Workforce Bulletin

As featured in #WorkforceWednesday: This week, on our Spilling Secrets podcast series, our panelists connect the enchantment of Harry Potter with the intricacies of trade secrets and restrictive covenants:

Prepare to be spellbound this Halloween as we cast a magical twist on the realm of trade secrets and restrictive covenants! Whether you're a Gryffindor at heart or more of a Slytherin, there's something for every magical mind seeking to safeguard their organization’s trade secrets.

Epstein Becker Green attorneys A. Millie Warner, Jill K. Bigler, and Aime Dempsey team up with Kristen O’Connor—Senior Assistant General Counsel, Employment at Marsh & McLennan Companies—to wave their legal wands over topics such as Professor Snape’s secret potion book, Hermione’s clever jinxes, and much more.

Retail employers in New York State will have to face new requirements beginning on March 4, 2025, as a result of the recent enactment of the State’s Retail Worker Safety Act (“Act”). The Act will impose the State’s latest employment obligations on retail employers, mandating violence prevention training and precautionary workplace measures. Set to become effective about a year after California enacted similar legislation related to employee harassment and violence prevention in 2024, this is yet another state law that aims to ensure safer working environments for retail workers. As many retailers’ busiest season of the year approaches, they will also need to take time to prepare for compliance with the Act’s requirements.

On October 3, 2024, the United States District Court for the District of Columbia’s Opinion and Order in Mark C. Savignac and Julia Sheketoff v. Jones Day, et al., 19-cv-02443-RDM, addressed Title VII’s “participation clause,” in granting in part and denying in part, the law firm’s motion for summary judgment.

The court further denied plaintiff’s cross-motion for summary judgment. Plaintiffs, a married couple who were both formerly employed as attorneys (she resigned in 2018, he was terminated in 2019), alleged federal and state discrimination and retaliation claims based on their objections to Jones Day’s unequal parental leave policies. In the latter part of the opinion, the Court analyzed whether Savignac engaged in protected activity under the participation clause of Title VII of the Civil Rights Act of 1964 (“Title VII”).

In addition to prohibiting discrimination, Title VII’s provisions protect a covered individual from employer retaliation when the individual participates in an investigation or opposes covered unlawful conduct. These provisions—commonly referred to as the “participation clause” and “opposition clause”—are intended to encourage employees to report, and employers to address, discrimination in the workplace. 

As featured in #WorkforceWednesday®: This week, we’re examining the final mental health parity rules, a National Labor Relations Board (NLRB) memo on restrictive covenant limitations, and New York State’s recently enacted workplace violence prevention law.

In Guthrie v. Rainbow Fencing Inc., 113 F.4^th 300 (2d Cir. 2024), the Second Circuit weighed in on a brewing dispute among New York district courts as to whether (and how) a plaintiff’s allegations may establish Article III standing to pursue wage notice or wage statement claims under New York’s Wage Theft Prevention Act (“WTPA”) in federal court. 

Basic Requirements of the WTPA

The WTPA requires covered businesses to provide employees with both: (1) a notice, at the time of hiring, outlining their rate of pay, allowances, certain healthcare benefits, among other things; and (2) wage statements, each time wages are paid, describing the calculation of regular and overtime pay, along with other related information regarding pay deductions or allowances.

Even minor compliance errors with these statutory requirements can expose businesses to liability.  Recoverable damages for an individual plaintiff’s wage notice and wage statement claims are capped at a combined total of $10,000; however, when asserted on behalf of a large putative class, WTPA damages can potentially eclipse any claims for alleged underpayments, which will create significant potential exposure for businesses.

On September 24, 2024, the U.S. Department of Labor (“DOL”), collaborating with the Partnership on Employment & Accessible Technology (“PEAT”), a non-governmental organization the DOL funds and supports, announced the publication of the “AI & Inclusive Hiring Framework,” (“the DOL’s Framework”). The DOL’s Framework, created in response to the Biden-Harris Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, helps employers create and maintain non-discriminatory artificial intelligence (“AI”) hiring procedures for job seekers with disabilities. (For more information on the Biden-Harris Executive Order, see our Workforce Bulletin.)

Establishing these procedures has become a top priority for employers as nearly 1 in 4 organizations have implemented AI tools in human resource departments, according to new research from SHRM.

AI-powered recruitment and selection tools can streamline the hiring process by identifying potential candidates or screening applicant resumes, but employers must ensure their AI hiring tools do not intentionally or unintentionally perpetuate discriminatory practices or create barriers for job seekers with disabilities. Employers may rely on the DOL’s Framework as a useful starting point when implementing AI hiring tools.  Employers that have already implemented such tools should review the DOL’s Framework to ensure their practices do not create unwanted liability.

National Labor Relations Board (“Board”) General Counsel Jennifer Abruzzo (“Abruzzo”) issued a General Counsel Memo (Memo GC 25-01) last week signaling that employers could face civil prosecution and significant monetary remedies for using non-compete and so-called “stay-or-pay” provisions in agreements with their employees.The new memo, issued on October 7, 2024, builds on Abruzzo’s earlier General Counsel Memo issued in May 2023, where, as we reported, she outlined her belief that nearly all post-employment non-competes violate employees’ rights under the National Labor Relations Act (the “Act”).

Since Abruzzo’s May 2023 memo, employers have witnessed a number of significant developments in this space, including the Federal Trade Commission’s (“FTC”) issuance of a rule in April 2024 banning the use of most non-competes and a subsequent decision by a Texas federal judge blocking that FTC rule. In June 2024, an NLRB Administrative Law Judge issued a ruling in a case involving an Indiana HVAC company finding that non-competes and non-solicitation clauses violate the Act, a decision currently being appealed to the Board.

In her October 7, 2024 memo, Abruzzo again urges the Board to find non-competes with all employees who are subject to the Act’s jurisdiction (nonmanagerial and nonsupervisory employees) to violate the Act except in a few limited circumstances, arguing that such provisions are frequently “self-enforcing” and deter employee mobility. She also advocates for “make whole” remedies where employers are found to have continued to maintain unlawful non-competes. Specifically, the memo argues that merely voiding such provisions is insufficient and that employees should be afforded the right to seek compensatory relief for the “ill effects” that flow from complying with “unlawful non-compete provisions.”

As featured in #WorkforceWednesday®: This week, we’re examining how recent employer-initiated challenges to the National Labor Relations Board’s (NLRB’s) structure have arisen due to the agency’s broad interpretation of its enforcement authority, leading to significant legal obstacles.

The NLRB is facing significant legal challenges from employers after a series of controversial rulings. Could the NLRB’s structure be at risk?

Epstein Becker Green attorneys Stuart M. Gerson and Laura H. Schuman discuss how the NLRB’s broad interpretation of their enforcement authority under the National Labor Relations Act has invited legal challenges. Additionally, they examine how the U.S. Supreme Court’s Loper Bright decision is perceived to create a more favorable environment for contesting the NLRB’s authority.

We previously reported that the New Jersey Department of Labor and Workforce Development (“NJDOL”) issued proposed regulations to implement New Jersey’s Temporary Workers’ Bill of Rights (the “Act”), including its pay equity requirement. On September 16, 2024, the NJDOL adopted N.J.A.C. 12:72 (the “Regulations”) implementing sections 1 through 7, and 10 of the Act, pertaining to “workplace protections, as well as temporary help service firm and third-party client responsibilities.” The key provisions are summarized below.

Pay Equity Requirement

Significantly, the Regulations provide a formula for calculating the minimum hourly rate of pay for temporary workers, which under the Act is determined by “the average rate of pay and average cost of benefits” of comparator employees, i.e., employees of the third-party client who perform:

the same or substantially similar work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions for the third-party client at the time the temporary laborer is assigned to work at the third-party client.

As more organizations across industry sectors store personal data with cloud storage vendors— including the three largest vendors in the world, Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform—federal regulatory agencies are increasing their scrutiny of data control efforts and vetting the data privacy and security protocols of third-party vendors. AT&T’s recent settlement with the Federal Communications Commission (FCC) serves as a cautionary tale.

What Is the Cloud?

In case your cloud knowledge is, well, nebulous, cloud data storage allows user organizations to store data on remote servers that are maintained by a third party and are located off site. Users then access the data via the internet. This enables seamless collaboration and accessibility by users in disparate locations, without the burden of physical infrastructure.

According to Precedence Research, the cloud computing market will continue to rise, with the global market predicted to surpass $1 trillion by 2028. A 2023 survey of  hospital and health system leaders conducted by Global Healthcare Exchange (GBX) found “cloud-based solutions are quickly becoming a new standard within hospitals and health systems and impact nearly every domain, including supply chain, clinical, finance, and HR teams.” The survey revealed that nearly 70 percent of all hospitals and health systems are likely to adopt a cloud-based approach by 2026.

The benefits of cloud storage include scalability, cost efficiencies, increased user accessibility, and improved operational resiliency. Cloud technology can even lead to increased cybersecurity. Yet the GBX study still emphasizes the importance of selecting the “right cloud partner” to achieve the best outcome and stronger data security.