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Most competent employment lawyers with experience pursuing and/or rebuffing enforcement of noncompetition agreements know that enforcement against low level workers is highly unlikely.  If recent news reports are true, Jimmy John’s apparently never got that memo.

According to reports in The New York Times, The Oregonian and the Huffington Post, the restaurant franchise is requiring all workers, including sandwich makers, to sign broad noncompetition agreements that restrict their employment opportunities for two years after leaving their cushy, highly technical jobs at Jimmy John’s.

Let’s start with the understanding that courts don’t like noncompetition restrictions, which limit a worker’s ability to pursue his career as he sees fit.  Courts use a variety of tools to limit the enforcement of those clauses.  Although courts use different terms to describe it, almost every decision analyzing enforcement of a noncompetition agreement talks about whether the former employer has a “protectible interest.”  In layman terms that means, is there something legitimate that the former employer actually needs to protect by restricting the post-termination employment opportunities of its former employees?  Customer relationships, knowledge of the company’s confidential or trade secret information, or specialized training provided by the former employer are often found to be sufficient “protectible interests” to justify enforcement of a contract clause which limits the worker’s future employment opportunities.  If there is no “protectible interest,” a court won’t enforce the agreement.Continue Reading “Freaky Fast” Oppression? Jimmy John’s Should Reconsider its Approach to Blanket Noncompete Agreements

iStock_000011905991SmallOn September 10, 2014, California Governor Jerry Brown signed AB 1522 (the “Healthy Workplaces, Healthy Families Act of 2014”) and made California the second state in the nation (after Connecticut) to enact a state-wide law requiring most California employers to provide paid sick leave to employees.  This marks the latest development in a growing trend that has seen similar paid sick leave laws enacted in other jurisdictions in recent years, mostly at the city level, including in Seattle in 2012, in Portland, OR in 2013, and in Eugene, OR in 2014.

Under the California law, most California employees who work 30 or more days within a year will accrue one hour of paid sick leave at their regular rate of pay for every 30 hours worked.  The law also imposes new notice and recordkeeping requirements onto California employers.

The law allows employees to carry over accrued paid sick days from one year to the next.  Employers, however, are allowed to limit an employee’s use of paid sick days to 24 hours or three days a year and to cap accrued paid sick leave at either 48 hours or 6 days.  While an employer is not obligated to pay out accrued but unused paid sick leave at termination, if an employee separates from an employer and is rehired within one year from the date of separation, previously accrued and unused paid sick days must be reinstated.  If an employer already has a paid leave policy or paid time off policy, it is not required to provide additional paid sick days under the new law so long as its existing policy satisfies certain requirements, including making available an amount of leave that may be used for the same purposes and under the same conditions as specified in the Act.Continue Reading California Enacts State-Wide Paid Employee Sick Leave Law

In Taylor Patterson v. Domino’s Pizza, LLC, the California Supreme Court restricted the ability of a franchisee’s employees to sue the franchisor based on theories of vicarious liability and the theory that the franchisor was an “employer” under California’s Fair Employment and Housing Act (“FEHA”). With this decision, franchisors can breathe a sigh of relief as the Supreme Court’s decision could have opened the flood gates for employment claims brought by employees seeking a recovery from the perceived “deep pocket” franchisor.

The plaintiff in Taylor alleged that she was sexually harassed by her supervisor while employed at a Domino’s Pizza franchise owned and run by a company called Sui Juris. She subsequently filed suit against her supervisor, Sui Juris, and the franchisor, Defendant Domino’s Pizza Franchising, LLC (“Domino’s”). Plaintiff’s claims against Domino’s were premised on the theory that Domino’s was her and her supervisor’s employer.Continue Reading California Supreme Court Clarifies When a Franchisee’s Employees Can Bring Employment Claims Against the Franchisor in Taylor Patterson v. Domino’s Pizza, LLC

Last week, the 9th Circuit held in two related cases from California and Oregon that FedEx misclassified approximately 2,600 delivery truck drivers as independent contractors, rather than as employees. The cases—Alexander v. FedEx and Slayman v. FedEx—are an important reminder for employers that reality matters more than labels when it comes to classifying workers. 

On that note, the most succinct (and most memorable) summary of the rulings appears in Judge Trott’s short concurrence in Alexander:

“Abraham Lincoln reportedly asked, ‘If you call a dog’s tail a leg, how many legs does a dog have?’ His answer was, ‘Four. Calling a dog’s tail a leg does not make it a leg.’ . . . Labeling the drivers ‘independent contractors’ in FedEx’s Operating Agreement does not conclusively make them so . . . .”

The two cases dealt with virtually identical facts. FedEx’s Operating Agreement (“OA”), which principally governed its business relationships with the 2,300 California drivers and 363 Oregon drivers in each class, contained several generalized clauses that suggested the drivers were independent contractors. For example, the OAs provided that “the manner and means of reaching [the parties’ “mutual business objectives”] are within the discretion of the [driver], and no officer or employee of FedEx . . . shall have the authority to impose any term or condition on the driver . . . which is contrary to this understanding.” The two opinions noted, however, that neither California nor Oregon law views a contract’s description of a worker as an independent contractor as dispositive of the worker’s true status.Continue Reading 9th Cir. Finds FedEx Delivery Drivers Are Employees, Not Contractors

Here’s something that should be at the top of your to do list on this Monday morning:  make sure your benefits and other employee policies are in compliance with new guidance from the IRS that becomes effective today relating to federal tax treatment of same-sex marriages under the U.S. Supreme Court’s decision in U.S. v. Windsor.  In Windsor, the Supreme Court struck down provisions of the Defense of Marriage Act (“DOMA”), which had prohibited recognition of same-sex marriages under federal law. That decision has several implications for employers, including application of employee leave laws such as the Family Medical Leave Act (“FMLA”), which we blogged about recently.

Since the Windsor ruling, federal agencies have been busy carrying out President Obama’s directive to update regulations and guidance accordingly.  On August 29, the IRS issued Revenue Ruling 2013-17 and two sets of FAQs (here and here), advising how the IRS will treat same-sex marriages for federal tax purposes. (Windsor was, after all, a tax case, in which the issue was whether the IRS was allowed to disregard a same-sex marriage for federal estate tax purposes).  The guidance becomes effective today, September 16, 2013.

Under that new guidance, the IRS will apply the marriage laws of the state or country in which the marriage was celebrated (‘state of celebration”) to determine if the couple is validly married for federal tax purposes, including tax and other issues relating to employee benefits.  Under the new IRS guidance, any same-sex marriage validly entered into in any state or foreign country that allows same-sex marriage will be recognized by the IRS for income, estate, and other tax purposes, even if the couple does not live or work in a state that recognizes the marriage.  For example, if a same-sex couple is married in Washington (or Canada), which recognizes same-sex marriage, and then moves to Oregon, which currently does not, the couple will still be considered married for federal tax purposes.Continue Reading Employers Should Review Benefits Plans And Other Policies Affecting Employees In Same-Sex Marriages As New IRS Guidance Implementing U.S. Supreme Court’s Windsor Decision Becomes Effective Today, September 16, 2013

Coming as no big surprise since other states, like Utah and California, have been passing similar laws, the President of the Oregon Senate recently signed the final version of HB 2654, which will prohibit Oregon employers from compelling employees or applicants to provide access to personal social media accounts, like FaceBook or Twitter.  The law will also keep off limit to employers other sites that allow users to create, share or view user-generated content (like videos, still photos, blogs, videos, podcasts or instant messaging, email or website profiles), and also prohibits requiring that employees allow the boss to join or "friend" them on social media sites.  It also prohibits retaliation against any employee or applicant who refuses to provide access to accounts or to add the employer to his or her contacts list. The law becomes effective in January 2014.

Specifically, under the new law Oregon employers will not be allowed to:

  • Require or ask an employee or applicant to share a username or password allowing access to a personal social media account;
  • Require employees or applicants to add their employers to their contacts or friends lists;
  • Compel employees or applicants to access the accounts themselves to allow the employer to view the contents of a personal social media account;
  • Take or threaten to take any action to discharge, discipline or otherwise penalize an employee who refuses to share their account access information, allow their employer to view content, or add the employer to their contact or friends list (or fail or refuse to hire an applicant for the same things).

Continue Reading Oregon Legislature Passes HB 2654 Prohibiting Employers From Requiring Access To Employee Social Media Accounts

In 2014, Washington health care employers will be required to comply with the Department of Labor and Industries’ (“L&I’s”) new Hazardous Drugs Rule.   While today that may seem like the distant future, savvy employers will take time in 2013 to implement measures in compliance with the new rule before the deadline to do so creeps up.

What is the Hazardous Drugs Rule?

The Hazardous Drugs Rule is designed to protect employees of health care facilities in Washington from occupational exposure to hazardous drugs. For purposes of the Rule, the term “health care facilities” includes not only hospitals and clinics, but also pharmacies, nursing homes, home health care agencies, veterinary practices, and some research laboratories. The Rule’s protections extend beyond medical providers, pharmacists, and the like to encompass all employees who may be exposed to hazardous drugs. For example, a janitorial employee’s duties may include disposal of discarded medications or similar exposure to hazardous drugs.

Hazardous drugs include any drug identified by the National Institute for Occupational Safety (“NIOSH”) in its list of antineoplastic and other hazardous drugs in health care settings, which can be found at: http://www.cdc.gov/niosh/docs/2012-150/. In addition, hazardous drugs can include any other drug that can damage DNA or cause cancer, birth defects, fertility problems, or organ toxicity at low doses. Common examples of drugs considered to be hazardous under the Rule are chemotherapy drugs, birth control pills, and certain anti-depressants.Continue Reading Countdown to Washington’s New Hazardous Drugs Rule

We continue our recent end-of-year postings (on new California employment laws and things every employer should resolve to do in 2013) with an update on recent cases by the National Labor Relations Board ("NLRB" or "Board").  In late December, 2012, the NLRB issued a series of controversial decisions which from an employer’s perspective cannot be considered Christmas presents.  While some of these cases impact only narrow circumstances, each of the decisions dramatically changes the law, always in ways adverse to employers. 

The Board’s December 2012 Decisions

In Alan Ritchey, Inc., the Board created an entirely new obligation for employers operating a workplace where a union has been recognized or certified, but no collective bargaining agreement has yet been agreed to. In this setting, the Board concluded, an employer must notify the union and provide it with an opportunity to bargain over individual discretionary discipline before the discipline is imposed. The Board made clear that this obligation requires sufficient advance notice for meaningful bargaining. Moreover, the employer must respond to union requests for information regarding the discipline before such meaningful bargaining can occur. The Board dismissed concerns that the new obligation it had created would be unduly burdensome for employers, suggesting that there may be circumstances in which an employee could be removed from a job prior to bargaining, when leaving employee on the job might present “a serious imminent danger to the employer’s business or personnel.”Continue Reading Obama NLRB Presents Employers With Several Lumps Of Coal

In its long-anticipated decision in Brinker v. Superior Court, a unanimous California Supreme Court has clarified the scope of an employer’s obligation to provide meal and rest breaks to non-exempt employees in California.  The Court’s full opinion is available here.

Meal Breaks

California law requires employers to provide employees with a meal period of not …