Judge Blocks FTC Noncompete Ban

 Just a brief post to note that, as I predicted, a red state judge, at the urging of Republicans, has blocked the FTC from implementing its ban on noncompete agreements. 

Here is the ruling.

The Supreme Court, as currently constituted, will almost certainly uphold this ruling. So I would urge you, if you think noncompetes should be eliminated, to vote for Democrats in every single election this cycle. Republicans have blocked every single attempt to ban or reduce noncompete agreements since I started practicing in 1986. They will keep doing so.

Noncompetes are abused to force workers into staying in terrible working conditions. They suppress wages. They are terrible for the economy and innovation. 

Until some new Supreme Court judges can be appointed, the law won't change on the federal level so you will have to look to state legislatures to change things in your state. There have been substantial limitations placed on noncompetes in blue states like California, New York, and Massachusetts. So if your state legislature won't change the law, vote to change your legislators.

Supreme Guts Agencies Like OSHA, DOL, FTC, EEOC, and NLRB

 You may not have been paying attention to the Supreme Court's recent decision about fishing, but it's yuuuge. They overturned a ruling from 1984 saying that courts must defer to federal agencies' reasonable interpretations of federal statutes. This is commonly referred to as "Chevron deference" or the "Chevron defense," in case you hear those terms. And on first blush, you're probably asking yourself what the heck a case about fishing regulations has to do with employment law.

The answer is: a lot.

This year, federal agencies under the Biden administration have actively taken actions that benefit workers. I've written about some of these. NLRB has said that noncompete and nonsolicitation agreements mostly violate the National Labor Relations Act, that many handbooks contain illegal provisions, and that advocating for non-employees is legally protected against retaliation. EEOC has posted updated guidelines on harassment, pregnant workers, and visual disabilities. The FTC has banned most noncompete agreements (litigation pending). OSHA has posted guidelines about wildfire smoke and other workplace safety issues. The Department of Labor has posted guidelines on which employees are independent contractors. Even the Treasury Department got into the act and issued a report blasting noncompete agreements. 

These are just a few of the many pro-employee actions taken by the Biden Administration's federal agencies.

To make things even more difficult the Supremes also gutted the 5 year statute of limitations that Congress passed for challenging agency regulations, so companies that want to challenge old rules just have to form a new entity and sue away. The courts will soon be overwhelmed with these lawsuits.

For workers, this means that every single pro-employee regulation will be challenged, no matter how old. I guess the good news is that unions can step into the fray and start challenging old anti-employee regulations. There will be no settled federal law on many important employment law issues for years to come, thanks to this ruling.

Vote well, friends.

NLRB Says Noncompete and Nonsolicitation Agreements May Violate National Labor Relations Act

President Biden issued an executive order that all federal agencies look into noncompete agreements, and they have been doing so. The FTC recently banned most of them (don't get too excited though as Republicans challenge this), and now NLRB is stepping in.

In a recent decision, the NLRB determined that an employer's 12 month noncompete and 24 month nonsolicitation agreements violated the National Labor Relations Act. Some key takeaways:

a.    These agreements can have a chilling effect on employees who want to discuss possible unionization or working conditions.

b.    Employees dependent on a paycheck will be afraid to rock the boat.

c.    If employees are unable to find similar work because it's prohibited, they will be even more afraid to speak up.

d.    Employees could be afraid of discussing unionization for fear of being accused of inducing employees to leave.

e.    There are far less oppressive ways to protect confidential information.

f.    The very existence of a rule, whether or not there has been any attempt to enforce, can violate the law.

Here are some key quotes from the opinion that might help you if an employer seeks to enforce one of these agreements against you:

• An employee who is dependent on Respondent for a paycheck would reasonably view the cited provisions in the employment agreement as limiting their ability to engage in union and other protected activities. The prohibition in Provision 1(C) on soliciting employees to leave Respondent’s employ would dissuade a reasonable employee from engaging in protected activity like telling their coworkers about the wages and benefits offered by the Union out of a reasonable fear that Respondent might accuse them of inducing other employees to quit. 
• Not only is this provision ridiculously broad in scope (could an employee indirectly engage with a competitor by sending a family member to buy something from its store?), but it would also cause a reasonable employee to refrain from engaging in protected activities that come with a risk of retaliation. 
• If an employee knows they are barred from being involved in any capacity with any company that operates a similar business to Respondent, they will logically be more fearful of being fired and less willing to rock the boat because they face the prospect of being unable to find any work in their geographic area if they are fired or forced to leave their job. 
• All three of the challenged provisions would deter a reasonable employee from working for other employers in the area as a union salt or recruiting others to do so for fear of being accused of inducing other employees to leave, being forced to tell their supervisors about job offers they receive, or having Respondent find out they are working for one of its competitors.
• The non-competition clause in Provision 2(A) applies for 12 months after employees leave, but in practice it also applies to employees while they are working for Respondent, as most employees find a new job before leaving their old job, and the knowledge that they will be unable to work for a competitor in their geographic area if they are fired or leave would necessarily impact their behavior before and after they leave Respondent’s employ. 
• Because employees are required to sign Respondent’s employment agreement at a time when they are economically dependent on Respondent, I find that the above provisions unlawfully chill employees from participating in protected activities both during and after their employment with Respondent. 
• A reasonable former employee would continue to be chilled from engaging in union and other protected activity by the threat of damages and legal fees for violating the agreement. It is unlawful for an employer to restrain former employees from engaging in protected activity.
• The agreement itself states that the rule against soliciting other employees prevents “pirating,” the requirement that employees report job offers is in place to “protect [Respondent’s] rights under this Agreement” and that the noncompetition provisions are in place because employees may have information about its customers, employees, and business arrangements. There are other, unchallenged, portions of the agreement that address these concerns, including provisions requiring employees to turn over confidential and proprietary information and prohibiting them from trying to divert Respondent’s customers. Therefore, the stated justifications are insufficient to rebut the presumption that the provisions are unlawful, particularly in the absence of any evidence that Respondent’s objectives could not be addressed with a more narrowly tailored rule.
• When a rule chills employees in the exercise of their Section 7 rights, the Board has the authority to prevent it from “cowing…employees into inaction” by blocking it even before the “chill is manifest.”
• Nor does the Board have to wait for a work rule to be enforced before it acts, as it “has long and consistently recognized that an employer’s mere maintenance of a work rule may unlawfully interfere with, restrain, or coerce employees in the exercise of their Section 7 rights.”

Noncompete agreements and, to some extent, nonsolicitation agreements, work to suppress wages, make employees afraid of being fired, force employees to put up with terrible working conditions, and are generally a menace to society. I'm glad to see that the federal agencies are finally waking up to their evils. 

Vote well in the upcoming election if you want to let President Biden keep pushing to limit these awful agreements.

If you have a noncompete or nonsolicitation agreement and want to know if it's enforceable, talk to an employee-side employment lawyer in your state.

FTC Bans Most Noncompetes - But Don't Get Too Excited

The long-awaited rule from the Federal Trade Commission regarding noncompetes was released yesterday, and it's a doozy. The FTC "has determined that it is an unfair method of competition, and therefore a violation of Section 5 of the FTC Act, for employers to enter into noncompetes with workers and to enforce certain noncompetes."

You can safely assume there will be lots of litigation over this new rule. And I wouldn't hold my breath that the Supreme Court in its current makeup will uphold it. Meanwhile, until a court says otherwise, the rule is in place. What does it mean?

Effective date: The rule isn't effective until 120 days after publication in the Federal Register, so presumably that will be from yesterday. That means the rule will be in effect on August 21, 2024.

Existing noncompetes: Most of them are now deemed illegal and unenforceable, except those involving "senior executives," defined as those earning more than $151,164 who are in a “policy-making position”. But most noncompetes are illegal anyhow, with or without the rule, in my opinion. There are many defenses to noncompetes that exist even if this rule is tossed, and that can help people who are waiting for the effective date.

Future noncompetes: Most will be illegal except those for business purchases.

Noncompete clause defined: "Non-compete clause means: (1) A term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from:  (i) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (ii) operating a business in the United States after the conclusion of the employment that includes the term or condition.  (2) For the purposes of this part 910, term or condition of employment includes, but is not limited to, a contractual term or workplace policy, whether written or oral." 

Nonsolicitation agreements: These are provisions saying you can't solicit employees or clients of the company for 1 - 2 years or so. They aren't specifically banned. However, many will be banned in my opinion. The FTC says this:

Non-solicitation agreements are generally not non-compete clauses under the final rule because, while they restrict who a worker may contact after they leave their job, they do not by their terms or necessarily in their effect prevent a worker from seeking or accepting other work or starting a business. However, non-solicitation agreements can satisfy the definition of non-compete clause in § 910.1 where they function to prevent a worker from seeking or accepting other work or starting a business after their employment ends. Whether a non-solicitation agreement—or a no-hire agreement or a no-business agreement, both of which were referenced by commenters, as discussed previously—meets this threshold is a fact-specific inquiry. 

Weasel words:  “It is not an unfair method of competition to enforce or attempt to enforce a non-compete clause or to make representations about a noncompete clause where a person has a good-faith basis to believe that this part 910 is inapplicable.” Not particularly helpful to give a weaselly way out. But the Court or FTC would have to determine that there was a good faith basis to believe that it fell within an exception or that the rule had been stayed by a court.

Notice required: Employers will have to send notices to everyone they have noncompetes with to advise them that the noncompete clause won't be enforced. It has to be hand-delivered or emailed/mailed. 

Existing causes of action: If you're sued for a noncompete or breached one before the effective date, the new rule doesn't apply. However, the FTC did a very nice brief on why these things shouldn't be enforced, and you should be able to use some of their analysis to argue issues like lack of a legitimate interest other than preventing competition, lack of good faith, and some other defenses.

How will this play out? I think the rule will be stayed by a red-friendly court and will be litigated. So it's unlikely it will actually go into effect this year, if at all. 

But let's say employers send out those notices and then the rule is stayed or reversed? What will happen then? Can they say never mind? Or is the noncompete void? Will employers who send the notices have to get new ones signed? I would think that they would be difficult to enforce after the notice goes out. 

One thing is for sure - employment lawyers will be plenty busy for awhile after this.

Noncompete law is very state-specific until this rule goes into effect, so if you have a noncompete agreement, talk to an employee-side employment lawyer in your state if you want to understand your rights and responsibilities.

Does Your Noncompete Agreement Violate the National Labor Relations Act?

 The NLRB General Counsel is taking the position that noncompete agreements in employment and severance agreements violates the National Labor Relations Act.

Non-compete provisions are overbroad, that is, they reasonably tend to chill employees in the exercise of Section 7 rights, when the provisions could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for based on their experience, aptitudes, and preferences as to type and location of work. Generally speaking, this denial of access to employment opportunities chills employees from engaging in Section 7 activity because: employees know that they will have greater difficulty replacing their lost income if they are discharged for exercising their statutory rights to organize and act together to improve working conditions; employees’ bargaining power is undermined in the context of lockouts, strikes, and other labor disputes; and, an employer’s former employees are unlikely to reunite at a local competitor’s workplace, and, thus be unable to leverage their prior relationships—and the communication and solidarity engendered thereby—to encourage each other to exercise their rights to improve working conditions in their new workplace.

In addition, non-compete provisions that could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting access to other employment opportunities chill employees from engaging in five specific types of activity protected under Section 7 of the Act. First, they chill employees from concertedly threatening to resign to demand better working conditions. Specifically, they discourage such threats because employees would view the threats as futile given their lack of access to other employment opportunities and because employees could reasonably fear retaliatory legal action for threatening to breach their agreements, even though such legal action would likely violate the Act. Second, they chill employees from carrying out concerted threats to resign or otherwise concertedly resigning to secure improved working conditions. Although extant Board law does not unequivocally recognize a Section 7 right of employees to concertedly resign from employment, such a right follows logically from settled Board law, Section 7 principles, and the Act’s purposes. It is also consistent with the U.S. Constitution and other federal laws. Accordingly, I will urge the Board to limit decisions inconsistent with that right to their facts or overrule them.  

Is this a magic wand that makes your noncompete go poof? No. But it gives you another weapon in your arsenal to challenge your noncompete agreement, assuming your employer is covered by the NLRA (most are). The key here to challenging noncompetes through the National Labor Relations Act is concerted activity. You'd have to be part of a group of employees that want to threaten to resign or go to a better workplace. By yourself, the challenge probably fails. 

Plus, there is no caselaw supporting this specific issue, so there's no guarantee the federal courts as currently constituted (the Supremes have been very pro-employer) would uphold this interpretation.

If you think your noncompete may violate the National Labor Relations Act, you can file a charge against employer with the NLRB within 6 months of the alleged violation, or talk to an employee-side employment lawyer in your state about your rights.

Don't Expect Noncompete Relief Until Next Year Says FTC

 Although we've been hoping that the FTC would come through on its proposed rule banning or limiting noncompete agreements, it looks like we'll have to wait. They've announced they won't be voting on the final rule until April 2024. 

That's bad news for workers. Noncompetes have been abused to suppress wages, prevent employees from looking for better jobs, create fear among employees that they will be terminated and unable to work, and force employees to work in terrible conditions. They've been used against sandwich makers and receptionists. 

That doesn't mean you have no remedies. Depending on your state law, there are defenses to noncompete agreements.

While Florida is one of the most anti-employee states in the nation, both federal and Florida antitrust law require that employers have a legitimate interest other than preventing competition in order to enforce a noncompete agreement. Absent a legitimate interest, the agreement violates antitrust laws. Some other states have additional defenses to enforcement.

When in doubt about your noncompete agreement, get some advice from an employee-side employment lawyer in your state.

How Do I Get A Copy Of My Noncompete Without Alarming Management?

 You don't have a copy of your noncompete and can't figure out how to get one without asking management, who would definitely penalize you just for asking. You want to leave but the only option you think you have would be a competitor. Or you signed a bunch of documents you didn't read when you started called stuff like Confidentiality Agreement or Bonus Agreement and now you think you might have signed a noncompete.

If you’re a regular reader of my blog, you know that I always recommend you get a copy of everything you sign. This is a good example of why. How are you supposed to know what your restrictions are if you don’t have a copy of your agreement?

But you didn’t keep a copy of your noncompete agreement, and now you have to figure out how to get a copy without alarming HR and management. There are several ways you might try. You’ll have to figure out which one works best in your company culture:

Ask to look at your personnel file: While some states have a law saying companies have to give you access to your personnel file, most don’t. There's none here in Florida. Still, sometimes employers will allow you to review your personnel file if you ask. Hopefully, the noncompete will be in there. What excuse do you give for asking? You could say you want to see what deductions you listed on your W-4, review your insurance election, or take a look at your last review as some examples of what might give you a non-alarming excuse to review the file. Of course, they could just be nice and give you a copy of the document you say you’re looking for, so this might backfire.

Ask a coworker for theirs: If you have a coworker you trust who keeps better records than you, you might ask them to share their noncompete agreement. Yours is probably similar, but if you started different years or have different jobs, the two agreements could be quite different. If you’re sure that everyone has the same agreement, this is a possibility that might work for you.

Look at court records: If your employer sues former employees for noncompete violations, then pull the case file. The coworker’s noncompetition agreement should be attached to the very first document, called something like a “Complaint.” This only works if you’re pretty sure the coworker had the same agreement as you.

Ask someone friendly in management: Sometimes, your boss or a friend in HR may be willing to get you a copy on the sly.

Ask for the agreement: I know you don’t want to tell an unfriendly supervisor or the evil HR lady you need a copy, but this is the only straightforward way to get a copy of your actual agreement. You might say you lost your copy and want to make sure you have a copy for your records (and this is completely true) or try to come up with some other excuse. Or, you can wait until you get a job offer and then ask for it. That way, you at least have a place to go if you get fired because they think you’re looking to leave.

What do you do if they refuse to give you a copy? I think it’s silly, but some companies like to hold onto the noncompete agreements employees have signed like they’re the secret recipe to KFC, but I don’t understand this. Companies should want employees to know what their post-employment restrictions are. HR folks should make sure employees keep a copy for themselves. How can they comply if they don’t know what the restrictions are? Nobody has ever been able to explain this to me.

If this happens to you, and you have a job offer or actual plans to start a business, I suggest sending them something like this: “It is my understanding that I do not have any restrictive covenants that would keep me from working for a competitor or forming my own business. If this is incorrect, please send me a copy of any and all agreements I signed or am alleged to have signed while employed by you within 72 hours from the date of this email. If I do not receive the alleged agreements by that time, I will assume I have no restrictions and will govern myself accordingly.” Obviously, this will set off alarm bells like crazy, so I don’t recommend this unless you have somewhere to go.

Sounds like lots of trouble to go through all this, huh? Next time, make sure you keep a copy of anything you sign at work, and make sure you take it home or keep it in your briefcase so they can’t grab it if you are fired. And don’t forget to read it carefully before you sign so you know and understand your post-employment restrictions. The time to negotiate is before you sign.

FTC Proposes Ban On Noncompete Agreements

 The Federal Trade Commission is proposing a complete ban on agreements banning former employees and independent contractors from going to work for competitors. Per the FTC:

FTC’s proposed rule would generally prohibit employers from using noncompete clauses. Specifically, the FTC’s new rule would make it illegal for an employer to:enter into or attempt to enter into a noncompete with a worker;
maintain a noncompete with a worker; or
represent to a worker, under certain circumstances, that the worker is subject to a noncompete.

The proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or unpaid. It would also require employers to rescind existing noncompetes and actively inform workers that they are no longer in effect.

The proposed rule would generally not apply to other types of employment restrictions, like non-disclosure agreements. However, other types of employment restrictions could be subject to the rule if they are so broad in scope that they function as noncompetes.

The FTC said that noncompetes are, "a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans."

Before you get too excited, remember that the rule hasn't been put in place yet, there will be lots of legal challenges, and there is no way Congress will do anything to support the agency. The Supremes have been all about limiting the power of federal agencies, so expect them to block the rule if it goes into place.  Also remember that nonsolicitation agreements will probably still be legal.

Still, once it goes into effect, there will be a brief period where noncompetes will not exist. So people will get jobs, and then they might have to give them up and face lawsuits if the courts reverse the ban. I recommend caution, but also will keep my fingers crossed that these agreements are finally eliminated for good.

Treasury Department Report Blasts Noncompete Agreements

 I wrote awhile back about President Biden's executive order on noncompete agreements. In it, he asked the FTC and other agencies to look into curtailing the use of noncompete and other anti-competitive agreements and practices. The Treasury Department just issued a report, presumably in an effort to comply, and it's damning in the extreme on the topic of noncompete agreements. 

Some juicy excerpts:

Firms can engage in tacit collusion by sharing wage information for different occupations, conspiring to fix wages, adopting no-poach agreements where firms agree not to hire other firms’ workers, or forcing workers to sign non-compete agreements that limit their ability to switch jobs.

Wage-setting power is also evident in the large number of workers who are subject to rules and agreements that limit their ability to switch jobs and occupations and, hence, their bargaining power. For example, a recent paper estimates that one-in-five workers is currently subject to non-compete agreements and double that number report having been bound by a non-compete agreement in the past.

Employers can also act to decrease the value of a worker’s outside options. For example, restrictive employment agreements that require workers to repay training costs if they leave the firm or non-compete agreements (both discussed in greater detail below) reduce worker power by increasing the costs of leaving the firm. Those costs are explicit in the case of training repayment programs but implicit in non-compete agreements. By preventing a worker from accepting positions well-suited to their skills, firms decrease the expected gains from a worker’s job search. 

By design, non-compete agreements limit employees’ outside options, which, in turn, weakens workers’ bargaining power and raises hiring costs for other firms. The limits are typically within a geographic area for a specific period and within a set of relatively similar occupations or industries but may be much broader. Balasubramanian (2017) models the effects of non-competes to show how this narrowing of outside options reduces employee bargaining power relative to their employer. All else equal, this leads to what they call a “lock-in” effect: lower worker mobility and longer tenure, as well as a flat or declining wage profile. Both the mitigation of the “hold-up” effect and “lock-in” effect mentioned above can reduce worker mobility. Lower worker mobility increases recruitment costs for all firms as fewer workers are seeking to switch jobs than otherwise would, absent the post-employment restrictive employment agreement. The increases in recruitment costs can lead to worse matches between employers and employees, lowering wages and aggregate productivity (Javanovic 2015).

However, the share of people who negotiate over a non-compete agreement appears to be quite small. Starr, Prescott, and Bishara (2021) find only about 10 percent of employees negotiate over their non-compete agreements. Therefore, it is unlikely that most employees demand (or receive) a compensating differential from signing a non-compete agreement. Furthermore, a worker with little bargaining power (e.g., low-income workers) or who is unaware they are bound by a non-compete (which may be more likely for less-educated workers) is unlikely to be able to secure a compensating differential in exchange for signing a non-compete agreement. To the extent that a compensating differential requires an explicit negotiation, certain workers may be less willing or able to do so—for example, Babcock and Laschever (2009) argue women are much less likely to negotiate during the hiring process. Accordingly, the share of workers whose wages increase as a result of non-compete agreements is small. While one of the main justifications for noncompete agreements (as well as other types of restrictive employment agreements) is mitigation of the “hold up” effect, there are far less restrictive means of addressing this problem. For workers with access to genuine trade secrets, there may be overlapping authority with trade secrecy laws, irrespective of the existence of a noncompete agreement.

Restrictive employment agreements, including non-compete, non-solicitation, and non-recruitment agreements, may reduce firm entry. In aggregate, this tends to lead to reduced demand and wage competition, leading to fewer appealing outside options for similarly situated workers. Samila and Sorenson (2011) find that increases in supply of venture capital funds has a stronger impact on firm start-ups, patent creation, and employment growth in states that have weaker enforcement of non-compete agreements, suggesting non-compete agreements may reduce certain types of entrepreneurial activity.

So long as the perceived probability of an employer attempting to enforce the contract is non-zero, restrictive employment agreements can create frictions. Consistent with this, Starr, Prescott, and Bishara (2020) present survey evidence that workers with non-compete clauses frequently decline job offers because of their preexisting non-compete agreement, even in states that do not enforce such agreements. Likewise, survey evidence also suggests that the incidence of non-compete clause inclusion in employment contracts is not strongly correlated with enforceability of non-compete agreements, which could suggest employers include such clauses even when they do not expect them to be enforceable. This partially occurs because people tend to be risk averse. Therefore, even in places where non-compete contracts are outlawed, the presence of unenforceable non-compete clauses can have a chilling effect on job-switching. The effects may be particularly severe for lower-wage workers, who may have limited access to legal counsel.  

Twenty-one percent of workers in the top income quintile are covered by a non-compete agreement compared to eight percent of workers in the bottom quintile of hourly wages. However, this still leaves millions of workers with minimal employer-specific training subject to non-compete agreements.

Unlike higher income workers, lower wage workers likely lack sufficient bargaining power to refuse a non-compete agreement. As a result, whereas non-compete agreements may increase top-earner wages at the expense of mobility, non-compete agreements appear to reduce both wages and mobility for lower-income earners. For example, Lipsitz and Starr (2021) find that the ban on non-compete agreements for hourly workers (who tend to be lower income) in Oregon increased overall hourly wages by 2–3 percent, with a stronger efect for female workers.

Starr, Prescott, and Bishara (2021) find that the huge number of low-skill workers subject to non-competes suggests that employers routinely apply them to workers who do not possess trade secrets or customer lists and are not given specialized training. They cite as an example a large sandwich chain, which subjected its workers to extremely broad non-competes. Though these non-competes are not likely enforceable under state law, they point out that they may have an in terrorem efect that deters employees from obtaining jobs at competing employers.

A decline in the competitiveness of labor markets lowers worker wages, may decouple wages from productivity, and likely diminishes the relative share of income that goes to workers. Moreover, actions of the firm such as requiring workers to sign non-compete agreements and limiting workers’ access to information diminishes worker mobility, implicitly reducing workers’ bargaining power relative to employers. 

These direct effects on workers’ wages, employment, and mobility have important broader negative impacts on the economy. Higher inequality likely makes it more difficult to sustain sufficient aggregate demand. Lower wages disproportionately impact women and workers of color. A large pool of low-priced labor likely weakens firm incentives to invest and improve productivity, while lower mobility diminishes productivity growth by hindering the reallocation of labor to more productive firms and industries. Non-compete agreements may prevent workers from starting their own businesses and discourage innovation. In short, a growing body of evidence suggests that declining labor market competition may stymie the drivers of U.S. economic growth. 

The use of non-compete clauses, especially among internet-based commerce firms, could be discouraging firm entry (Congressional Budget Office 2020). For instance, Marx, Strumsky, and Fleming (2009) finds that an unintended change in Michigan law boosting the enforceability of non-compete agreements led to sharp declines in the mobility of patent holders. Restricting the use of non-compete agreements and other restrictive employment agreements could allow for new firm creation, as workers at incumbent firms could leave the firm to pursue new ideas, thereby forcing incumbent firms to innovate to stay dominant. 

These are just some highlights. There's lots to unpack in this 68-page report, and I suggest you read it if you are interested. Summary: noncompetes are bad for society, bad for competition, particularly bad for low wage workers, and have the effect of suppressing wages, worker mobility, and innovation. 

And haven't I been saying this all along?

What To Expect In #Employment Law In 2022

 If you are a regular reader, you've probably noticed that I haven't done any predictions in the past few years. Because how could anything have possibly been predicted? But employment law is becoming more predictable now, and I think it's time to take a deep breath and do my Cassandra bit. Here are my predictions for 2022:

1.    More pro-employee NLRB: We've already seen this with some very pro-employee, pro-union decisions coming down regarding Amazon, Starbucks, and other unionization attempts. As the year progresses, we'll see NLRB cracking down on employer retaliation and union busting efforts. We'll also be back to seeing more pro-employee decisions on non-union "concerted activity" retaliation.

2.    EEOC will re-energize: They were cut to the bone in budget and staffing under the last administration, so it's taking a bit for them to bounce back. They'll also focus on issues like sexual orientation that got pushed aside under the last administration. I hope they'll fully staff the mediation divisions, because those folks are really terrific at settling cases.

3.    Supremes go anti-employee: Unfortunately, while the agencies will be more pro-employee, the courts are going to take a sharp anti-employee turn. Look for really pro-management decisions on the federal level.

4.    Paralysis on noncompetes: Even though President Biden issued an executive order asking the federal agencies to focus on noncompetes, there's little the agencies can do without legislation. Congress won't do anything. Neither will the Florida legislature. Maybe some pro-employee states will limit or ban noncompetes. Some have done it already. Will more follow?

5.    Sexual harassment crackdown: With President Biden's order criminalizing sexual harassment in the military, the issue will get more attention. Where the military goes, usually goes the rest of the nation, so we should see some more crackdown on sexual harassers.

6.    COVID, COVID, COVID: The virus will continue to be an issue. OSHA will continue to try to get employers to maintain safe workplaces. The Supremes and the right wing will continue to fight. Florida will continue to be the Wild West. 

7.    More unions: As NLRB becomes more employee-friendly, we'll see more unionization attempts. Once Amazon is forced to allow a union (and it will happen this year), employees of other workplaces previously thought impossible will begin efforts to unionize. Some will succeed. The Great Resignation has made employees more conscious of working conditions. They'll continue to fight to be treated fairly. Union busters will make a fortune this year as employers try to fight back.

8.    Disability discrimination: Now that employees realize that it's easy to work remotely, and now that employers want employees back in the office, we'll see more disability discrimination cases. Employees who seek remote work as a reasonable accommodation will face resistance, but employers will lose the argument that granting the accommodation is a hardship. After all, they had a year or more of remote work very successfully. 

9.    Zoom: I don't know about you, but I love Zoom. Having to do a 2 - 3 hour round trip for a 5 minute hearing is a huge waste of resources. Judges like it because they have more control. For non-evidentiary hearings, Zoom will remain in many courtrooms. We'll also continue to see more Zoom depositions and mediations, which work very well on that platform. This will make attendance by employees much less onerous. They won't miss as much work, for one. In employment law, it will be a huge benefit. I find that employees are way more likely to settle in a Zoom mediation where they feel comfortable and more relaxed. Employers will also continue to utlize Zoom or similar platforms for meetings rather than having employees commute from remote locations. 

10.    Anti-employee laws: We'll see some extreme anti-employee laws in red states as the right wing pushes to be more and more extreme. Expect some laws attacking LGBT folks, abortion, marijuana, protests, and free speech. Some of these laws will give employers extra protection against lawsuits for terminating employees for their activities outside of work.

Well, that's about all I think I can predict for now. Let's see how I do. It's still crazy out there, but hopefully things will get a bit more normal as 2022 progresses.

Biden Moves To Curtail Noncompete Agreements, But They Aren't Illegal (Yet)

 I've had some clients get very excited about the news that President Biden's new executive order seeks to curtail noncompete agreements. And it is exciting. It just isn't a magic wand that made noncompete agreements suddenly disappear. Here's what it says about noncompetes:

Section 1. Policy.

A fair, open, and competitive marketplace has long been a cornerstone of the American economy, while excessive market concentration threatens basic economic liberties, democratic accountability, and the welfare of workers, farmers, small businesses, startups, and consumers.

The American promise of a broad and sustained prosperity depends on an open and competitive economy. For workers, a competitive marketplace creates more high-quality jobs and the economic freedom to switch jobs or negotiate a higher wage. For small businesses and farmers, it creates more choices among suppliers and major buyers, leading to more take-home income, which they can reinvest in their enterprises. For entrepreneurs, it provides space to experiment, innovate, and pursue the new ideas that have for centuries powered the American economy and improved our quality of life. And for consumers, it means more choices, better service, and lower prices.

Robust competition is critical to preserving America’s role as the world’s leading economy.Consolidation has increased the power of corporate employers, making it harder for workers to bargain for higher wages and better work conditions. Powerful companies require workers to sign non-compete agreements that restrict their ability to change jobs. And, while many occupational licenses are critical to increasing wages for workers and especially workers of color, some overly restrictive occupational licensing requirements can impede workers’ ability to find jobs and to move between States.

. . . 

Sec. 5. Further Agency Responsibilities.


(a) The heads of all agencies shall consider using their authorities to further the policies set forth in section 1 of this order, with particular attention to:

(i) the influence of any of their respective regulations, particularly any licensing regulations, on concentration and competition in the industries under their jurisdiction; and(f) To better protect workers from wage collusion, the Attorney General and the Chair of the FTC are encouraged to consider whether to revise the Antitrust Guidance for Human Resource Professionals of October 2016.

. . .

(g) To address agreements that may unduly limit workers’ ability to change jobs, the Chair of the FTC is encouraged to consider working with the rest of the Commission to exercise the FTC’s statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.

As you can see, the President is asking the FTC and other agencies to look into curtailing the use of noncompete and other anti-competitive agreements and practices. But he didn't make them disappear with the stroke of a pen. First, there will be new agency regulations. Then there will be litigation, because noncompetes are generally governed by state law, which doesn't just go away. So, for now, assume that your noncompete agreement will be vigorously enforced by your employer and govern yourself accordingly. 

Yes, there are defenses to noncompete agreements. The one thing they are not allowed to be used for is preventing competition (yes, I know that's what they're called and what they're actually being used for, but this would violate antitrust laws). Employers have to have legitimate reasons other than preventing competition, like protecting trade secrets, customer goodwill, specialized training not generally available, etc. if they want to enforce noncompetes. The laws vary by state, so talk to a lawyer in your state if you have questions about a noncompete agreement.

More States Fight Back On Low Wage and Surprise Noncompetes

Once legislators woke up to the fact that employers were running amok with noncompete agreements, imposing them on sandwich makers and other low-level employees, some states took action. Here are some new state laws that limit noncompete agreements:

• Maine: The Act to Promote Keeping Workers in Maine, which went into effect this week, bans no-poach or non-solicitation agreements with other employers; prohibits noncompetes for employees earning at or below 400% of the federal poverty level, mandates pre-employment disclosure of non-compete agreements; says non-competes can't take effect until after one year after the employee is hired or 6 months after the employee signs the agreement, whichever is later; and imposes $5000+ fines for violations.
• New Hampshire: New Hampshire already required employers to provide a copy of a required non-compete agreement to potential employees before the employee accepted any offer of employment. Starting September 8, NH employers can't force low-wage employees, meaning “an employee who earns an hourly rate less than or equal to 200 percent of the federal minimum wage,” to sign noncompetes.
• Rhode Island: The Rhode Island Noncompetition Agreement Act, signed in July, and going into effect next year, will bar employers from entering into or enforcing noncompetes with hourly employees, undergraduate or graduate student interns, employees 18 or younger, and low wage employees (those employees whose annual earnings are not more than 250% of the federal poverty level).

Michigan has a bill working its way through the legislature limiting noncompetes. So do Vermont and Pennsylvania.

If you think sandwich makers and other low wage employees shouldn't be prohibited from moving on to better paying jobs, and that employers shouldn't be able to surprise new employees with noncompetes after they start, tell your state legislators to get with it and join the pro-employee movement banning low wage and surprise noncompetes.

 

Some Florida Physician Noncompetes Are Invalid

For the first time in many years, the Florida legislature actually did something pro-employee. Well, at least, pro-doctor. Here's the new law:

542.336 Invalid restrictive covenants.—A restrictive covenant entered into with a physician who is licensed under chapter 458 or chapter 459 and who practices a medical specialty in a county wherein one entity employs or contracts with, either directly or through related or affiliated entities, all physicians who practice such specialty in that county is not supported by a legitimate business interest. The Legislature finds that such covenants restrict patient access to physicians, increase costs, and are void and unenforceable under current law. Such restrictive covenants shall remain void and unenforceable for 3 years after the date on which a second entity that employs or contracts with, either directly or through related or affiliated entities, one or more physicians who practice such specialty begins offering such specialty services in that county.

For doctors whose employer has a monopoly on an entire specialty practice area in a county, they will see some relief from noncompetes with this new law. It probably only helps those in rural counties, but it's a baby step in the right direction.

Of course there's a lawsuit. 21st Century Oncology has filed a lawsuit to stop the law. They lost their bid for an emergency injunction, but the suit is still pending.

I'll keep you posted if anything changes, but for the moment this is the law in Florida.

Enjoy Your Summer Internship - You May Never Work In Your Field Again

In a new low for management side, the Wall Street Journal exposed the ugly practice of intern noncompetes. That's right. Intern. Noncompetes.

Let me get this straight. A college or high school student goes to work for little or no pay, and they are handed a bunch of papers to sign. They're so thrilled at the opportunity to work for this company, they don't read. They just sign. They never get a copy of what they signed.

Surprise! After they graduate, they get their dream job in the industry, and along comes the nastygram. "Dear John, You aren't allowed to work at your dream job because you signed a noncompete. You can't work in your field for two more years. By then, all the entry level jobs will be taken. Enjoy your work at McDonald's flipping burgers." And the letter to John's employer: "Dear New Employer: You hired John. He signed this noncompete. If you don't fire John, we'll sue you, your mother, your dog, and everyone you ever met."

So John is fired, and he's fighting a big corporation from the position of being unemployed. The new employer now has a bad taste in its mouth for John, so he's lost that opportunity. He's out of his field and unable to fight. Lesson: read everything before you sign, and keep copies. If you can't live with it, don't sign.

Yes, there are defenses to noncompetes. But to fight them, you have to be able to afford an attorney and court costs. Most people, especially recent college grads, can't afford that.

My state's Senator, Marco Rubio (with whom I almost never agree, except now) has proposed a bill that would prohibit noncompetes for hourly employees. That would be a great start.  Democrats have repeatedly tried and failed to limit noncompetes over the years, so maybe a Republican can get his colleagues to listen.

Some states, like Massachusetts, have also banned noncompetes for hourly and low wage employees. Illinois banned noncompetes for low wage workers. California, Oklahoma and North Dakota ban most noncompetes. There are lots of bills pending that would address problems with noncompetes in various states.

I think luring interns in with the promise of job opportunity and college credit, then making them sign away their right to work in their field, is unconscionable. If you agree, support any elected official's efforts to limit or ban noncompetes.  And vote with your money: don't do business with companies that have obnoxious noncompetes for interns and low wage employees.

Marco Rubio Introduces Anti-Noncompete Bill In Congress

In a possible sign of the apocalypse, I actually agree with something my state's Senator, Sen. Marco Rubio, has done. I'm stunned but pleasantly surprised that he has introduced something to help working people, despite being the senator for very anti-employee Florida.

Senator Rubio has introduced the Freedom To Compete Act, a bill that would prohibit employers from forcing exempt workers from entering into noncompete agreements. That means no hourly employees would be required to sign terrible agreements prohibiting them from switching jobs for higher wages and better working conditions. No more noncompete agreements for sandwich makers.

The bill, which you can read in its entirety here, has some interesting features:

• It's an amendment to the Fair Labor Standards Act.
• It voids all noncompete agreements for non-exempt employees and prohibits employers from entering into, extending or renewing noncompete agreements.
• The only employees it does not apply to are "any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of outside salesman."
• No jail time for violations, but "legal and equitable relief."
• The Department of Labor can enforce.

It doesn't have any penalties for violations, so employees would have to show damages. Plus most employers just send the nasty-gram to new or potential employers and threaten to sue them, their mother and their dog unless they fire the employee, so the employee is fighting from the position of being unemployed. Most employees can't afford to fight noncompetes. This might help some if they can actually get DOL to assist with enforcement.

Is it perfect? No. Is it a good start? Heck yeah.

Since it was introduced by a Republican, I'd give it slightly better than a snowball's chance of passing. Other attempts by Democrats have failed miserably, so it's good to see something happening on the other side to curtail abusive noncompetes. One Democratic attempt last year would have banned almost all noncompetes. Al Franken's bill after the sandwich noncompete scandal would have banned noncompetes for employees making $15/hour or less and require employers to disclose that noncompetes would be required as a condition of taking a job. This one would actually help more employees than Sen. Franken's bill, so yay.

If you think a Republican doing something pro-employee is a good thing, call and write your senators to ask them to support Sen. Rubio's bill, and tell @marcorubio thanks. Let's encourage pro-employee behavior!

Props to my Senator, Sen. Marco Rubio, for trying to help U.S. working people!

Can My Employer Enforce A Noncompete Agreement I Never Signed?

Many times, employees ask me if their employer can enforce a noncompete or nonsolicitation agreement they never signed. The short answer is no, at least in Florida. The Florida noncompete statute says:

(1) Notwithstanding s. 542.18 and subsection (2), enforcement of contracts that restrict or prohibit competition during or after the term of restrictive covenants, so long as such contracts are reasonable in time, area, and line of business, is not prohibited. In any action concerning enforcement of a restrictive covenant:
(a) A court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought.

So that's that, right? End of post.

Nah. It isn't that simple. Because probably 90% of the people who swear up and down to me that they never signed one, actually did. If you're the kind of person who signs that stack of paperwork HR put in front of you on your first day without reading, you very likely signed a noncompete or nonsolicitation agreement.

Plus, the noncompete provision might have been hidden in something that seemed innocuous like a "confidentiality agreement," "bonus agreement," or "stock option agreement." You wouldn't think something with those titles would restrict your ability to work, but trust me, they do. You need to read every single thing your employer asks you to sign, before you sign it, and keep a copy.

You'll notice that the statute doesn't require the employer to sign. Even if there's a blank signature line for the employer to sign, that isn't necessarily a magic wand to get you out of the agreement. Odds are, the employer has a copy they signed after you sent your signed version back. Or they'll sign it speedy quick before they sue.

The other issue is electronic signatures. Many employers have employees do their initial paperwork online, so they click something and it says they've signed. That doesn't necessarily get you out of it either. Florida has a whole set of laws on electronic signatures. Bottom line, "Unless otherwise provided by law, an electronic signature may be used to sign a writing and shall have the same force and effect as a written signature." Florida has also passed the Uniform Electronic Transaction Act," which allows electronic transactions, with some exceptions. So maybe if the company messed up the electronic signature or you didn't actually check the box to sign, you have a defense.

In general, if you didn't sign a noncompete or nonsolicitation agreement in Florida, it can't be enforced. But odds are, you may well have signed and not even realized it. I'll say it again: You need to read every single thing your employer asks you to sign, before you sign it, and keep a copy.

10 Workplace Rights You Think you Have – But Still Don’t

So I received this email:

Ms. Ballman; 

I happened to come across your article from 2011 regarding 10 Workplace Rights You Think you Have – But Don’t. As both an attorney and a HR/Payroll consultant, your article is either outdated, specific to Florida, or just completely inaccurate. I would urge you to do your research and correct the artcle. If you would be open to discuss the areas of your article that inaccurate, I’d love to provide your details, however, I’m not going to waste my time (or yours) if you don’t care. As it stands, your article provides incorrect information and extreme disservice to employees in general. 

Best Regards,
(name omitted)

First of all, wow, how rude! Is that any way to approach someone you've never met? Yikes! It was so bizarre I thought I was being attacked by a Russian bot or something. Still, I decided to take it seriously. My initial reaction was that a 7-year-old article might well be out of date. So I reviewed it and, sure enough, it's still both accurate and timely. When I asked my emailer for specifics on what they found to be incorrect, their response was, "I’ll just let you look like you don’t know what you are talking  about, since it’s obvious you don’t care." Well, I do care, even though I'm still not sure whether I'm dealing with a Russian bot.

Anyhow, bot or not, I'm posting an updated version.

As an employment lawyer who has represented employees for 32 years, I find that everyone thinks they already know their rights. After years of watching legal dramas and courtroom reality TV, Americans have absorbed lots of legal information. Unfortunately, most of it is wrong. Before you mouth off to your boss about your rights, I thought I'd share with you the top 10 laws most employees think exist- that don't.

1. Wrongful Termination

Most American workers think employers must have a reason to fire you. Surely your employer can’t just be arbitrary and unfair. Surely they can’t just wake up in a bad mood and fire you because they didn’t like your shirt. And there’s the rub. Because, in every state but Montana, your employer can fire you for any reason or no reason at all unless you have a contract saying otherwise. In most states, they don’t even have to give a reason.

But that’s not right, you say. There’s a law against wrongful termination. There must be. Well, there should be, but there isn’t. What we have instead, in 49 states, is at-will employment. At-will employment is that nasty doctrine that says employers can fire at-will, for any reason or for no reason.

Oh, sure, most states recognize some exceptions to the at-will doctrine (my home state of Florida recognizes zero exceptions). Most states find that a termination that is against public policy, such as being fired for refusing to violate a law, reporting a legal violation, doing something in the public interest like jury duty, or exercising a legal right like making a worker’s compensation claim, is unlawful. Another exception a majority of states recognize is an implied contract, which sometimes allows a court to find that a handbook or employer policy is a legal contract. A few states hold that employers owe employees an implied covenant of good faith and fair dealing, but most let employers be as arbitrary as they want to be.

Other protections employees have in the 49 at-will states are: contracts, whether individual or union, saying they can only be fired for cause; discrimination laws; whistleblower laws; the Family and Medical Leave Act; and state and federal employment laws.

But my point is this: if a majority of Americans think employers must have good cause to fire you, why isn’t there a law? Why haven’t legislators who are supposed to represent workers’ interests passed the number one legal protection employees think they have? Legislatures could pass a law like Montana’s Wrongful Discharge From Employment Act of 1987, which lets employees terminated without good cause sue for up to 4 years of lost wages.

We, as taxpayers, are footing the bill for employers who make arbitrary employment decisions. Why not make employers who fire employees without just cause pay for their arbitrariness? Why not at least penalize arbitrary employers through the unemployment compensation system. Why not lift the maximum rate employers can be charged to these arbitrary employers? Why skew the system to punish employees but not employers?

By continuing to allow arbitrary firings without consequences to employers, we end up forcing the unemployed onto food stamps, welfare, and other taxpayer-supported benefits. And small business owners like me end up paying for these arbitrary employers by having higher unemployment compensation tax rates.

2. Right To See Your File

You probably don't have this right, so don't go stomping into HR and making demands. No federal law requires private employers to allow employees to inspect or copy their own personnel files. Only some states require employers to allow you to look at your file and even fewer require your employer to allow you to copy items in your file. Many times, the only way you'll find out what's in your file is if you sue and you get it with a Request for Production, or if you subpoena it in unemployment or other proceedings.

3. Breaks

No federal law requires employers to offer any work breaks for anything, even meals. Some state laws do require work breaks, but it's not a majority. No federal law even requires bathroom breaks, but it's probably a health issue, so OSHA might protect you if your employer denies bathroom breaks. If you're a nursing mother, you're entitled to an unpaid break to express breast milk. Some states also offer protection for nursing moms taking breaks. Lots of people get fired for insisting on breaks they're not entitled to. Don't do it.

4. Hostile Environment

A hostile environment is not illegal. Workplace harassment is not illegal. Bullying is not illegal in any state except, oddly enough, Tennessee, and that's only for government employees. If you write a long email to HR or your boss complaining that you are being "harassed," or, you're "in a hostile work environment," you aren't protected against retaliation. While harassment due to race, age, sex, national origin, religion, disability, or another legally-protected category is illegal, just plain "harassment" is not. So reporting it that way doesn't protect you against retaliation. When I ask why people didn't report that they were being treated differently than coworkers of a different race, sex, etc. they usually say something like, "I didn't want to go there." Well, if you'd gone there, firing you for your complaint would have been illegal. But firing you for saying you were harassed or bullied: not illegal.

Appropriate remedies may be to discipline or warn the harasser, to move the harasser, under some circumstances to move the victim, to do training, or in extreme cases, to terminate the harasser. But they don’t have to take any action at all. They only have a duty to maintain a safe workplace. You might still have to work with the harasser. Don't say you refuse to work with the harasser. You might be fired for refusing to work. If you return and are retaliated against or continue to be harassed, report it again.  If the employer allows retaliation or continued harassment, that is the time to get an attorney involved.

5. First Amendment In Private Workplaces

Only government employees have free speech protections, and those are very limited. Otherwise, you can be fired in most states for your speech (including political speech) in the workplace or outside the workplace. You can't be fired for speaking on behalf of coworkers in order to improve work conditions or for objecting to something illegal, but be very careful to make sure you're protected before you speak out.

If you're complaining about working conditions, reporting discrimination, objecting to not being paid overtime, or reporting illegal activity, you are likely legally protected in every state. 

In some states, employee speech about politics is protected. In Florida, it's a felony to "discharge or threaten to discharge any employee in his or her service for voting or not voting in any election, state, county, or municipal, for any candidate or measure submitted to a vote of the people." California, Colorado, New York, North Dakota and Louisiana say it's illegal to retaliate against an employee for their off-duty participation in politics or political campaigns. Here in Broward County, it's illegal to fire employees based upon political affiliation. If you work for government, there's the good old First Amendment to protect you. Plus, the Civil Service Reform Act of 1978 prohibits political affiliation/activity discrimination against federal employees. 

Speech about religion, women’s (or men’s) rights, and unionization is almost always protected.

Otherwise, you don't have free speech rights at work. Be very sure you have legal protection before speaking out.

6. Privacy At Work

Your boss can read your work e-mails and monitor your Internet usage at work. If your employer is going to listen into or record phone calls, there are some legal restrictions. You also have privacy rights in your medical information. There is no federal law protecting your social security number, but California, Texas and New York do offer limited protection against employers displaying your number.

The Electronic Communications Privacy Act of 1986 specifically says your company can't intercept your emails. The problem is, it has exceptions for consent. That means if your company has a policy on email interception or had you sign an agreement, a handbook, or anything else they managed to slip in front of you agreeing that email at work belongs to them, they skate. The law also says it's legal to monitor your email if the company is the email provider or if they monitor your email in the ordinary course of business, such as for customer service.

In other words, there are so many loopholes that your company probably fits into one. Until the courts say otherwise or Congress tightens this law, it likely doesn't help you.

Some states have a tort called "intrusion on seclusion" or "invasion of privacy." There are some protections against highly offensive conduct that's intrusive. The problem is, you probably won't be able to prove you had any expectation of privacy in your emails or other activities at work.

7. Right To Work

I hear all the time, "But this is a right to work state!" Usually while I'm reviewing a non-compete agreement. Right to work doesn't mean your employer can't restrict your ability to work for competitors after you leave. What it means is they can't make you join a union in order to work there. Some states, but not all, are right to work states. If your supervisor tells you that signing a non-compete agreement is meaningless or that it won't be enforced, they are lying to you.

8. Retaliation

There is no law prohibiting an employer from retaliating against you for reporting or objecting to policy violations, ethical violations, bullying, or the fact that your boss is a jerk. If you do something that puts you in a legally protected category, you may be protected from retaliation. Examples would be objecting to discrimination, making a worker's comp claim, or taking Family and Medical Leave. If you're reporting something illegal the company is doing, you may be a protected whistleblower, but you'd better research the specific whistleblower laws that apply, because there are many hoops to jump through on some whistleblower cases.

If you complained about working conditions on behalf of yourself and coworkers, you may be protected against retaliation under the The National Labor Relations Act (NLRA), which protects employees who engage in concerted activity to improve working conditions.

For more about when retaliation may be illegal, check out my post on that topic.

9. Discrimination Because Your Boss Doesn't Like You

If your boss is discriminating against you for being you, that isn't illegal. Favoritism, nepotism, and being obnoxious are generally not illegal. Discrimination based on age, pregnancy, race, sex, religion, national origin, disability, color and genetic information are illegal. In some states, other categories such as sexual orientation, gender identity, marital status, and being a domestic violence victim are protected.

10. Suing the Boss

As much as it may be satisfying to sue your ex-boss personally, you probably can't. Federal and many state discrimination laws, Family and Medical Leave Act (in some states the courts disagree on this), and most other employment laws simply don't allow it. One major exception is wage and hour violations. Some state discrimination laws do hold supervisors liable for violations. But what's the point? Unless they're rich, you probably won't be able to collect anyhow.
Well that's wrong. What can I do about it?

Since most people think these laws exist, maybe it's probably high time for them to actually be passed. E-mail your congressperson and state representative now and complain if you don't like the fact that you're not protected. Here's how to find out how to contact your representative in Congress:
https://www.commoncause.org/find-your-representative

Here's a website with contact information for elected officials at the state and federal level:
http://www.usa.gov/Contact/Elected.shtml

You do have rights. Among them is the right to vote. If you don't like the law, exercise it and tell your representatives you demand some legal protections. In the meantime, don't get yourself fired by getting your legal advice from television. When in doubt, contact an employment lawyer in your state about your legal rights at work.

Massachusetts Limits Noncompetes - Are You Listening Florida?

Florida has a real chance to turn the governorship and some legislative seats blue this year. Because Florida is one of the worst states for employees in the nation, a change in leadership means an opportunity to change some of the worst anti-employee laws. And in my opinion the worst of the anti-employee Florida laws is our noncompete law.

Massachusetts, after years of wrangling, finally passed a noncompete law that protects its workers against oppressive agreements amounting to virtual indentured servitude. The law went into effect October 1.

Here are some of the provisions of the Massachusetts law that could and should be adopted in Florida:

• No noncompetes for hourly employees
• No noncompetes for interns
• No enforcement of noncompetes for employees fired without cause or laid off
• No noncompetes for minors
• Continued employment alone is not consideration for a noncompete
• Noncompetes can't last more than a year, with the exception of an instance where an employee takes trade secrets
• Employers have to pay at least 50% of wages for the length of the noncompete period

These are very reasonable restrictions on noncompetes that simply don't exist under the anti-employee Florida law. What are some other restrictions that might be reasonable for noncompetes in Florida that don't exist now?

• Make employers give advance notice before the employee accepts the job. No surprises.
• Delete the (in my opinion unconstitutional) provision that courts may consider hardship on employers but not hardship on employees. Follow the states that consider employee hardship as a defense.
• Put severe restrictions on the level of employees that can be tied to noncompetes.

Noncompetes are bad for economic development, bad for wages, and bad for employees. If you think Florida should follow Massachusetts and other states in limiting abusive noncompete agreements, tell your candidates and vote wisely.

Senate Democrats Seek To Ban Noncompetes

It won't pass, but a group of Democrats in the U.S. Senate have proposed a bill that would ban noncompete agreements. The Workforce Mobility Act would prohibit the use of non-compete agreements and require employers to notify employees that these agreements are illegal. It would also allow the U.S. Department of Labor to enforce the ban with fines on the employer.

Here are the key provisions:

3. Presumption of illegality of covenants not to compete in employment contractsA covenant not to compete contained in an employment contract made between an employer and an employee is anticompetitive and violates the antitrust laws unless the employer establishes by a preponderance of the evidence that the covenant does not have an anticompetitive effect or that the pro-competitive effects outweigh the anticompetitive harm.
4. Private right of action
(a) In general
Any person who fails to comply with section 2 shall be liable to any individual in an amount equal to the sum of—
(1) any actual damages sustained by the individual as a result of the failure;
(2) such amount of punitive damages as the court may allow; and
(3) in the case of any successful action to enforce any liability under this subsection, the costs of the action together with reasonable attorney’s fees as determined by the court.
(b)Venue
Any person may bring a civil action under subsection (a) in any appropriate district court of the United States.
5. Trade secretsNothing in this Act shall preclude an employer from entering into an agreement with an employee to not share any information (including after the employee is no longer employed by the employer) regarding the employer or the employment that is a trade secret as defined in section 1839 of title 18 of the United States Code.

It's an excellent bill, but it will take a blue wave in November to get it passed, and it will be vetoed if it does pass. Still, it's a start. I can dream, can't I?

Vote Best. 

Employer Agreeing Not To Poach Competitor's Employees? That's A Jailing

The Department of Justice's Antitrust Division is serious about going after employers who agree not to poach a competitor's employees. So serious, that they announced in 2016 they would start criminally prosecuting violators, and they recently announced some prosecutions are imminent. In a joint publication with the Federal Trade Commission titled Antitrust Guidance for Human Resource Professionals, the DOJ said this about no-poach agreements (these are my favorite excerpts):

From an antitrust perspective, firms that compete to hire or retain employees are competitors in the employment marketplace, regardless of whether the firms make the same products or compete to provide the same services. It is unlawful for competitors to expressly or implicitly agree not to compete with one another, even if they are motivated by a desire to reduce costs.  

Violations of the antitrust laws can have severe consequences. Depending on the facts of the case, the DOJ could bring a criminal prosecution against individuals, the company, or both. And both federal antitrust agencies could bring civil enforcement actions. In addition, if an employee or another private party were injured by an illegal agreement among potential employers, that party could bring a civil lawsuit for treble damages (i.e., three times the damages the party actually suffered).  

An individual likely is breaking the antitrust laws if he or she:  

• agrees with individual(s) at another company about employee salary or other terms of compensation, either at a specific level or within a range (so-called wage-fixing agreements), or 
• agrees with individual(s) at another company to refuse to solicit or hire that other company’s employees (so-called “no poaching” agreements). 

Naked wage-fixing or no-poaching agreements among employers, whether entered into directly or through a third-party intermediary, are per se illegal under the antitrust laws. That means that if the agreement is separate from or not reasonably necessary to a larger legitimate collaboration between the employers, the agreement is deemed illegal without any inquiry into its competitive effects.  

Going forward, the DOJ intends to proceed criminally against naked wagefixing or no-poaching agreements. These types of agreements eliminate competition in the same irredeemable way as agreements to fix product prices or allocate customers, which have traditionally been criminally investigated and prosecuted as hardcore cartel conduct. Accordingly, the DOJ will criminally investigate allegations that employers have agreed among themselves on employee compensation or not to solicit or hire each others’ employees. And if that investigation uncovers a naked wage-fixing or nopoaching agreement, the DOJ may, in the exercise of its prosecutorial discretion, bring criminal, felony charges against the culpable participants in the agreement, including both individuals and companies. 

Sharing information with competitors about terms and conditions of employment can also run afoul of the antitrust laws. Even if an individual does not agree explicitly to fix compensation or other terms of employment, exchanging competitively sensitive information could serve as evidence of an implicit illegal agreement. While agreements to share information are not per se illegal and therefore not prosecuted criminally, they may be subject to civil antitrust liability when they have, or are likely to have, an anticompetitive effect. 

Additionally, merely inviting a competitor to enter into an illegal agreement may be an antitrust violation – even if the invitation does not result in an agreement to fix wages or otherwise limit competition.  

Reports can be made to the Division through the Citizen Complaint Center by e-mail (antitrust.complaints@usdoj.gov), phone (1-888-647-3258, toll free in the U.S. and Canada, or 202-307-2040), or mail (Citizen Complaint Center, 950 Pennsylvania Avenue, NW, Room 3322, Washington, DC 20530).  

Reports can be made to the FTC through the Bureau of Competition’s Office of Policy and Coordination by email (antitrust@ftc.gov), phone (202-326- 3300), or mail (Office of Policy and Coordination, Room CC-5422, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580). 

In my opinion, this not only means that your employer cannot have a gentleman's agreement with a competitor not to hire each other's employees, but that such an agreement is prohibited even when it is done to settle a noncompete lawsuit involving a noncompete agreement of an employee.

If your employer is breaking the law, don't participate in those antitrust violations. You could land in jail. Instead, report them to the Department of Justice or the FTC. If you are the victim of a no-poach arrangement, contact an employee-side employment lawyer in your state.