Employment

On July 3, 2024, the Federal District Court in the Northern District of Texas in Ryan LLC v. Federal Trade Commission granted a preliminary injunction staying the effective date of the FTC’s non-compete rule and enjoining the FTC from enforcing it against the specific plaintiffs who challenged it (Ryan, LLC, the US Chamber of Commerce, and a few other business groups which were previously permitted to intervene in the lawsuit).  The Court declined to enter a nationwide injunction, and, absent additional legal developments or a voluntary nationwide stay by the FTC, the non-compete rule is still set to go into effect on September 4, 2024 for all other covered employers.  In its decision, the Court indicated that it intends to rule on the merits of the case by August 30, 2024, in advance of the rule’s September 4, 2024 effective date. 

Major changes to PAGA are now official. Most importantly:

• Employees must have experienced each of the alleged violations to have standing to sue;
• Employers can correct inaccuracies on paystubs without penalty; and 
• Employers who take specific steps to prevent Labor Code violations will be able to substantially reduce liability. 

Maryland was one of the first states to implement a pay transparency law in 2020, and now it joins several states in broadening that law to require employers to disclose a wage range for open positions (Washington, D.C.’s pay transparency law, for example, which we wrote about here will become effective on June 30, 2024).  Since 2020, employers in Maryland have been required to provide, when requested by an applicant, the wage range for the position to which the applicant applied. Maryland will now require employers to proactively disclose in their public and internal job postings the wage range for the position. Maryland’s new law will go into effect on October 1, 2024.

On June 18, 2024, Governor Newsom, in collaboration with legislative leaders, unveiled a landmark agreement to reform the Private Attorneys General Act (PAGA). 

Mintz’s Employment Practice will continue to monitor any future developments and legal challenges and remains ready to assist employers with compliance with the PWFA and the EEOC’s final rule.

A gentle reminder for California employers: the clock is ticking on your obligations to prepare a workplace violence prevention plan and conduct a training session on that plan under California’s new violence prevention plan law (SB 553). 

The Federal Trade Commission (FTC)’s new rule to ban most post-employment non-compete agreements could significantly impact M&A and private equity transactions. Assuming it withstands legal challenges, the rule will require buyers and private equity sponsors to rethink many of their asset protection strategies.