Brave Law Bulletins
(EMPLOYMENT LAW UPDATE) JUNE 2023
Subject: Brave Law Bulletin: New York Ready to Restrict Non Compete Agreements
The New York State Legislature has approved a bill that places restrictions on non-compete agreements between employers and employees. Once signed into law by Governor Hochul, this bill will have implications for both current and future non-compete agreements.
Here are the key points of the bill:
Ban on Certain Non-Compete Agreements: Bill A01278, passed on June 20, 2023, prohibits contracts that limit individuals from engaging in any profession, trade, or business. Employers will be forbidden from requesting, requiring, or accepting non-compete agreements from "covered individuals." A "covered individual" refers to a person who may or may not have a formal employment contract but performs work for someone else, relies on that person economically, and is obligated to do work for them.
Employee Protections: The bill empowers employees to take action against employers who enforce prohibited non-compete agreements. They can seek to void the agreement and obtain injunctive relief to prevent its enforcement. Courts may award plaintiffs up to $10,000 in liquidated damages, along with compensation for lost earnings, damages, and attorney fees. The statute of limitations for plaintiffs is two years, starting from the later of when the prohibited non-compete agreement was signed, when the covered individual became aware of it, when the employment relationship ended, or when the employer attempts to enforce the agreement.
Exceptions: The ban does not apply to non-compete agreements that meet specific criteria, such as those with a fixed term of service, agreements that protect trade secrets or confidential information, and agreements that prohibit solicitation of clients. These agreements may still be enforceable as long as they are considered reasonable under New York law and not overly restrictive or detrimental to the employee or public interest.
Uncertain Areas: The bill does not clarify its impact on certain non-competes traditionally recognized in New York. For example, it does not address sale-of-business non-competes, employee non-solicitation agreements, or forfeiture clauses. Employers will need to carefully consider how these provisions may be affected once the law takes effect.
Effective Date: The bill will become effective 30 days after Governor Hochul signs it into law.
Non-Retroactive: The law will not apply retroactively to existing non-compete agreements. It only pertains to agreements entered into or modified on or after the effective date.
Employer Implications: Employers should review their current non-compete agreements and make any necessary amendments before the law takes effect. They should also consult with legal counsel to ensure compliance with the new regulations in employment contracts or non-compete agreement templates for future hires.
In conclusion, New York is joining certain other states and the Federal Trade Commission in moving towards a nationwide ban on non-compete agreements. While this change will likely benefit employees, employers will need to adapt their practices to safeguard their businesses and interests using alternative methods, such as confidentiality agreements.
Employers should navigate this new landscape carefully and seek proactive solutions. For more information or assistance, feel free to reach out to Braverman, PLLC.
Daniel S. Braverman, Esq. ([email protected])
Davin P. Cellura, Esq., Of Counsel ([email protected])
Sean W. Higgins, Esq., Of Counsel ([email protected])
Braverman, PLLC Distributes The Brave Bulletin To Clients And Friends For Informational Purposes Only. This Brave Bulletin Should Not Be Interpreted As Legal Advice, Which Can Only Be Provided In Connection With A Specific Factual Situation.
(EMPLOYMENT LAW UPDATE) May 2023
Subject: Brave Law Bulletin: Your Severance Agreement or Settlement Agreement May Be Unlawful Under National Labor Relations Act
The recent NLRB decision in McLaren and Macomb, 372 NLRB No. 58 (2023) has implications for severance and settlement agreements in relation to non-disparagement, confidentiality, and non-disclosure clauses. The NLRB held that offering these clauses in a severance agreement, which requires employees to waive their rights under Section 7 of the NLRA, violates Section 8(a)(1) of the NLRA.
Section 7 of the NLRA grants employees the right to engage in collective bargaining, form or join labor organizations, engage in concerted activities, and refrain from such activities if they choose. Section 8(a)(1) prohibits employers from interfering with these rights. The NLRB's decision states that employers cannot ask employees to choose between receiving benefits and exercising their rights under the NLRA.
While the NLRB decision specifically addressed severance agreements, it may also apply to settlement agreements. To comply with the decision, severance and settlement agreements should be narrowly tailored. Companies can consider modifying these agreements to allow employees to participate in NLRB charges or investigations, as well as discuss the terms of their agreements with other employees or third parties.
It's important to note that the decision may only apply to employees protected under the NLRA. Managers and executives, who are classified as supervisors, may be exempt from this decision.
Given the complexities involved, it is advisable to seek the assistance of an experienced employment attorney when drafting and negotiating severance and settlement agreements. Our team of employment lawyers are available to provide guidance and support in this regard.
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If you have questions concerning the above bulletin, or if you have any questions concerning other labor and employment matters, please feel free to contact us.
Daniel S. Braverman, Esq. ([email protected])
Davin P. Cellura, Esq., Of Counsel ([email protected])
Sean W. Higgins, Esq., Of Counsel ([email protected])
Braverman, PLLC Distributes The Brave Bulletin To Clients And Friends For Informational Purposes Only. This Brave Bulletin Should Not Be Interpreted As Legal Advice, Which Can Only Be Provided In Connection With A Specific Factual Situation.
(Employment Law Update) April 2020
Subject: Brave Law Bulletin: FURLOUGHS AND LAYOFFS: Legal Requirements In Responding to COVID-19 Challenges
We hope that everyone remains safe and healthy as we all work together to respond to the challenges of the COVID-19 pandemic.
As a result of the COVID-19 pandemic, most employers are forced to consider drastic changes in how they operate. This includes ceasing in-office personnel functions (for “non-essential businesses”), utilizing work from home procedures, reducing employees’ hours and/or pay, laying off or furloughing employees, and shutting down their businesses, temporarily or permanently, in whole or in part. In considering these options, employers need to know how to remain in compliance with the law, including providing all legally required notices to employees. The last thing any employer needs now is to expose themselves to unnecessary and costly legal liability when taking actions to attempt to reduce their costs.
Federal and state departments of labor, and local agencies, have published helpful guidance that answer many questions, and we have provided links below to certain guidance that we believe will be particularly helpful to you at this time.
Federal Law
Please use this link for guidance concerning federal compliance when considering furloughs and other reductions in pay and hours of employees: https://www.dol.gov/agencies/whd/fact-sheets/70-flsa-furloughs
New York State Law
Please use this link for guidance concerning New York State WARN notice compliance: https://www.labor.ny.gov/workforcenypartners/warn/warnportal.shtm
Please use this link for guidance concerning the New York Shared Work Program: https://www.labor.ny.gov/ui/employerinfo/shared-work-program.shtm
New York City Law
Please use this link for guidance concerning the New York City Temporary Schedule Change Law, the New York City Fair Workweek Law, and other relevant New York City, New York State, and federal laws: https://www1.nyc.gov/assets/dca/downloads/pdf/workers/Complying-with-NYC-Workplace-Laws-During-COVID-19.pdf
New Jersey State Law
Please use this link for guidance concerning New Jersey State WARN notice compliance: https://www.nj.gov/labor/employer-services/warn/
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If you have questions concerning the above bulletin, or if you have any questions concerning other labor and employment matters, please feel free to contact us.
Please stay well and safe.
Daniel S. Braverman, Esq. ([email protected])
Davin P. Cellura, Esq., Of Counsel ([email protected])
Sean W. Higgins, Esq., Of Counsel ([email protected])
Braverman, PLLC Distributes The Brave Bulletin To Clients And Friends For Informational Purposes Only. If You Do Not Wish To Receive Future Bulletins, Please Reply To This E-Mail With The Word "Remove" In Subject Line. This Brave Bulletin Should Not Be Interpreted As Legal Advice, Which Can Only Be Provided In Connection With A Specific Factual Situation.
