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Employment Law
maintain a noncompete with a worker; or, represent to a worker, under certain circumstances, that the worker is subject to a noncompete.
Importantly, the term “worker” is broad and includes an: “independent contractor, extern, intern, volunteer, apprentice, or sole proprietor who provides a service to a client or customer.” Similarly, the scope of prohibited agreements includes any: “contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.” The FTC gave two examples of such “de facto” non-competition clauses:
1. A non-disclosure agreement that is written so broadly that it effectively precludes the worker from working in the same field after the conclusion of the worker’s employment with the employer.
2. A contractual term between an employer and a worker that requires the worker to pay the employer training costs if the worker’s employment terminates within a specified time period -- where the required payment is not reasonably related to the actual costs incurred by the employer.
The FTC’s proposed rule will pre-empt any inconsistent state law. It will also require active steps by employers to rescind existing agreements. Under the rule, employers would be required to rescind previously entered non-compete provisions and provide notice on paper or in a digital format (text or e-mail) that the agreement is no longer in effect and will not be enforced.
The FTC is accepting public comments on the proposed rule through March 10, 2023. The final rule will follow at some point thereafter but almost certainly be subject to extensive litigation in federal court.
4. Pregnant employees will be entitled to reasonable accommodations.
On December 29, 2022, President Biden signed a government funding bill that included the Pregnant Workers Fairness Act. One of the primary purposes of the PWFA is to provide workplace accommodations for pregnant employees that might not otherwise be available under existing law. The accommodation process under the PWFA is expected to mirror the ADA – it will not require elimination of essential functions of a job and accommodations won’t be required if they impose an “undue hardship.”
The PWFA goes into effect on June 27, 2023 and requires employers with 15 or more employees to provide reasonable accommodations to job applicants and employees with conditions related to pregnancy or childbirth. The PWFA makes it an unlawful employment practice to:
1. not make reasonable accommodations to the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee, unless such covered entity can demonstrate that the accommodation would impose an undue hardship on the operation of the business of such covered entity;
2. require a qualified employee affected by pregnancy, childbirth, or related medical conditions to accept an accommodation other than any reasonable accommodation arrived at through an interactive process;
3. deny employment opportunities to a qualified employee if such denial is based on the need of the covered entity to make reasonable accommodations to the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee;
4. require a qualified employee to take leave, whether paid or unpaid, if another reasonable accommodation
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FDCC ANNUAL INSIGHTS 2023