Earlier this summer, Winstead’s Labor & Employment team reported that Judge Ada Brown in the U.S. District Court for the Northern District of Texas issued a preliminary injunction as applied only to the plaintiffs in Ryan LLC V. Federal Trade Commission. At the time, the memorandum opinion Judge Brown issued alongside the injunction suggested that she leaned in favor of vacating the Federal Trade Commission’s (“FTC”) Noncompete Rule (“FTC Rule”) entirely. Judge Brown set a briefing schedule on Ryan LLC’s motion for summary judgment, which signaled a decision on the merits of Ryan LLC’s claims would be made by August 30, 2024. Yesterday, ten days prior to her stated timeline—and just four days after briefing closed—Judge Brown issued her memorandum opinion and order setting aside the FTC Rule and holding that the FTC Rule “shall not be enforced or otherwise take effect on its effective date of September 4, 2024 or thereafter.”

Continue Reading Pencils Down on Those Notices, Employers: A Federal Judge Just Set Aside FTC Noncompete Rule

Winstead’s Labor & Employment team previously reported that the Federal Trade Commission (“FTC”) issued its final rule largely banning noncompetes nationwide (“Rule”), spurring races to the courthouse in the federal district courts. In that regard, we reported that Judge Ada Brown in the United States District Court for the Northern District of Texas issued a ruling on July 3, 2024, in Ryan LLC v. Federal Trade Commission, enjoining the FTC from enforcing the Rule against the specific plaintiffs in that case until Judge Brown makes a decision on the ultimate merits of the action. Judge Brown is slated to rule on the merits of the case on or before August 30, 2024.

Continue Reading Lawsuits Lead to Inconsistent Judicial Rulings Regarding the FTC’s Noncompete Ban

Winstead’s Labor & Employment team previously reported that the FTC issued its final rule on the proposed noncompete ban and that a Dallas-based tax services company filed suit in Texas seeking a stay of the FTC’s rule. Back in May, Judge Ada Brown in the United States District Court for the Northern District of Texas set out a briefing schedule for Ryan LLC’s motion to stay the FTC’s final rule, wherein Judge Brown promised to render a decision on whether to stay the rule by July 3, 2024.

Continue Reading Texas Federal Court Enjoins the FTC from Implementing and Enforcing the Noncompete Ban

On April 24, 2024, Winstead’s Labor & Employment team reported that—after much anticipation— the FTC issued its final rule banning noncompete agreements nationwide. In our initial post, we noted that the final rule had yet to be published in the Federal Register but that its publication triggers the 120-day period before the rule becomes effective. The final rule was published in the Federal Register on May 8, 2024, and the FTC notes that its expected effective date is therefore September 4, 2024.

Continue Reading The FTC’s Noncompete Ban is Published…What Now?

Over a year ago, in January 2023, we reported on Winstead’s Employer Law Resource Blog that the Federal Trade Commission issued a proposed rule banning noncompetes. The FTC later extended the original 90-day notice-and-comment period and thereafter apparently took its time considering the multitude of comments it received. Finally, on April 23, 2024, the FTC issued a press release announcing the issuance of its final rule officially banning noncompetes nationwide.

Continue Reading The FTC Did What?! It Banned Noncompetes

As employers march through the beginning of the new year, they should ensure they are in compliance with the various mandatory workplace notice and posting requirements under applicable state and federal laws.

To that end, the U.S. Department of Labor provides a poster advisory tool for employers to reference. Similarly, most state department of labor websites will, at the very least, provide a list of required state employment posters. Many of these websites also provide links for employers to download mandatory posters for free.

Continue Reading Reminder to Employers Regarding Mandatory Workplace Posters

The Occupational Safety and Health Administration has recently announced that it is delivering employers a one-two punch to “make its penalties more effective in stopping employers from repeatedly exposing workers to life-threatening hazards or failing to comply with certain workplace safety and health requirements.” Specifically, on January 26, 2023, OSHA issued two new pieces of enforcement guidance that could increase employers’ OSHA liability. Employers are therefore well-advised to spend some time addressing workplace safety hazards and mitigating their OSHA risks now—before OSHA comes knocking.

Continue Reading New OSHA Enforcement Standards Likely to Increase Penalties for Employers Receiving Citations for Workplace Safety Violations

On January 5, 2023, the Federal Trade Commission proposed a new rule that bans noncompetition agreements between private employers and their employees nationwide. In its press release, the FTC sharply criticized noncompetes, saying that they suppress wages, limit innovation, and deter new businesses. Accordingly, the FTC believes noncompetes “constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act.”

Section 5 of the FTC Act generally prohibits “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.” Estimating that around 1 in 5 workers in the U.S. are bound by noncompetes, the FTC believes that wages would increase by $250 billion to $296 billion per year if such provisions were banned outright. And that appears precisely what the proposed rule is designed to do. 

The FTC broadly defines a noncompete as a “contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.” Under the proposed rule, all such provisions are prohibited. The FTC states that a prohibited noncompetition provision may also include an overly broad nondisclosure provision—i.e., one that is so broadly written that it effectively precludes the worker from working in the same industry. This view is shared by some courts in states where noncompetes are already outlawed. See, e.g., Brown v. TGS Mgmt. Co., LLC, 57 Cal. App. 5th 303, 314-19 (Cal. Ct. App. 2020) (finding that nondisclosure provision was void because the definition of “confidential information” was “strikingly broad” in that it included all information that was useable in or related to the relevant industry). The FTC intends for the rule to apply to both employees and independent contractors. The only exception to the prohibition is in the context of a sale of a business, ownership, and/or assets.

The FTC also proposes that any prohibited noncompetition provisions that are already signed and in place are subject to rescission. If the rule goes into effect, employers will need to notify employees that existing noncompetition provisions are rescinded. Further, employers may not “represent” to a worker that he or she is subject to a prohibited noncompetition provision.

At this point, the rule is simply proposed. That means the FTC is collecting comments to the proposal for 60 days from the date of publication of the proposed rule. But, given the broad scope of the proposed rule, employers need to start thinking about how they will comply. At a minimum, this will entail some due diligence with an employment law attorney to determine which employees and independent contractors have restrictive covenants and then assessing whether those restrictive covenants would constitute a prohibited noncompetition provision under the proposed rule. Employers will also need to analyze whether and how to enforce nondisclosure and nonsolicitation provisions that are not, themselves, traditional noncompetition provisions, as this proposed rule would seemingly give defendants in such cases an additional defense against such claims.

Contact

Taylor White  |  214.745.5175  |  twhite@winstead.com

Disclaimer: Content contained within this article provides information on general legal issues and is not intended to provide advice on any specific legal matter or factual situation. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel.

On January 13, 2021, the United States Supreme Court blocked the Occupational Safety and Health Administration’s (OSHA) Emergency Temporary Standard (the ETS) regarding COVID-19 vaccination and testing in the workplace. The ETS generally required covered employers to have either a mandatory COVID-19 vaccination policy or a policy where unvaccinated employees undergo weekly testing and wear a face covering at work. Following a December 17, 2021, ruling by the Sixth Circuit Court of Appeals, the ETS was scheduled to be enforced by OSHA, in part, on January 10, with its testing requirements to be enforced starting February 9. In light of the U.S. Supreme Court’s ruling today, that will not be the case.

What Was the Majority’s Reasoning for Blocking the ETS?

The majority of the U.S. Supreme Court found that the Occupational Safety and Health Act does not authorize the U.S. Secretary of Labor to issue a vaccine mandate. It described the ETS instead as a “broad public health” measure. That said, the majority acknowledged that OSHA has authority “to regulate occupation-specific risks related to COVID-19.” For the example, the majority signaled there would be no issue with a vaccine mandate by OSHA “[w]here the virus poses a special danger because of the particular features of an employee’s job or workplace . . . . [,}” such as with respect to “researchers who work with the COVID-19 virus” or workers “in particularly crowded or cramped environments.” But it drew a line between those sorts of workplaces and “the everyday risk of contracting COVID-19 that all face.” Specifically, the majority stated that “[r]equiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the” category of regulating “public health more broadly.”

But, Wait, the OSHA ETS Isn’t a Mandatory Vaccination Requirement, Right?

The majority of the Court dismissed what it called an “exception” from a mandatory vaccination policy requirement that permits employers to have a vaccine-or-test-and-mask policy instead. In that regard the majority generally observed that “employers are not required to offer [the vaccine-or-test-and-mask] option,” that the ETS “purports to pre-empt state laws to the contrary,” and that the ETS permits employers to remove unvaccinated employees from the workplace if they fail to get tested and wear face coverings. The dissenting opinion pointed out that the majority “obscures [employers’ policy] choice by insistently calling the policy a vaccine mandate.” That is, the ETS is not a vaccine mandate, according to the dissent. But, the majority appears to have disagreed with that observation.

What Do Employers Do Now?

OSHA still requires employers to provide a workplace “free from recognized hazards that are causing or are likely to cause death or serious physical harm.” So, employers are feeling whipsawed by the multiple developments regarding OSHA’s ETS when figuring out how to keep their workers safe. At this time though, employers do not need to comply with the ETS, unless and until the U.S. Supreme Court’s ruling today is terminated and a different outcome and judgment is sent down.

Employers are, however, still permitted to institute their own workplace safety policies, which would include mandatory vaccination policies or vaccine-or-test-and-mask policies, unless state law otherwise prohibits the same—like Texas does with respect to mandatory vaccination policies. The Equal Employment Opportunity Commission has generally recognized that employers can require all employees to get the COVID-19 vaccine, provided that the employer complies with all applicable employment laws in doing so (e.g., provides reasonable accommodations for covered disabilities under the ADA and for sincerely held religious beliefs under Title VII). Many employers have done just that, even before OSHA’s ETS. Those policies are safe for now—again, absent a state law to the contrary.

As always, it behooves employers to stay abreast of CDC and OSHA guidance related to COVID-19 risks in the workplace, as it is a rapidly changing virus with risks that touch everyone, as the Supreme Court recognized. Employers should therefore be sure to involve senior manager, human resources, and appropriate legal counsel in complying with government guidance and regulations—and wading through the maze of court orders pertaining to the same. In this way, an employer’s approach to COVID-19 in the workplace will be consistent and deliberate.

Contact

Taylor White  |  214.745.5175  |  twhite@winstead.com

Disclaimer: Content contained within this article provides information on general legal issues and is not intended to provide advice on any specific legal matter or factual situation. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel.

The Biden administration on Nov. 4 released a Fact Sheet announcing the details of its Occupational Safety and Health Administration (OSHA) and Center for Medicare and Medicaid Services (CMS) COVID-19 vaccination mandates.

OSHA is issuing a Vaccination and Testing Emergency Temporary Standard (ETS) that requires employers with 100 or more employees to get their employees vaccinated by Jan. 4. Unvaccinated employees will have to produce a negative test on at least a weekly basis.

CMS is requiring workers at healthcare facilities that participate in Medicare or Medicaid to be fully vaccinated by Jan. 4. The rule covers approximately 76,000 healthcare facilities and more than 17 million healthcare workers.

The Fact Sheet also announced that the Dec. 8 deadline for compliance with Executive Order 14042’s vaccination mandate for federal contractors would be extended to Jan. 4. The guidelines released Sept. 24 by the Biden administration paints federal contractors with a broad brush, stating that employees who work in human resources, billing, legal review and perform work “in connection with a Federal Government contract” must be vaccinated.

Continue Reading The Federal Government Vaccine Mandate’s Impact on Colleges and Universities