown of the latest news in the field. We look at the latest trends, important court decisions, and new developments that could impact your work.
This week’s stories include ...
1. DOJ Cracks Down on Non-Solicitation Agreements
Our top story: The Department of Justice (DOJ) makes good on its promise to crack down on non-solicitation agreements. The DOJ’s Antitrust Division has entered into a settlement with two of the world’s largest railroad equipment manufacturers, part of the broader antitrust investigations announced by the agency in October 2016. According to the DOJ, the two companies had entered into a no-poaching agreement that “restrained competition for employees.” The civil complaint is the first case brought by the DOJ since its 2016 antitrust guidance statement. In a press release, the DOJ noted that this particular case was a civil one because the agreement ended before the 2016 guidance, but the agency said that it would criminally prosecute any violations that post-dated the guidance. Eddie Loya, a former federal prosecutor and Member of the Firm has more:
“You had two of the world's largest rail supply companies who, according to the DOJ, had a no-poaching agreement that was in place over the course of several years. The evidence in that case showed that there were senior executives at the two companies that had agreed both orally and in writing that they would have a no-poaching agreement. Although there was a written agreement in this case, the DOJ made it clear in announcing the settlement that they would prosecute cases where there was an oral agreement or where there was a handshake and a nod. And the DOJ is going to look at the company's relationships with one another, how business is done over time, and the entire circumstances to see whether or not companies, in fact, had an agreement not to compete with one another for employees. And so, companies need to be extra vigilant here and not be complacent and be under the misimpression that these types of cases are only set aside for the most egregious offenders.”
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2. Labor Department Releases First Opinion Letters
Opinion letters make a comeback. The U.S. Department of Labor’s Wage and Hour Division has released three opinion letters. The first explains when hourly employees with irregular work hours must be paid for time spent traveling between worksites. The second states that an employee’s 15-minute breaks required under the Family and Medical Leave Act are not compensable because they primarily benefit the employee. And the third explains that certain lump-sum payments qualify as earnings under the Consumer Credit Protection Act if made in exchange for personal services. Notably, these are the first opinion letters issued by the Division in nearly a decade. Last year, the Department of Labor announced a resumption of the practice, which was discontinued under President Obama.
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3. Senate Confirms John Ring to NLRB
John Ring joins the National Labor Relations Board (NLRB). The Senate has narrowly confirmed Ring to a seat on the NLRB. This returns the NLRB to a full five members and restores the 3-2 Republican majority. The management-side employment lawyer fills the seat left by former Chairman Philip Miscimarra. President Trump has now tapped Ring to serve as the NLRB’s Chairman. Member Marvin Kaplan, who had been serving as Acting Chairman, continues to serve on the NLRB.
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4. New State Law Developments Affecting Employers
There are two new state law developments to highlight this week on opposite coasts. New Jersey has passed the Paid Sick Leave Act, which requires all private employers to provide up to 40 hours of paid sick leave a year, regardless of the company's size. This law will preempt the patchwork of local sick leave laws within the state. And Washington State has passed #MeToo legislation prohibiting nondisclosure agreements related to discussing sexual harassment or assault allegations in the workplace. That law will go into effect on June 7.
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5. Tip of the Week
John Tomaszewski, Jr., from BDO USA, LLP, offers advice on updating compensation structures and benefits policies in 2018:
“With the tax reform changes becoming effective, there are a few key areas relating to executive compensation and benefits that employers should take action on now. The biggest changes impact executive compensation for public companies and tax-exempt organizations. For public companies, more executives and more compensation will be subject to the annual 1 million dollar tax-deduction limit. For tax-exempt organizations, there's a new 21% tax imposed on the employer for compensation paid to certain highly compensated employees in a year in excess of a million dollars, and on termination payments in excess of a calculated threshold. These changes may dramatically shift how executive compensation packages are structured for these employers.”
