EMPLOYEE BENEFITS BLOG
EMPLOYEE BENEFITS BLOG
Insights on Employee Benefits and Executive Compensation
EMPLOYEE BENEFITS BLOG
Insights on Employee Benefits and Executive Compensation
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A Win for Employers: Ninth Circuit Holds That California AB 51 Prohibiting Mandatory Arbitration Is Pre-empted by the Federal Arbitration Act

by , and | Mar 28, 2023 | ,

On February 15, 2023, employers in California regained the ability to enforce mandatory arbitration as the US Court of Appeals for the Ninth Circuit ruled that Assembly Bill 51 (AB 51), which prohibited “forced arbitration” as a condition of employment, was pre-empted by the Federal Arbitration Act (FAA).

After years of litigation, the Ninth Circuit’s ruling upholds a federal district court’s preliminary injunction that temporarily blocked California from enforcing AB 51 and all but guarantees that AB 51 will never be enforceable. While California could seek review from the Ninth Circuit (en banc) or the Supreme Court of the United States, given the Supreme Court’s line of cases upholding FAA pre-emption, we think this decision will stand.

That said, US President Joe Biden’s Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (HR 4445) must not be ignored. Employers may include sexual harassment and sexual assault claims in a voluntary arbitration agreement, but an employee may choose to file these particular claims in court.

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New Jersey Healthcare Transactions Now Face Onerous Employment Requirements

by , and | Mar 23, 2023 | ,

As of November 16, 2022, New Jersey Senate Bill No. 315 (S-315) has come into effect. The bill introduces fresh employment protections for qualifying employees of select private healthcare organizations that experience a “change in control.” The legislation mandates several obligations, such as giving prior notice, extending job offers to eligible employees, and providing improved job security against termination for a minimum of four months post-transaction. To avoid employment-related lawsuits and penalties, healthcare employers and investors in New Jersey must ensure compliance with these regulations.

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The Bosses May Be Back in Charge (but Not as Much as They Think)

by | Mar 16, 2023 | ,

CEOs may think they are fully in control of their workforces, but this belief may be more of an illusion than reality. In this Forbes article, McDermott Partner Michael Peregrine says certain pandemic-era changes to their authority may be more lasting than they realize–especially as it relates to their dynamic with the board of directors.

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NLRB Attacks Non-Disparagement and Confidentiality Clauses in Employee Releases, Severance Agreements

by , and | Mar 14, 2023 | ,

Employers, especially in the context of workforce reductions, may provide departing employees with severance agreements in exchange for a release. Those agreements often include non-disparagement clauses and confidentiality clauses regarding the terms and the amount of the agreement. On February 21, 2023, in McLaren Macomb, the National Labor Relations Board held that such clauses infringe on employees’ rights under the National Labor Relations Act. Importantly, McLaren applies to both unionized and non-unionized workplaces alike.

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US Supreme Court Rules Highly Compensated Employee Is Not Exempt from Overtime

by and | Mar 9, 2023 | ,

On February 22, 2023, the US Supreme Court held in Helix Energy Solutions Group, Inc. v. Hewitt that an employee who was paid nearly $1,000 each day he worked was not exempt from the Fair Labor Standards Act (FLSA) and therefore owed overtime for the work he did. This case turned on an interpretation of the FLSA regulations, which exempt from the overtime requirement certain bona fide executive, administrative and professional employees.

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The FTC’s Noncompete Plans Are Part of a Sea Change for Business

by | Feb 9, 2023 | ,

The Federal Trade Commission’s newly proposed rules that would prohibit most noncompete clauses in employment represent a seismic shift for business. In this Barron’s article, McDermott Partner Michael Peregrine says corporate leadership should “take very seriously” the threat that federal antitrust policy presents to business operations and strategic development.

“This government activity has risen to a level that demands serious board and executive attention as a possible corporate enterprise risk,” Peregrine writes.

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Extended Notice and Required Severance: Expansions to New Jersey’s WARN Act

by , and | Feb 7, 2023 |

In late 2022, the New Jersey Senate passed Assembly Bill No. 4768. The legislation–signed into law by Governor Phil Murphy earlier this year–implements the state’s Millville Dallas Airmotive Plant Job Loss Notification Act and requires that employers provide their employees with 90 days’ notice and severance pay in connection with a mass-layoff event.

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FTC Proposes Rule Banning Noncompete Agreements

by , and | Jan 19, 2023 |

On January 5, 2023, the Federal Trade Commission (FTC) issued a proposed rule that would prohibit employers from using noncompete agreements with their employees or independent contractors. This proposal arises from a preliminary finding by the FTC that noncompetes constitute an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act (FTC Act). It comes on the heels of the FTC’s November policy statement asserting its intention to rigorously enforce and expand the scope of Section 5 of the FTC Act’s ban on unfair methods of competition.

If adopted, this rule would make it illegal for an employer to enter into a noncompete agreement with a worker, maintain a noncompete with a worker or represent to a worker that the worker is subject to a noncompete. Employers would also be required to rescind existing noncompetes and inform workers that they are no longer enforceable.

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Independent Contractor Rule Draws 55,000-plus Comments

by | Jan 10, 2023 | ,

A US Department of Labor proposal to toughen its independent contractor rule is generating controversy and a lot of interest. Business groups, unions, advocacy organizations and individuals seized the opportunity to comment on the proposed rule, with more than 55,000 comments received by the deadline.

The rules developed by President Biden’s administration will determine who is an independent contractor and an employee. If the government decides that a business is misclassifying workers as independent contractors, it may face fines and legal action.

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Welcome (But Last Minute) Relief for Prescription Drug Reporting Originally Due December 27

by | Dec 29, 2022 | , ,

Section 204 of Title II of Division BB of the Consolidated Appropriations Act, 2021 amended the Internal Revenue Code, the Employee Retirement Income Security Act of 1974 and the Public Health Service Act to add rules governing prescription drug data collection (RxDC). The rules require group health plans, including plans offered to Federal Employees Health Benefits carriers, and health insurance issuers to report certain information related to prescription drug and other healthcare expenditures to the US Departments of Labor, Health and Human Services and the Treasury (collectively, the Departments). Under the statute, the first RxDC reports were due to be filed by December 27, 2021. However, in response to concerns expressed by stakeholders, enforcement was pushed back a full year to December 27, 2022.

In an FAQ issued December 23, 2022 (FAQ About Affordable Care Act and Consolidated Appropriations Act, 2021 Implementation Part 56), the Departments provided relief to group health plans and health insurance issuers who are required to report information relating to prescription drug and healthcare spending.

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