Exchange Act Rule 21F-17, adopted in 2011 under the auspices of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, prohibits any person from taking any action to impede an individual from communicating directly with the SEC, including by “enforcing, or threatening to enforce, a confidentiality agreement . . . .” The SEC has prioritized enforcing this rule expansively, by requiring employers to provide SEC-specific carveouts to policies and agreements governing confidentiality. According to an Order issued last week against The Brink’s Company ( “Brink’s” or “Brinks”), the SEC seems to suggest that employers must provide a specific carveout in restrictive covenant agreements permitting employees and former employees to report information to the SEC in addition to the statutory disclosure provided for in the federal Defend Trade Secrets Act (DTSA).
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DTSA Whistleblower Language May Be Required, but Is It Sufficient? Not According to the SEC.
Exchange Act Rule 21F-17, adopted in 2011 under the auspices of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, prohibits any person from taking any action to impede an individual from communicating directly with the SEC, including by “enforcing, or threatening to enforce, a confidentiality agreement . . . .” The SEC has prioritized enforcing this rule expansively, by requiring employers to provide SEC-specific carveouts to policies and agreements governing confidentiality. According to an Order issued last week against The Brink’s Company ( “Brink’s” or “Brinks”), the SEC seems to suggest that employers must provide a specific carveout in restrictive covenant agreements permitting employees and former employees to report information to the SEC in addition to the statutory disclosure provided for in the federal Defend Trade Secrets Act (DTSA).
State and Local Minimum Wage Increases Are Coming on July 1, 2022
The weather is not the only thing changing this summer. As reflected in the charts below, nearly two dozen states and localities are increasing their respective minimum wages effective July 1, 2022. Accordingly, employers with minimum wage workers should consult with counsel to ensure that their compensation practices are compliant with the laws in all jurisdictions in which they operate nationwide.
Fifth Circuit Holds COVID Is Not a “Natural Disaster” Under the WARN Act
On June 15, 2022, the U.S. Court of Appeals for the Fifth Circuit held that COVID-19 does not qualify as a “natural disaster” under the federal Workers’ Adjustment and Retraining Notification (“WARN”) Act, effectively foreclosing one important argument used by employers in defense of COVID-19-related WARN lawsuits. As this is the only appellate court to affirmatively interpret WARN’s “natural disaster” exception, barring a split by other circuits, this case sets an important precedent in ongoing COVID-19-related WARN litigation, as well as WARN suits related to future pandemics.
Advance Notice of Restrictive Covenants May Be Required, But They Should Not Be Executed Before Employment Begins
As readers of this blog are aware, many states now require employers to provide prospective employees with copies of any noncompetes (and, in some cases, other restrictive covenants) they will be required to sign as a condition of employment. For example, Massachusetts requires that noncompetes be provided at the earlier of when an offer is made or 10 business days before the first day of employment; in Illinois it is 14 calendar days before employment begins; in Maine it is three days; in New Hampshire and Washington a noncompete must simply be provided before an employee’s acceptance of an offer; in Oregon and Rhode Island it is two weeks before employment begins; and beginning August 9, 2022, Colorado will require not only that both noncompete and non-solicitation covenants be provided to employees at least 14 days before the effective date of employment, but a separate standalone notice must be provided as well.
Preparing Corporate Messaging in the Wake of Dobbs
The United States Supreme Court (“SCOTUS”), in Dobbs v. Jackson Women’s Health Organization, has held that there is no constitutional right to abortion, overruling Roe v. Wade and Casey v. Planned Parenthood.
CMS Reduces COVID-19 Vaccine Mandate Surveys and Rescinds Surveyor Vaccination Requirements
In two recent memoranda, the Centers for Medicare and Medicaid Services (CMS) made changes to previously issued survey guidance related to COVID-19 vaccination issues.
In QSO-22-17-ALL, CMS modified the frequency by which State Agencies and Accreditation Organizations will survey for compliance with the federal staff vaccine mandate applicable to health care providers and suppliers (discussed in a prior post). Noting that 95% of providers and suppliers surveyed have been found in substantial compliance with the rule, CMS is eliminating the previous requirement that State Agencies and Accreditation Organizations survey for compliance with the vaccine mandate during every survey. Review of compliance with vaccine mandate is still required, however, during initial surveys, recertification surveys, and in response to specific complaint allegations that allege non-compliance with the staff vaccination requirement. This means that a State Agency or Accreditation Organization is not required to review compliance with the staff vaccination requirement during, for example, a validation survey or a complaint survey unrelated to compliance with the staff vaccination requirement. A State Agency or Accreditation Organization may still choose to expand any survey to include review of vaccine mandate compliance; however, the new guidance should result in a reduction in survey frequency of this issue for providers and suppliers.
Can a Noncompete Increase Competitiveness? Arkansas Football Sure Hopes So.
You don’t hear much positive news these days about noncompete agreements. Instead, most national media outlets take cases of extreme abuse and frame them as the norm instead of the outliers that they are. And the national media also often portrays employers in a negative light for allegedly forcing noncompetes on employees who purportedly have no choice in the matter and receive no benefit from the transaction. The data does not bear this out—indeed, according to reputable studies, workers who are presented with noncompetes before accepting jobs receive higher wages and more training, and are more satisfied in their jobs than those who are not bound by noncompetes—but that is beside the point when there is an attention-grabbing story to be written.
Employers, Are You Ready for a Possible Post-Roe Workplace?
Employment issues to consider while awaiting decision in Dobbs v Jackson Women’s Health Organization
The United States Supreme Court (“SCOTUS”) will imminently release its decision in Dobbs v Jackson Women’s Health Organization, and if the final ruling is consistent with the recently-leaked draft opinion (overturning Roe v Wade and Planned Parenthood v Casey), employers may soon need to contend with a variety of novel employment and benefits related issues. Some employers have already begun to consider and plan for a post-Roe workplace. Those who have not would be wise to do so now, to best ensure a well-coordinated and thoughtful approach.
For example, some employers have publicly announced plans to provide expanded healthcare benefits, travel, lodging and other benefits to employees who may seek abortion-related services in states where those medical services will be prohibited or limited. These benefits raise complex legal issues applicable to employers’ group health plans and fringe benefit plans, including conflicts between federal and state law, federal ERISA preemption and potential employer civil and/or criminal liability for providing these benefits.
The Pendulum Swings Both Ways: State Responses to Protect Reproductive Health Data, Post-Roe
The U.S. Supreme Court is expected to imminently issue its opinion in the case Dobbs v. Jackson Women’s Health Organization (“Dobbs”). If the Court rules in a manner to overturn Roe v. Wade, states will have discretion in determining how to regulate abortion services.[1] Such a ruling would overturn nearly 50 years of precedent, leaving patients, reproductive health providers, health plans, pharmacies, and may other stakeholders to navigate a host of uncharted legal issues. Specifically, stakeholders will likely need to untangle the web of cross-state legal issues that may emerge.
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