April 2024 brought major pronouncements from the federal government that will affect employment nationwide, including the FTC’s controversial ban on non-compete agreements, and the EEOC issuing guidance on workplace harassment and a final rule implementing the Pregnant Workers Fairness Act. The details are below.
FTC Issues Ban for Non-Compete Agreements Nationwide, but Challenges Loom
The Federal Trade Commission (FTC) issued a Final Rule this week to ban non-compete agreements, marking a significant shift in employment law nationwide. The Final Rule is not an absolute ban, however the exceptions are narrow. Some key takeaways from the Final Rule are:
- The Ban does away with all new post-employment non-compete agreements between employers and employees, regardless of industry or type of worker.
- The Ban allows existing post-employment non-compete agreements to remain in effect only for senior executives. A “senior executive” is defined as an employee “earning more than $151,164 annually who [is] in a policy-making position.”
- The Final Rule calls for notice to employees that previously executed post-employment non-compete agreements are no longer enforceable.
- The Ban creates an exception for the sale of a business, regardless of the ownership percentage.
- The Ban does not apply to franchisee/franchisor contracts (though the Ban does apply to employees working for a franchisee or franchisor).
The FTC rule isn’t set to go into effect until 120 days from the day it is published in the Federal Register, so likely not before September, 2024. Moreover, less than 24 hours after the FTC issued the final rule, the US Chamber of Commerce filed a lawsuit against the agency in federal court in the Eastern District of Texas. As such, the final impact of the Rule is yet to be determined.
Ultimately, employers may need to reassess their employment practices and consider alternative ways to protect their interests without resorting to non-compete agreements. Meanwhile, employees may find themselves with greater freedom in their career paths. As this issue continues to evolve, both employers and employees should stay informed about their rights and responsibilities under the new regulatory landscape.
EEOC Issues Long-Awaited Updated Enforcement Guidance on Workplace Harassment
The U.S. Equal Employment Opportunity Commission (EEOC) has released its long-awaited final version of enforcement guidance on workplace harassment. This updated advice reflects contemporary developments, including the landmark Bostock decision by the U.S. Supreme Court and the increasing prevalence of remote work.
After a seven-year effort to modernize its harassment guidelines, the EEOC has crafted a comprehensive blueprint to combat workplace misconduct. This guidance replaces publications from the 1980s and 1990s, addressing topics such as the #MeToo movement and the Bostock v. Clayton County, Georgia decision, which affirmed protections against discrimination based on sexual orientation and gender identity under Title VII of the Civil Rights Act.
The document also addresses emerging issues like remote work, teleconferencing, and social media, recognizing that harassment can occur both in-person and online. Key provisions emphasize protections against intrusive questions about sexual orientation, gender identity, or intimate body parts, as well as the importance of providing access to “gender-affirming” workplace facilities.
While the guidance received support from Democratic commissioners, it faced opposition from Republican-appointed members who criticized its stance on gender identity and restroom policies. Despite dissent, the EEOC moved forward, drawing on extensive public feedback to refine the document.
The final guidance expands on the initial draft, providing detailed examples of harassment scenarios, particularly in virtual work environments. It highlights the persistence of harassment in remote settings, debunking the notion that telework would reduce misconduct. Moreover, the document delves into intersectional and intraclass harassment, recognizing the complexities of mistreatment based on multiple protected characteristics or within shared identity groups.
EEOC Issues Final Rule Implementing Pregnant Workers Fairness Act
The U.S. Equal Employment Opportunity Commission (EEOC) has unveiled its final rule implementing the Pregnant Workers Fairness Act (PWFA), marking a significant milestone in workplace protections for pregnant individuals and those with related medical conditions. The PWFA mandates that employers provide reasonable accommodations to pregnant workers, ensuring their safety and well-being without fear of job repercussions.
The EEOC’s final regulations, spanning over 400 pages, largely endorse a pro-worker interpretation of the law, aligning with its mandate to offer accommodations unless it poses an undue burden on businesses. The regulations, following a period of public comment, encompass a broad spectrum of conditions related to pregnancy and childbirth, including lactation, endometriosis, infertility, miscarriages, and notably, abortion.
While receiving bipartisan support upon enactment, certain aspects of the EEOC’s interpretation have sparked debate. Commissioner Andrea Lucas dissented due to concerns over the expansive definition of covered conditions, including abortion. Senator Bill Cassidy expressed opposition, deeming the inclusion of abortion illegal and divergent from congressional intent.
Conversely, Commissioner Kalpana Kotagal hailed the regulations as upholding hard-won rights, emphasizing the importance of not forcing pregnant workers to choose between health and employment. Dina Bakst of A Better Balance praised the regulations as robust, ensuring access to accommodations crucial for safeguarding the health and employment of millions, particularly those in physically demanding roles.
Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.
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