Davis+Gilbert PERKS

Today marks the original effective date of the FTC’s Non-Compete Rule, which was struck down in Texas a few weeks ago. While the recent ruling from the Northern District of Texas takes the Rule’s originally scheduled September 4, 2024 effective date off the books, this story is far from over. With litigation ongoing in Pennsylvania and potential next steps from the FTC, businesses need to be prepared for what’s ahead. Read our latest client alert for a comprehensive analysis.  https://lnkd.in/dGyBKgr9 #EmploymentLitigation 

Noticed an uptick in "tip" buttons when you are checking out at a restaurant or coffee shop? Both candidates for president have announced support for a "no tax on tips" policy for restaurant and salon workers, taxi drivers, and other workers in certain service industries, who earn a significant portion of their income from tips. Many questions remain about how this would be tracked, the fairness of the proposal to workers who do not receive tips, and the actual potential benefit for tipped workers. More to come as each candidate fleshes out their respective proposals on the concept over the next few months, as the election draws nearer. #Tips #Wages #DGPERKS

As you know, PERKS has been closely following the fate of the Federal Trade Commission’s (“FTC”) rule banning most employee and independent contractor non-competes (the “Rule”) and now there is a major update:   Yesterday, August 20, 2024, a federal court in Texas struck down the Rule nationwide, finding that the FTC exceeded its statutory authority in promulgating the Rule and that the Rule is arbitrary and capricious. See the court's decision here: https://lnkd.in/gn3r9cAW Unlike the court’s July preliminary injunction ruling, which granted relief solely to the plaintiffs in the case, this decision, on its face, applies to all businesses across the country that otherwise would have been subject to the Rule. The court determined that, in light of its findings, the proper remedy under the Administrative Procedure Act (“APA”) is to hold the Rule unlawful in its entirety and set it aside. Pursuant to the court’s ruling, “the Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.”   While this decision is a meaningful win for opponents of the Rule, an appeal of this decision to the Fifth Circuit is likely, and there is also a competing case in Pennsylvania that appears primed to come out in favor of the Rule, setting up a potential review by the Supreme Court. #StayTuned #FTC #NonCompeteBan #InQuestion #DGPERKS

Massachusetts is the latest state to join the pay transparency trend, with Governor Healy signing “An Act Relative to Salary Range Transparency” into law on July 31, 2024.  It is available here: https://lnkd.in/ed4Sz6qE Beginning July 31, 2025, employers with more than 25 employees in Massachusetts must begin disclosing pay ranges for a “particular and specific employment position” (1) in job postings; (2) to employees offered a promotion, transfer, or new position with different job responsibilities; and (3) to individuals who currently hold or have applied for a given position.  The law’s limitation to a “particular and specific employment position” is in line with the operation of similar laws in other states, which often build in protections so as not to require the disclosure of salary ranges in generalized “help wanted” postings. Similarly, this qualifier makes clear that employers are not obligated to provide pay ranges for every position in their organization, namely those unrelated to (1) a specific job posting, (2) a specific promotion/transfer opportunity, or (3) a specific job that an individual has or is applying for. Additionally, keeping in line with language used in similar laws of other states, Massachusetts defines “pay range” as “the annual salary range or hourly wage range that the covered employer reasonably and in good faith expects to pay for such position at that time." Finally, the law includes an anti-retaliation provision, making it a violation to retaliate against any employee or applicant who enforces their rights, brings a proceedings, or provides testimony related to an alleged violation of the law. While the law makes clear that a failure to disclose pay ranges as required may only be enforced by the attorney general, the language of the statute leaves open the possibility that an individual employee or applicant may be able to bring their own lawsuit against a company for violation of the anti-retaliation provision. Employers should begin the process of developing the pay ranges necessary to comply with this law. #paytransparency #MA #DGPERKS

Interested in the fate of the legal challenges to the Federal Trade Commission (FTC)’s proposed non-compete ban? Yesterday, a Florida federal court granted a plaintiff company’s motion for preliminary injunction enjoining the FTC from enforcing the new non-compete rule against that plaintiff. Relying on recent jurisprudence from the Supreme Court, and in combination with the breadth and scope of the FTC’s final rule, the court concluded that it is required to consider the final rule in the context of the major questions doctrine. Under that doctrine, the relevant questions are whether the FTC Act grants the FTC the authority to issue the non-compete rule and does the rule implicate a major question? The Court held that given the sweep and breadth of the final rule, there was a substantial likelihood that it presents a major policy question. As such, the FTC would need to show clear Congressional authorization for the power it claims. As such, plaintiff showed a likelihood of success on this issue, warranting the injunction. Stay tuned as we inch closer to September 4 (the date the FTC noncompete ban is supposed to take effect). #FTC #NonCompeteBan #Challenges #DGPERKS

As we have previously reported, the National Labor Relations Board has been increasingly active in recent years. However, recent litigation filed in Texas by SpaceX attacked the powers and structure of the NLRB itself. SpaceX argues that NLRB proceedings violate the U.S. Constitution because the Board’s structure violates separation of powers insofar as (1) the NLRB’s five members are unconstitutionally insulated from removal by the president in violation of Article II because they cannot be removed without cause and (2) the NLRB’s administrative law judges are unconstitutionally insulated from removal by the President by at least two layers of removal. Late last month, the Western District of Texas issued a preliminary injunction in favor of SpaceX, holding that SpaceX demonstrated a substantial likelihood of success on its constitutional claims. This follows on the heels of the Fifth Circuit granting SpaceX’s request for injunction to block NLRB administrative proceedings based on similar arguments. Stay tuned as these cases could have major ramifications for the NLRB’s abilities to enforce labor laws. #NLRB #scopeofauthority #DGPERKS

🎉 Congratulations to our D+G Labor + Employment attorneys included in the 2025 Best Lawyers in America rankings Gregg Brochin, Jessica Golden Cortes, Gregg Gilman, Howard Rubin and Judith Kong! Well deserved!

As some New York employers are aware, New York Labor Law (“NYLL”) Section 191 requires that “manual workers” be paid on a weekly basis. Manual workers have been defined as individuals who spend more than 25% of working time engaged in physical labor, and physical labor has been interpreted broadly to include countless physical tasks performed by employees, so the definition is broader than one might think. There is currently a split of authority among state and federal courts in New York regarding whether liquidated damages are available to manual workers who are paid bi-weekly or semi-monthly rather than weekly. Following the First Department of the Appellate Division’s decision in Vega v. CM & Assoc. Constr. Mgt., LLC, which held that liquidated damages are available, federal courts in the Second Circuit were bound by Vega because principles of federal law required them to follow the decision in the absence of persuasive data that New York’s high court, the Court of Appeals, would rule differently. However, earlier this year, the Second Department of the Appellate Division held that such damages were not available in Grant v. Glob. Aircraft Dispatch, Inc., opening the door for courts to rule either way. Until last week, only one court in the Second Circuit had thus far followed Grant instead of Vega. However, in a welcome development for employers, on July 31, in Espinal v. Sephora USA, Inc., a magistrate judge in the Southern District of New York held that a violation of the requirement to pay manual workers weekly under NYLL Sec. 191 does not give rise to a claim for liquidated damages where payment of all wages due is made bi-weekly instead. We will, of course, continue to monitor decisions in this area until the split of authority is resolved. #NewYorkLaborLaw #LaborLaw #EmploymentLaw #DGPERKS

📢 Michigan Employers: Last week, in Mothering Justice et al. v. Attorney General et al., the Michigan Supreme Court ruled that Michigan’s current paid sick leave law, the Paid Medical Leave Act, was unlawfully adopted by the legislature. The reason for this decision is based on the fact that the legislature initially adopted a more employee-friendly ballot initiative (the Michigan Earned Sick Time Act) and then amended it into a more employer-friendly paid sick leave law (which is the law that they ultimately passed). Now, nearly five and a half years after the Paid Medical Leave Act went into effect, the Court ruled that the law would be replaced with the original ballot initiative, the Earned Sick Time Act, effective February 21, 2025. The “new” law will cover a far greater number of employers and employees, and also features a faster accrual rate, more generous overall accrual and carryover provisions, and a higher annual usage limit, among other employee-friendly provisions. The Supreme Court’s decision also impacts the state’s minimum wage, which will increase to $12 per hour effective February 21, 2025. With year-end approaching, employers with employees in Michigan will want to keep these developments in mind. #MichiganEmployers #SickLeave #PaidLeave #EmploymentLaw #DGPERKS

On August 5, 2023, New Jersey’s Temporary Workers’ Bill of Rights Law took effect. Among other requirements, under the Law Temporary help service firms (i.e. staffing firms and temp agencies) must provide written notice of certain employment terms, keep certain records, and are jointly and severally liable with their clients. Significantly, the Law also requires that any temporary laborer assigned to work at a third party client cannot be paid less than the average rate of pay and average cost of benefits, or the cash equivalent thereof, of employees of the third party client performing the same or substantially similar work. A coalition of staffing agency industry groups sued to enjoin the law, arguing that it is unconstitutional. On July 24, the Third Circuit Court of Appeals affirmed the denial of that injunction, which means that, for now, the law remains in effect. https://lnkd.in/eDQBi5YQ Employers in New Jersey, including any staffing agencies and companies that use temporary workers, should ensure that they are complying with all of the provisions of this Law. Moreover, there are other challenges to the law pending, so employers should stay up to date with any further news or information. #NJ #temporaryworkers #DGPERKS