California non-compete law has just been shaken-up—and the ripples are likely to travel across the country. For decades and save for narrow exceptions, California Business and Professions Code § 16600 has made post-employment non-competes unenforceable due to their potential to unduly restrain an individual’s business or profession. Effective January 1, 2024, however, Senate Bill 699 (“SB 699”) drastically expands both the protections and the reach of California’s prohibition on employee non-competes.

Specifically, SB 699:

  • prohibits an employer or former employer from even attempting to enforce a contract that is void under Section 16600;
  • grants current, former, and even prospective employees a private right of action for damages and injunctive relief—and to recover attorney’s fees and costs; and
  • applies to all non-competes “regardless of where and when the contract was signed.”

Continue Reading Will California’s SB 699 Shake Up Non-Compete Law Everywhere?

In its decision in Students for Fair Admissions, Inc. v. President & Fellows of Harvard College and Students for Fair Admissions v. University of North Carolina[1] issued on June 29, 2023, the Supreme Court held that the undergraduate admissions programs of Harvard College and the University of…

Continue Reading Considerations for Employers Following the EEOC’s Response to the Supreme Court’s Ruling on Race-Conscious College Admissions

Introduction

On 10 May, the Department for Business and Trade (the “DBT”) released the regulatory reform update “Smarter Regulation to Grow the Economy” – the first in a series of updates on how the government intends to reform regulations to support economic growth.  This first package…

Continue Reading UK Employment Law: Government plans to cut Red Tape for UK Businesses

In March 2023, Deputy Attorney General Lisa Monaco and Assistant Attorney General Kenneth Polite of the Criminal Division announced a three-year Pilot Program on Compensation Incentives and Clawbacks. A group of Covington attorneys recently published an article with Bloomberg that offers practical guidance for companies looking to stay ahead…

Continue Reading DOJ on Clawbacks: Compliance and Compensation

Employment law in Ireland has been particularly dynamic in recent years.  Covid and its aftermath transformed the workplace and created a more determined approach to employment regulation. In consequence we now have a raft of new legislation and associated workplace codes of practice. Continue Reading Recent Employment Law Developments in Ireland

2023 will likely see employment lawyers and HR professionals (in the UK and further afield) grappling with a number of key employment-related legal and policy developments. In this alert we highlight some of the most important ones.

  1. Brexit: The Employment Law Fallout

When the UK left the European Union on…

Continue Reading UK Employment: Top Five Hot Topics in 2023

Recent legislation allows employers to continue offering first-dollar telehealth coverage without jeopardizing the ability to contribute to a health savings account (“HSA”), but only through the end of the 2024 plan year.

Background – HSA Eligibility

Employees can make and receive pre-tax contributions to HSAs to use for qualified medical expenses. To be “eligible” to make or receive contributions to an HSA, you (a) must be covered by a high deductible health plan (“HDHP”), and (b) may not have other non-HDHP coverage that covers benefits before the HDHP deductible has been met.

Certain types of coverage, like dental and vision care, is disregarded in determining whether an individual is “eligible” to contribute to an HSA. Disregarded coverage does not have to be coordinated with HDHPs. This means that participants can receive “first-dollar” coverage for disregarded coverage and still be eligible to make or receive contributions to an HSA.Continue Reading Employers Can Continue to Cover Telehealth Benefits Before HDHP Deductible Is Met

As we discussed in a previous post, effective January 1, 2023, California employers must include pay scales in job postings, and a similar bill in New York was awaiting signature by Governor Kathy Hochul. The California Labor Commissioner has now issued guidance to assist employers in complying with the new law, and the New York State bill was signed into law on December 21, 2022 and is set to take effect on September 17, 2023.Continue Reading Update on California and New York Pay Transparency Laws

On January 5, 2023, the Federal Trade Commission (“FTC”) issued a groundbreaking proposed rule that would, if finalized:

  • prohibit most employers from entering into non-compete clauses with workers, including employees and individual independent contractors;
  • prohibit such employers from maintaining non-compete clauses with workers or representing to a worker that the worker is subject to a non-compete clause; and
  • require employers to rescind any existing non-compete clause with workers by the compliance date of the rule and notify the affected workers that their non-compete clause is no longer in effect.

The FTC’s notice of proposed rulemaking explains that the FTC considered possible limitations on the rule—such as excluding senior executives or highly paid employees from the ban—but it ultimately proposed a categorical ban on post-termination non-competes.  The only exception is for non-competes related to the sale of a business.  However, even this exception is unusually narrow: it would only apply to selling business owners who own at least 25% percent of the business being sold.  (The proposal also would not apply to most non-profits, certain financial institutions, common carriers, and others who are also outside the scope of FTC regulation.)Continue Reading FTC Proposes Rule to Ban Most Non-Competes

On October 1, 2022, the District of Columbia’s new ban on non-compete agreements (the Ban on Non-Compete Agreements Amendment Act of 2020, as amended by the Non-Compete Clarification Amendment Act of 2022 (the “Act”)) went into effect. The final version of the Act is far less restrictive than originally anticipated and permits non-competes with highly compensated employees, non-competes paired with long-term incentives, and certain anti-moonlighting policies.

Key Takeaways

  • As of October 1, 2022, non-competes are prohibited in the District with limited exceptions.
  • Generally, employers can still enter into the following types of non-competes with District employees:
    • Non-competes with highly compensated employees that do not exceed one year; provided 14 days’ advance notice is given to the employee. 
    • Non-competes paired with a long-term incentive.
    • Non-competes entered into in connection with the sale of a business.
  • The Act permits specified workplace policies like confidentiality or non-disclosure policies, anti-moonlighting policies/outside employment restrictions, and conflict of interest policies. However, the employer must provide the policies to employees before October 31, 2022, within 30 days after acceptance of employment, and any time such policy changes.
  • Violations of the Act carry both administrative penalties and civil liability.
  • Prohibited non-compete agreements in effect before October 1, 2022, are not subject to the Act and remain in effect. However, employers should consult with legal counsel before amending these agreements.
  • Non-solicitations of customers and employees are not explicitly considered non-competes under the Act.
  • The Act does not apply to the terms of a valid collective bargaining agreement.

Continue Reading D.C.’s Scaled-Back Non-Compete Ban Is In Effect