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COMMON SENSE SOLUTIONS
FOR
YOUR CHANGING WORKPLACE
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BE ON THE ALERT: STATE LEGISLATURES INCREASINGLY WEIGHING IN ON COVENANTS NOT TO COMPETE!
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For many years, covenants not to compete were governed in most states by 'judge-made' common law, which generally allowed their use by employers in regards to post-employment competition if they were determined to be reasonable in terms of scope as to time and geographic area and supported by adequate consideration. Only a few states, including California, Oklahoma, North Dakota, Wisconsin and Nevada, had statutory provisions that dealt with this area of law. The first three states listed---CA, OK and ND largely prohibited their use, while the latter two, (WI and NV), codified the principle that they must be reasonable in scope to be enforced.
Recent years, however have seen other states passing legislation to regulate this area of law, particularly focusing on restricting the wage-level of employees who can be subjected to non-competition agreements.
On January 1, 2017 the Illinois Freedom to Work Act (the "Act"), became law. The Act expressly prohibits private sector employers from entering into a "covenant not to compete with any low-wage employee of the employer." Any such agreement "is illegal and void." The Act's definition of "covenant not to compete" is fairly broad, and includes any agreement that restricts the employee from performing: A. any work for another employer for a specified period of time; B. any work in a specified geographical area; or C. work for another employer that is similar to such low-wage employee's work for the employer included as a party to the agreement.
"Low-wage employee" is defined as "an employee who earns the greater of (1) the hourly rate equal to the minimum wage required by the applicable federal, state, or local minimum wage law or (2) $13.00 per hour.
And earlier this month, Massachusetts Governor Charlie Baker signed into law the Massachusetts Noncompetition Agreements Act. This Act goes much further than the Illinois law in setting out detailed legal requirements for the enforceability of such agreements against former employees who reside or work in Massachusetts on the date employment terminates or during the 30 days before employment terminates. The Act applies to agreements entered on or after October 1, 2018. The Act also goes much further in identifying four types of workers against whom a noncompetition agreement cannot be enforced: (1) employees classified as nonexempt under the Fair Labor Standards Act; (2) undergraduate or graduate students engaged in an internship or short-term employment while enrolled at a full- or part-time undergraduate or graduate educational institution; (3) employees who are terminated without cause or laid off; and (4) employees who are 18 years old or younger. The Act does not define what constitutes "cause" in an involuntary termination.
A full analysis of these recent enactments is, of course, beyond the scope of this MMM. We urge you to carefully review state common law, and increasingly state statutory law when drafting these very important agreements------including the important decision as to which state's laws you choose to apply to their enforcement. For further information or assistance in these regards, please call any PSB attorney.
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WARNING
: ENGAGE IN THE ADA INTERACTIVE PROCESS
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Who is running the store? A recent 6th Circuit Court of Appeals decision affirming a $600,000 jury verdict against an employer for an unlawful termination in violation of the ADA should be a wake-up call to engage in the ADA interactive process. The Plaintiff, a diabetic cashier, kept orange juice by her register in case she suffered a hypoglycemic seizure while working, sometimes alone, with customers in the store. Her employer, Dollar General, prohibited her from doing this, citing its rule prohibiting food or drink at the register. She complied with the rule. She then had two episodes where she went to the cooler grabbed orange juice, drank it, and then paid for it. Her supervisor fired her for violating its "no-grazing" policy, which prohibits employees from consuming food/drink before paying for it.
She filed a charge of discrimination, and the EEOC sued Dollar General in federal court. After trial, a jury awarded the plaintiff $27,565 in back pay, $250,000 in compensatory damages, and $450,000 in attorney's fees and expenses. On appeal, the 6th Circuit affirmed the jury verdict, rejecting Dollar General's argument that she could have treated the episode with candy or glucose tablets. The court noted that Dollar General denied her request to keep orange juice by the register, and then failed to engage in the interactive accommodation process to find a solution to the problem, despite its duty to do so. The Court noted that had the employer engaged in the interactive process, it might have resolved the problem with glucose tablets or some other satisfactory solution. But it did not, and it was reasonable for the jury to decide that it was Dollar General's fault, not the plaintiff's.
N
oli esse stultus
.
If you run up against an ADA disability situation that you are not sure how to handle - call PSB Legal. We are here to help. No question is stupid.
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PSB CONSULTING IS HERE TO HELP!
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Small projects? Big projects? Transitional needs while you hire your next your Human Resources person? Or perhaps you are a smaller company that needs only a part time dedicated person to assist you in HR!
Contact PSB Consulting to see how we can help. We work on a project basis or as an extension of your team.
For more information:
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|  PAUTSCH, SPOGNARDI & BAIOCCHI LEGAL GROUP is a law firm dedicated to finding common sense, affordable solutions for businesses to labor, employment, human resource and general business needs. With over 75 combined years of experience among its 3 founding partners in these areas, we can assist businesses in developing custom solutions to today's tough issues. And as litigators, who combined have over thousands of trials "under their belts" before state and federal courts as well as administrative agencies (such as the NLRB) you will find no better advocate and partner.
For more information on the firm, please go to our website at www.psb-attorneys.com or Lisa at [email protected] |
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