SO YOU THINK EMPLOYERS CAN NOW MAINTAIN NO-COMPETE AGREEMENTS WITH NO THREAT OF LEGAL CHALLENGE? BETTER HOLD THE PHONE...

October 10, 2024

As most know, in August a Texas federal court struck down the FTC’s proposed regulation banning employment non-competition agreements. However, on October 7, the NLRB’s General Counsel published a Memorandum reiterating, and further explaining, her position that most non-competition agreements violate the National Labor Relations Act, “NLRA.” This is a position that she originally announced in a May 23 Memorandum. She appears to have double-downed on this, possibly because of the FTC ruling. At any rate, employers should be aware that the NLRA applies to most private employers, whether they have a union-organized workplace or not.

Additionally, the General Counsel’s Memo states that “stay-or-pay” agreements are generally also illegal under the NLRA. These are any contracts under which an employee must pay their employer if they separate from employment, whether voluntarily or involuntarily, within a certain timeframe. Some examples are: training repayment agreement provisions or educational repayment contracts.

If an employer maintains unlawful stay-or-pay provisions or non-compete provisions, the NLRB is going to seek financial “make whole” remedies. In the case of a no-compete, this could include the difference between what the employee makes and what they could have made in another job. The Memo states “an employee must demonstrate that: (1) there was a vacancy available for a job with a better compensation package; (2) they were qualified for the job; and (3) they were discouraged from applying for or accepting the job because of the non-compete provision.” If these criteria are satisfied, the employer must compensate the employee for the difference (in terms of pay or benefits) between what they would have received and what they did receive during the same period. This could also be a remedy for a stay-or-pay agreement.

It must be noted that this General Counsel Memo does not have the force of law. However, it does set forth the enforcement position of the NLRA, meaning that NLRB Charges and investigations will likely follow. A court may eventually find that the General Counsel’s position is not in accord with the law, but it would be very expensive for an individual employer to litigate to that point.

Employers have 60 days to “cure” existing stay-or-pay provisions by unilaterally altering contract terms to conform to the General Counsel’s demands. Otherwise, they will be subject to prosecution. It appears to us that so altering the agreements would render them pretty much useless.

Employers should review any no-competes, or stay-or-pay agreements that they utilize, and determine if such agreements might violate the conditions set forth in the General Counsel’s Memo. If so, a decision will have to be made as to whether to continue to use the agreements. Employers should consult with labor counsel in making the decision whether to continue to use these agreements.

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EMPLOYEES ARE NOT ENTITLED TO TAKE FMLA LEAVE TO CARE FOR A SIBLING, RIGHT?

February 6, 2025

The FMLA contains specific provisions allowing eligible employees to take leave “to care for the employee's spouse, son, daughter, or parent with a serious health condition.” In December, the 6th Circuit Court of Appeals, which is the Federal Appellate Court for the above states, issued an opinion finding that an employee might be entitled to take FMLA leave to care for her sick sister. The language of the FMLA is crystal clear as to family members for which an employee may take FMLA leave to care for. Notwithstanding that, the court found that the in loco parentis (in the place of a parent) language in the FMLA’s definition of ‘Parent” and “Son or Daughter” showed that “Congress sought to protect parental relationships, whether biological, legal, or their functional equivalents.” So, the court sent the case back to the lower court to determine whether the employee in question had an “in loco parentis” relationship with her sister. If so, the employee would be entitled to FMLA leave to care for the sister. This nonsensical interpretation of the FMLA by court leaves employers in the above states with great uncertainty as to what to do if an employee requests FMLA leave to care for a sibling. Under the court’s skewed reasoning, the employer would have to determine whether an employee requesting such leave actually stood in loco parentis with the sibling. An employer facing such a request should consult with an HR or legal professional.

Kentucky: A Unique Blend of Culture, History, and Natural Beauty

January 31, 2025

Kentucky, located in the southeastern United States, is a state renowned for its breathtaking mountainous landscapes, rich equestrian traditions, and the world-famous bourbon industry. Known affectionately as the "Horse State," Kentucky boasts a unique culture that harmoniously blends music, history, and timeless traditions. Key Facts About Kentucky Population : Approximately 4.5 million people (2023) Official Language : English Land Area : 104,659 km² Currency : United States Dollar (USD) 10 Fun Facts About Kentucky The Kentucky Derby : Held annually in Louisville, the Kentucky Derby is one of the most prestigious horse races in the world, attracting spectators from across the globe. The Birthplace of Bourbon : With about 95% of the world's bourbon produced here, Kentucky is undeniably the epicenter of this iconic spirit. Mammoth Cave National Park : Kentucky is home to Mammoth Cave, the longest-known cave system in the world, featuring over 426 miles (686 km) of explored underground passages. Horse Capital of the World : Lexington, a vibrant city in Kentucky, is celebrated for its purebred horse breeding industry. The Appalachian Mountains : Eastern Kentucky offers stunning views of the Appalachian Mountains, making it a prime destination for hiking and outdoor adventures. Country Music Roots : Kentucky has given the world legendary country music icons, including Loretta Lynn and Bill Monroe, often referred to as the "Father of Bluegrass." The Big Red Horse Sculpture : This iconic landmark in Lexington celebrates Kentucky's equestrian legacy and is a must-see for visitors. Role in the Civil War : Due to its strategic location, Kentucky played a pivotal role during the American Civil War, serving as a border state with divided loyalties. Kentucky Fried Chicken : The globally recognized fast-food chain KFC was founded in Corbin, Kentucky, by Colonel Harland Sanders. The Kentucky Horse Park : This unique museum showcases the history of horses and their cultural and military significance, making it a paradise for horse enthusiasts. A State of Heritage and Beauty Kentucky’s allure lies in its ability to combine the charm of its natural landscapes with its cultural and historical significance. From the rolling hills of the Bluegrass region to the majestic Appalachian Mountains, Kentucky offers scenic beauty at every turn. The state’s thriving equestrian culture and bourbon industry reflect a rich heritage, while its contributions to music and art continue to shape its unique identity. Whether you’re exploring the depths of Mammoth Cave, cheering on horses at the Kentucky Derby, or savoring a glass of world-class bourbon, Kentucky promises an experience like no other. It is a proud and distinctive part of the United States, offering something special for everyone to discover.

PRESIDENT TRUMP IS WASTING NO TIME IMPROVING THE LABOR AND EMPLOYMENT CLIMATE FOR EMPLOYERS

January 22, 2025

The President made two appointments on his first day in office that will level the playing field for Employers: He named Andrea Lucas to be the Acting Chair of the EEOC. Ms. Lucas has been an EEOC Commissioner since being nominated by President Trump in 2020. Upon her recent appointment she stated “I look forward to restoring evenhanded enforcement of employment civil rights laws for all Americans. In recent years, this agency has remained silent in the face of multiple forms of widespread, overt discrimination. Consistent with the President’s Executive Orders and priorities, my priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.” The President also named Marvin Kaplan as the Chairman of the NLRB. Mr. Kaplan has served on the Board since 2017. The President should have the opportunity to appoint two more pro-employer Board Members soon, resulting in a Republican majority, and will also surely replace the radical NLRB General Counsel very soon. This will allow the Board to undue the controversial pro-union positions and decisions delivered under the previous Administration.

KENTUCKY'S MEDICAL CANNABIS: A PRIMER FOR EMPLOYERS

December 17, 2024

As everyone is probably aware from the news media, Kentucky’s Medical Cannabis Program law takes effect January 1, 2025. Under the law, individuals with qualifying medical conditions may be prescribed cannabis by medical cannabis practitioners. Such individuals will receive a state issued identification card and are referred to as “cardholders” in the new law. The good news for employers is that the new law really does not appear to change much, if anything, with regard to having a drug free workplace, and a policy for drug testing. The law specifically states that it does not require an employer to permit or accommodate the use, consumption, or possession of medicinal cannabis in the workplace. Further, the law provides that an employer may have policies restricting the use of medicinal cannabis by employees, including zero-tolerance drug policies. The law does contain some language with respect to reasonable suspicion of impairment situations. It says that “Good faith determinations of impairment permitted under this paragraph shall include behavioral assessments of impairment and a secondary step of testing an employee who is a cardholder for the presence of cannabis by an established method.” A bit unclear, but the purpose of this provision would seem to be to require employers to perform a drug test, and not just rely on an employee’s behavior to determine impairment. This is in accord with a well written drug policy. We would recommend documenting in detail the observations of a supervisor that indicate impairment, as well as the drug test results.

FEDERAL COURT BLOCKS NEW OVERTIME REGULATION FROM TAKING EFFECT 1/1/25

November 18, 2024

On Nov. 15, 2024, a Federal District Court in Texas blocked on a nation-wide basis the latest effort by the U.S. Department of Labor (DOL) to increase the minimum salary executive, administrative, and professional employees must receive before they can be properly classified as exempt from overtime under the Fair Labor Standards Act (FLSA). The minimum would have increased to $59,000 on January 1. The Judge held that the rule “plainly exceeds” the DOL’s authority. The DOL could choose to appeal the Judge’s decision to the U.S. Court of Appeals for the Fifth Circuit, but it would be well into 2025 before any such appeal would be decided. It is also likely that the incoming Trump administration will reverse or substantially revise the rule. The ruling also found that the increase in the salary threshold to $44,000, which occurred on July 1, exceeded the DOL’s authority, so the required amount has actually reverted back to $35,000. Employers should continue to monitor this situation.