Released September 20, 2024

NEW LAWS ENACTED

  • New York’s governor signs into law the Retail Worker Protection Act requiring retail employers to enact anti-violence policies, implement annual training, and more.
  • Illinois enacts the Worker Freedom of Speech Act to prohibit employers from taking adverse employment actions against employees who decline to attend or participate in meetings or receive communications that are designed to convey the employer’s position on religious or political matters.
  • Massachusetts and Vermont enact pay transparency laws requiring employers to disclose pay ranges in job postings. Massachusetts’ law, which applies to employers with 25 or more employees, additionally requires employers to disclose the pay range to employees offered a promotion or upon request of the employee.

COURT & AGENCY NEWS

  • The S. District Court for the Northern District of Texas grants the plaintiff’s motion for summary judgment and sets aside the FTC’s rule banning noncompete agreements, which prevents the rule from taking effect on September 4, 2024.
  • The S. Department of Justice announces its Corporate Whistleblower Awards Pilot Program to award whistleblowers who provide original, truthful information about corporate criminal conduct that results in a successful forfeiture. Awards consist of a percentage of the forfeited assets.
  • A U.S. federal district court recently denied a legal challenge to the S. Equal Employment Opportunity Commission’s 2024 Enforcement Guidance on Harassment in the Workplace. At the heart of the legal challenge was the part of the EEOC’s guidance related to the application of federal law to various scenarios based on sexual orientation and gender identity.

New York Governor Signs Workplace Violence Prevention Bill for Retail Employers 

New York’s governor has signed a new workplace violence prevention law requiring retail employers to adopt anti-violence policies, implement annual training, and more.

The Retail Worker Safety Act applies to organizations with at least 10 retail employees. “Retail” does not include restaurants or other stores that are “primarily engaged in the sale of food for consumption on premises.”

Much like California’s recently enacted workplace violence law, New York’s law requires workplace violence training as well as a host of other steps that employers must take, such as developing a workplace violence prevention policy, installing panic buttons at the retail location (only for companies with 500 or more retail employees), and more. The law includes several requirements for covered employers including but not limited to:

  1. Written Policy. Prepare a written policy that includes a list of identified risk factors and methods to prevent violence in the workplace, among other topics. This policy must be provided to employees in writing when hired and once annually thereafter. The New York Department of Labor will create and publish a model policy that employers must either adopt or follow as a template for their required workplace violence policies.
  2. Training. Provide training and information to employees on the risks of workplace violence. Training must be provided to all retail employees upon hire and subsequently on an annual basis. Training must include, but is not limited to, the following topics:
    • Examples of protective measures that retail workers can employ when in a dangerous situation.
    • De-escalation tactics.
    • Active shooter drills.
    • Emergency procedures.
    • Instructions on how to use panic buttons, emergency devices, security alarms, etc.
    • Site-specific list of emergency exits and meeting places.
  3. Panic Buttons. For employers with 500 or more retail workers nationwide, employers must install panic buttons that immediately dispatch local law enforcement.

Effective Date: The new law will go into effect on March 3, 2025. The panic button requirement (for applicable employers) becomes effective January 1, 2027.

Illinois Passes Law Prohibiting “Captive Audience” Meetings

Joining several other states that have recently passed similar legislation to limit so-called “captive audience” meetings, Illinois recently enacted the Worker Freedom of Speech Act, which will take effect on January 1, 2025. The new law prohibits employers from disciplining, penalizing, or discharging employees who refuse to attend employer-sponsored meetings or receive communications intended to convey the employer’s position on religious or political matters, including union-related topics. The law also bars employers from incentivizing attendance at these meetings.

The Act broadly defines “political matters” to include elections, political parties, and the decision to support labor organizations. It also protects employees who report suspected violations of the law. Illinois joins other states such as Maine, Connecticut, Minnesota, New York, and Oregon, that have enacted similar legislation, as covered in our September 2023 edition of the Brief.

Aggrieved employees can file lawsuits for violations, with potential remedies including backpay, reinstatement, and attorney’s fees. Additionally, the Illinois Department of Labor can investigate and impose penalties for violations. Federal court challenges to the law’s constitutionality are pending.

Massachusetts and Vermont Become Latest States to Pass Pay Transparency Law

Massachusetts and Vermont have recently joined a growing number of states implementing pay transparency laws, with both laws set to take effect in 2025. 

Vermont: Signed into law on June 4, 2024, Vermont’s H.704 requires employers with five or more employees to disclose salary ranges in job advertisements starting July 1, 2025. The law defines “range of compensation” as the good faith expectation of the minimum and maximum annual salary or hourly wage for the position. Employers hiring for commission-based or tipped positions must also provide additional information in job postings. The Vermont Attorney General will publish guidance by January 1, 2025. Enforcement of the law will be handled by the Attorney General’s Office, with civil penalties for violations.

Massachusetts: Governor Maura Healey signed H.4890 on July 31, 2024, which will require employers with 25 or more employees to disclose pay ranges in job postings by July 31, 2025. In addition to job postings, employers must provide pay ranges for promotions, transfers, and upon request by employees or applicants. The law also mandates pay data reporting for employers with 100 or more employees starting February 1, 2025. Noncompliance can result in fines ranging from warnings to $1,000 for repeated violations, and the Massachusetts Attorney General will oversee enforcement.

Both states’ laws are part of a broader trend towards increased transparency in compensation, as lawmakers seek to address pay equity and fairness in the workplace.

U.S. District Court Sets Aside FTC Non-Compete Ban

In Ryan LLC v. FTC, the U.S. District Court for the Northern District of Texas issued a ruling on August 20, 2024, setting aside the Federal Trade Commission’s (FTC) Non-Compete Clause Rule, which was set to take effect on September 4, 2024. The court held that the FTC lacked statutory authority to promulgate the rule and found the rule to be arbitrary and capricious under the Administrative Procedure Act (APA). The court ruling, which applies nationwide, prevents the enforcement of the rule that sought to ban nearly all non-compete agreements, with limited exceptions.

The court’s decision hinged on two primary legal conclusions. First, it determined that Section 6 of the FTC Act does not grant the agency the authority to issue substantive rules governing unfair competition. Second, it found that the rule was arbitrary and capricious due to the FTC’s reliance on “flawed empirical evidence” and its failure to consider less “sweeping” alternatives. The court noted that the rule’s broad scope, without a rational explanation, made it unreasonable.

As a result, the FTC rule will not take effect as scheduled. However, the legal battle is ongoing, with the FTC expected to appeal the decision. Employers will continue to monitor this evolving legal matter—as well as state-specific non-compete restrictions—as further legal developments could affect the enforceability of such agreements.

The U.S. Department of Justice Launches Whistleblower Pilot Program

The U.S. Department of Justice (DOJ) has launched the Corporate Whistleblower Awards Pilot Program, effective August 1, 2024, to incentivize individuals to report corporate criminal misconduct. The program offers whistleblowers a percentage of forfeited assets if their original, truthful information leads to a successful forfeiture exceeding $1 million. The program focuses on four key areas: violations by financial institutions, foreign and domestic corruption, and health care fraud involving private insurance.

The pilot program aims to fill gaps left by other federal whistleblower programs and encourages employees to report internally first. Companies that act on internal reports and self-disclose misconduct to the DOJ within 120 days may qualify for a presumption of non-prosecution. The program will be in effect for three years, with awards managed by the DOJ’s Money Laundering and Asset Recovery Section (MLARS).

One of the Many Legal Challenges to the U.S. EEOC’s New Enforcement Guidelines Is Denied

A U.S. federal district court recently struck down a legal challenge to the U.S. Equal Employment Opportunity Commission’s (EEOC) 2024 Enforcement Guidance on Harassment in the Workplace, which clarified that federal laws prohibiting sex discrimination under Title VII also protect against discrimination based on sexual orientation and gender identity. The court denied Texas’ request to invalidate the guidance but stopped short of ruling on the lawfulness of the EEOC’s guidance. Texas and other states are expected to file new lawsuits challenging the guidance.

The 2024 guidance states that harassment based on sexual orientation or gender identity, such as misgendering, denying access to bathrooms aligned with an individual’s gender identity, or other forms of discriminatory conduct, is unlawful under Title VII. Although the guidance remains in effect, multiple states have filed lawsuits arguing that the EEOC has overstepped its authority by expanding Title VII protections beyond what the Supreme Court’s Bostock v. Clayton County decision authorized. The outcomes of these challenges are pending. 

Disclaimer: this information is not intended as legal advice. Please consult with legal counsel to ensure your organization’s compliance with applicable legal requirements.