Employment Laws

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Out with the old and in with the new?  Not so fast.  For California employers, it’s more like keep the old and add the new.  And, as so often happens, the new year brings new concerns.  While this list is not exhaustive, California employers should keep their sights on the following new state and local regulations or requirements for 2017:

In Part 1 and Part 2 of this series of posts, we began the discussion of what the Defend Trade Secrets Act (DTSA), enacted in May 2016, really means for employers in defending their trade secrets.  In particular, we addressed some of the “good” the DTSA offers for employers, including:  (1) a clear path to federal court, (2) ex parte seizure orders and (3) international application.  In this Part 3, we address the bad — four potential downsides of the DTSA for employers.

Summary

A nationwide junction was issued Tuesday evening blocking implementation of the U.S. Department of Labor’s new rules increasing the minimum salary levels required for most white collar exemptions. These new rules had been scheduled to go into effect on December 1, and would have raised the minimum annual salary level for most exemptions from $23,660 to $47,476. The injunction halts enforcement of the rule until the Department of Labor receives a contrary order from the issuing court or an appellate court. But, since Texas is in the Fifth Circuit, which is a traditionally conservative court, the Department of Labor faces an uphill climb and it is unlikely that the new rules will go into effect in the foreseeable future.

The press has been filled with stories about the new Fair Labor Standards Act (FLSA) regulations which raise the minimum salary level required for employees to be exempt from overtime pay.  Specifically, the new regulations — currently set to take effect on December 1, 2016 — raise the minimum salary level required for exempt employees under the executive, administrative and professional exemptions from $455 per week to $913 per week, or from roughly $23,660 annually to $47,456 annually. Often overlooked, however, is the fact that the new regulations also significantly affect the “highly compensated employee” (“HCE”) exemption, as well.

As we all learned in school, the First Amendment to the U.S. Constitution prohibits Congress from making laws that “abridge the freedom of speech.”  Employer-created rules and decisions are not acts of Congress, of course, and are not subject to the First Amendment.  So, employers can terminate their at-will employees (all employees without an employment contract) for a good or even a bad reason, including having a bad attitude, right?  Wrong, according to the National Labor Relations Board, at least when that bad attitude expresses itself in voicing concerns about their job.

In another example of the National Labor Relations Board (“the Board”) reaching into a non-union employer’s workplace, it ordered dance production companies that run two Las Vegas shows (Vegas! The Show and The BeatleShow) to reinstate several dancers whose employment was terminated for performance and attitude problems that spanned several years of time.  David Saxe Prods., LLC, 364 NLRB No. 100 (Aug. 26, 2016).  In a letter to one of these employees, the owner of the production companies stated:

In Part 1 of this post, we began the discussion of what the Defend Trade Secrets Act, passed in May 2016, really means for employers in defending their trade secrets.  In particular, Part 1 addressed some of the “good” the DTSA offers for employers, particularly:  (1) a clear path to federal court, (2) consistency in application, and (3) ex parte seizure orders.  In this Part 2, we address the rest of the good — five more positive benefits of the DTSA for employers.

Do you do business with the federal government?  If you do, you (hopefully!) know that keeping up with the rules and regulations of being a federal contractor are no easy task.  But we are here to help!

Lawyers at our firm, including HRLawMatters contributor Jim McCabe, have written an incredibly helpful article to help federal contractor employers comply with recent changes to their obligations. This article was recently published on the DirectEmployers Association website – and you can see it at this link here. 

As discussed in Part I (posted earlier this week), a number of states and local municipalities have enacted paid sick leave legislation mandating paid time away from work for employees. While some of these laws are already in effect, others are coming soon.  Employers with operations in the following areas should revisit their policies and make adjustments as needed to plan for these upcoming changes:

A number of states and local municipalities have recently enacted paid sick leave legislation mandating paid time away from work for employees. Unfortunately for employers, many of these laws contain provisions that conflict with already-enacted paid sick legislation and require an adjustment of current policies, leading to confusion about requirements and entitlements.

Employers with operations in the following areas should revisit their policies and make adjustments as needed to remain current or to plan for upcoming changes:

Franchise agreements typically make clear that a franchisee is a separate entity from the franchisor and that the franchisor has no liability as an employer of anyone the franchisee hires and employs.  Indeed, traditionally franchisors have not been routinely deemed joint or co-employers with their franchisees.  This is because the franchisor usually does not control hiring, firing, wages, breaks, and other day-to-day operations of the franchisee to the extent necessary to create an agency relationship between a franchisee’s employee and the franchisor.  A recent case decided by a federal court in California, however, might put that traditional thinking and legal relationship in doubt.