Positive news for employers wishing to enforce post-termination restrictions

In an eagerly awaited decision, the Supreme Court gave its judgment on the meaning of wording commonly used in non-compete post-termination restrictions and the possibility of severing such wording where it would otherwise render such a restriction unenforceable.

Background

Ms Tillman was the Joint Global Head of Financial Services of executive search and recruitment firm Egon Zehnder at the time she left its employment. Her employment contract included a noncompete post-termination restriction of six months’ duration. This noncompete post-termination restriction provided that Ms Tillman would not “directly or indirectly engage or be concerned or interested in any business carried on in competition with any of the businesses” of Egon Zehnder with which she had been materially concerned in the period of 12 months prior to her employment ending. This restriction became contentious and the subject of substantial litigation when Ms Tillman made known her intention to work for a competitor in apparent breach of the non-compete restriction.

Egon Zehnder brought proceedings to enforce the non-competition covenant and successfully obtained an injunction against Ms Tillman. Ms Tillman appealed this decision, arguing, among other things, that the covenant was void on the basis that it was too widely drafted. In particular, Ms Tillman argued that the use of the words “interested in” prevented her from holding even a minority shareholding in a competitor and the restriction was therefore void as an unenforceable restraint of trade. The Court of Appeal agreed and set aside the injunction. Egon Zehnder then appealed to the Supreme Court.

New York Lawmakers Upend the Employment Law Landscape…Again (Part 5)

By Mark S. Goldstein, Saranne Weimer and Alexandra Manfredi on 2 July 2019 Posted in Discrimination, Employment & Labor (U.S.), New York Employment Beat, Sexual Harassment, Workplace Laws and Regulations

Today is the last in a five-part blog series on New York’s sweeping changes to the legal landscape for Empire State employers. In prior posts, we covered limitations on the use of nondisclosure provisions in settlement and separation agreements, the new standards for litigating and defending harassment claims, expanded equal pay protections, and the statewide ban on salary history inquiries. Today, we will explore the remaining changes to the state’s anti-discrimination laws. All of the changes discussed in this article will take effect 60 days after Governor Cuomo signs the Bill, unless otherwise noted:

Expanding Protections to More Employers and More Workers

All New York employers will now be subject to the state’s anti-discrimination law, regardless of size. Under the prior incarnation of the law, employers with fewer than four employees were excluded from coverage (except for sexual harassment claims). Now, every single employee and employer in New York will be covered by these protections. This change will take place 180 days after enactment.

In addition, non-employees – such as independent contractors, vendors, and consultants (and their employees) – will now be entitled to the protections afforded by the state’s anti-discrimination law. This expands on a 2018 law that afforded such protections to non-employees asserting claims of sexual harassment. In addition, the law will also now protect domestic workers from all forms of harassment.

Loss of holiday entitlement – higher hurdles for employers if they want to ensure that employees lose the right to claim outstanding holiday entitlement at the end of the calendar year

By Ulrike Bischof and Jan Weißgerber on 1 July 2019 Posted in Employment (Germany), Wage and Hour, Workplace Laws and Regulations

The German Federal Leave Act (Bundesurlaubsgesetz) provides that employees forfeit the right to claim outstanding holiday entitlement at the end of the calendar year or at the end of a specific transfer period; in other words, all holiday must be granted and taken beforehand. Under previous case law, this did even apply in the event that the employer declined an employee’s holiday request even though the request was made in a timely manner.

The Court of Justice of the European Union, however, has taken a different approach. In its ruling of 6 November 2018, the court decided that the regulation according to which employees automatically lose annual leave if they have not submitted a holiday request is not in line with European law. Following this decision, the Federal Labour Court, the highest labour court in Germany, developed its current case law and stated in its ruling of 19 February 2019 that the employer is obliged “to ensure in a concrete and fully transparent manner that the employee is actually in a position to take their paid annual leave by formally requesting them – if necessary – to do so”.

New York Lawmakers Upend the Employment Law Landscape…Again (Part 4)

By Mark S. Goldstein, Saranne Weimer and Alexandra Manfredi on 1 July 2019 Posted in Discrimination, Employment & Labor (U.S.), New York Employment Beat, Wage and Hour, Workplace Laws and Regulations

Today is the fourth in a five-part blog series on New York’s sweeping changes to the legal landscape for Empire State employers. In prior posts, we covered limitations on the use of nondisclosure provisions in settlement and separation agreements, the new standards for litigating and defending harassment claims, and expanded equal pay protections. Today, we will discuss important changes that will affect hiring practices – most notably, a statewide ban on salary history inquiries.

In another legislative move to broaden the state’s anti-discrimination laws, New York state will now prohibit employers from asking applicants or current employees about their wage or salary history. This new law will go into effect 180 days after Governor Cuomo signs the legislation, which he is expected to do. While New York City, as well as Albany, Suffolk, and Westchester counties, have enacted salary inquiry bans over the past few years, Empire State employers outside those jurisdictions have been free to ask applicants and current employees about their wage or salary history – until now.

New York Lawmakers Upend the Employment Law Landscape…Again (Part 3)

By Mark S. Goldstein, Saranne Weimer and Alexandra Manfredi on 28 June 2019 Posted in Employment & Labor (U.S.), Equal Pay, New York Employment Beat, Workplace Laws and Regulations

Today is the third in a five-part blog series on New York’s sweeping changes to the legal landscape for Empire State employers. In prior posts, we covered limitations on the use of nondisclosure provisions in settlement and separation agreements and the new standards for litigating and defending harassment claims. Today, we will cover the expansion of New York’s equal pay law.

As part of New York’s overhaul of its existing anti-discrimination laws, legislators have expanded the scope of the state’s Equal Pay Act (N.Y. Labor Law § 194) to encompass all classes and characteristics protected by the New York State Human Rights Law. In addition, the new law lowers the standard of proof needed to establish pay discrimination. These changes will take effect 90 days after Governor Cuomo signs the legislation, which he is expected to do.

By way of background, federal and New York State law have, for decades, prohibited pay differentials between employees of the opposite sex who perform equal work. In 2015, New York amended its Equal Pay Act to limit an employer’s defenses against equal pay claims. The State also increased the amount of liquidated damages available to a prevailing plaintiff-employee in an equal pay lawsuit.

Recording working time: do changes lie ahead?

By Carl De Cicco and David Ashmore on 28 June 2019 Posted in Employment (UK), Wage and Hour, Working Time, Workplace Laws and Regulations

The European Court of Justice (ECJ) has recently decided that the Working Time Directive (WTD) imposes an obligation on employers in all EU member states to record all working time, not just excess hours or overtime. This marks a significant departure from standard practice and may mean that employers will, in future, be required to implement systems that record workers’ time.

Background

In Confederación Sindical de Comisiones Obreras, the ECJ considered the provisions concerning rest periods and the weekly working hours limit under the WTD. In this case, a number of trade unions brought a group action against the employer, seeking to obtain a declaration that the employer was under an obligation to set up a system recording the actual amount of time worked each day. This system should, the claimants argued, make it possible to check that the working times laid down in legislation and collective agreements were properly adhered to. The employer did not have such a system in place, but it did operate a computer application that enabled whole-day absences to be recorded without measuring the duration of time worked by each worker or the number of overtime hours worked.

Article 3 WTD provides for a minimum period of daily rest (11 hours in any 24-hour period) while Article 5 provides for a minimum period of weekly rest (24 hours per period of seven days). The WTD also contains an upper limit of 48 hours for the average working time for each seven-day period, although UK employees can opt-out of this limit by written agreement.

The ECJ was asked to consider whether national Spanish law (which did not require every hour to be recorded) was sufficient to ensure the effectiveness of the working time limits laid out in the WTD, and if not, whether employers should be required to establish systems whereby the actual daily working time worked by full time employees is recorded.

New York Lawmakers Upend the Employment Law Landscape…Again (Part 2)

By Mark S. Goldstein, Saranne Weimer and Alexandra Manfredi on 27 June 2019 Posted in Discrimination, Employment & Labor (U.S.), New York Employment Beat, Workplace Laws and Regulations

This is the second in a series of blog posts concerning a suite of legislation passed last week by New York State legislators. Yesterday, we discussed a Bill that will change how nondisclosure provisions are used in the context of settlement and separation agreements. Today, we look at a series of measures that will change how harassment claims are litigated in New York State (although many of these changes should already be familiar to New York City employers).

Perhaps most notably, the new laws lower the standard for proving claims of workplace harassment under New York State’s anti-discrimination law. Currently, under both federal and New York State law, an employee-plaintiff alleging harassment must establish that the conduct at issue was “severe or pervasive.” Without this showing, the employee cannot succeed in proving their claim of harassment.

Under the new law, however, harassment will be deemed unlawful “regardless of whether such harassment would be considered severe or pervasive under precedent applied to harassment claims.” In other words, New York State will no longer recognize the longstanding “severe or pervasive” standard. As a slight consolation to the business community, the new laws do provide an affirmative defense to harassment claims if the employer can show that “the harassing conduct does not rise above the level of what a reasonable victim of discrimination with the same protected characteristic would consider petty slights or trivial inconveniences.” These changes align New York State law with New York City law, which eliminated the “severe or pervasive” standard and adopted the “petty slights or trivial inconveniences” affirmative defense years ago. Continue Reading

New York Lawmakers Upend the Employment Law Landscape…Again (Part 1)

By Mark S. Goldstein, Saranne Weimer and Alexandra Manfredi on 26 June 2019 Posted in Discrimination, Employment & Labor (U.S.), New York Employment Beat, Sexual Harassment, Workplace Laws and Regulations

Late last week, New York legislators passed a series of sweeping changes to the state’s employment laws. These drastic changes come on the heels of landmark legislation enacted just last year – in April 2018 – aimed at curbing workplace sexual harassment. This year’s laws, which are in part a further response to the #MeToo movement, will impact settlement and separation agreements, litigation of harassment and discrimination claims, hiring practices, and pay policies for employers operating everywhere from Montauk to Buffalo. We will address the myriad of new laws – and how they will affect your business – in this five-part series.

To start, much of the discussion surrounding the new laws has focused – and understandably so – on the lowered legal standard for proving workplace harassment claims. While we will cover this topic in tomorrow’s post, there is another new change that will likely have a greater impact for Empire State businesses on a day-to-day basis: namely, the severe curtailment on the use of nondisclosure provisions in agreements resolving claims of unlawful discrimination, harassment, and retaliation.

Court of Appeal: holiday pay must include regular voluntary overtime

By Michael D. Smith on 26 June 2019 Posted in Employment (UK), Employment Tribunals, Wage and Hour, Working Time, Workplace Laws and Regulations

Does pay for regular voluntary overtime need to be included in the calculation of holiday pay? Yes, says the Court of Appeal in a decision which confirms several prior Employment Appeal Tribunal (EAT) decisions that the entitlement to holiday pay under the Working Time Directive (WTD) must include pay for regular voluntary overtime. As we explain below, the outcome is more complex in practice as tribunals will now have to decide, on a case-by-case basis, whether a particular pattern of voluntary overtime is sufficiently regular and settled to fall within the category of regular voluntary overtime.

Background

Under article 7 of the WTD, EU member states must ensure that workers have the right to at least four weeks’ paid annual leave. The WTD does not expressly specify how statutory holiday pay is to be calculated. However, it is well established that holiday pay should equate to ‘normal remuneration’. Normal remuneration has been interpreted to include not only basic salary but also remuneration which is intrinsically linked to the tasks the worker regularly performs.

The EAT held in Bear Scotland v. Fulton and others that compulsory non-guaranteed overtime (i.e., overtime that is compulsory for the employee if the employer requires it but which is not guaranteed to be provided) must be included in the calculation of holiday pay. The EAT also held, in Dudley Metropolitan Borough Council v. Willetts and others, that holiday pay should correspond to normal remuneration so that workers should not be discouraged from taking their annual leave entitlement; in other words, pay during holidays should not be below the rate a worker would expect to receive had they been working. For a payment to be treated as normal, it should have been made over a sufficient period of time on a regular or recurring basis.

The calculation of holiday pay has also been considered by the European Court of Justice (ECJ), which held in Hein v. Albert Holzkamm GmbH & Co. KG that remuneration received for overtime does not, in principle, form part of normal remuneration. However, where the employment contract requires the worker to work overtime on a broadly regular and predictable basis then that overtime should be included in the calculation of holiday pay. Continue Reading

New marijuana laws and court cases continue to provide inconsistent guidance for employers: a summary of recent developments in Illinois, Nevada, New Jersey and Michigan

By Melissa M. Ferrara and Meghan O. Offer on 25 June 2019 Posted in Employment & Labor (U.S.), Medical Marijuana, Workplace Laws and Regulations

Over the past few years, 31 states have legalized some form of medical or recreational marijuana use and this wave of legalization continues to grow. Since there has been no consistent approach taken related to the intersection of legalized use and employment, employers must stay vigilant about recent developments in each location in which they operate.

To assist in navigating these waters, below is a summary of the recent enactments in Illinois and Nevada, as well as an update as to newly published judicial interpretations of the medical marijuana laws in New Jersey and Michigan. Continue Reading