There's more than one way to skin a cat … or at least that's what many employers are hoping. Yesterday, the Federal Trade Commission turned the workplace on its head by banning nearly all non-compete agreements. I'm not going to summarize the FTC's ...
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FTC bans all non-competes … Now what?

There's more than one way to skin a cat … or at least that's what many employers are hoping.

Yesterday, the Federal Trade Commission turned the workplace on its head by banning nearly all non-compete agreements.

I'm not going to summarize the FTC's Rule; your inboxes and LinkedIn feeds will be flooded with plenty of those … including this one we sent out this morning.

Suffice it to say that 120 days from the publication of the Rule in the Federal Register, employers will no longer be able to enforce any non-compete agreements except for those already in place with senior execs earning $151,164 or more annually.

Employers that want to continue locking down key employees to prevent them from jumping ship to competitors will now turn to us employment lawyers to find new and creative ways to get around the FTC's ban. The FTC's Rule seems to have that covered, too.

The Rule's definition of "non-compete clause" does not just include agreements that prohibit someone from working for a competitor, but also those that "penalize" someone for doing so.

"Penalize," the FTC explains, includes any agreement that would divest a worker of compensation upon a breach or require a forfeiture-upon-breach, including equity awards or deferred compensation. In other words, if an employee would interpret your agreement as requiring them to sit out of the market or forsake job opportunities because they don't want to give something up in exchange, the FTC will view your agreement as invalid.

There will be litigation over this Rule and SCOTUS will almost certainly have the final word. I remain highly skeptical that this Rule will ever take effect. For now, there is nothing to do other than arming yourself with knowledge of the Rule’s existence (which you’ve now done) so that you can watch and wait for further instructions. In the meantime, we employment lawyers will earn our stripes figuring out how to skin the non-compete cat, just in case.

WIRTW #714: the ‘today's post is brought to you by the letters W, G, and A' edition

"No one wants to see a picket line on Sesame Street," said Writers Guild President Lisa Takeuchi Cullen.

Earlier this week, Writers Guild members at Sesame Workshop unanimously voted to authorize a strike if management does not agree to a new collective bargaining agreement before their current contract expires later today. Absent a deal, picketing will begin on April 24.

The writers are seeking industry standard annual raises, improvements to residuals, and union coverage for Sesame Workshop's animation and social media segments.

Anyone who follows me on the regular knows that I'm no fan of labor unions. The demands of these writers, however, seem fair and reasonable. They will also have public sentiment on their side.

"Millions of parents and families around the world are going to have a lot of questions," said Lisa Takeuchi Cullen. "They might ask why the bosses at Sesame Workshop are ignoring their company's own messages of kindness and fairness."

Ouch. Your business has a serious problem when your actions don't match stated values. And that's brought to you by the letters, B, A, and D.


Here's what I read and listened to this week that you should, too.

The New Kid — via The Norah and Dad Show



Abolish DEI Statements — via The Atlantic



Evil HR Lady: four hot takes on hot topics in HR — via Evil HR Lady, Suzanne Lucas


NLRB General Counsel’s Expansion of Remedies Could Pose New Liabilities and Headaches for Employers Who Simply Enforce Their Policies — via Management Writes




Should You Let AI Recommend Beer? — via PorchDrinking

Supreme Court eases path for employees to sue employers for discriminatory job transfers

In a unanimous decision, the Supreme Court held that an employee alleging a discriminatory job transfer need not show the suffering of a "materially significant" disadvantage. Instead, the employee need only show "some injury respecting her employment terms or conditions."

The case involved a police sergeant forced to transfer out of her position in the department's intelligence division. The employer claimed that she could not establish a Title VII volitation because the transfer did not result in a diminution of her pay. 

SCOTUS disagreed, as Justice Kagan wrote for the majority:

Muldrow need show only some injury respecting her employment terms or conditions. The transfer must have left her worse off, but need not have left her significantly so. And Muldrow's allegations, if properly preserved and supported, meet that test with room to spare. …

She was moved from a plainclothes job in a prestigious specialized division giving her substantial responsibility over priority investigations and frequent opportunity to work with police commanders. She was moved to a uniformed job supervising one district's patrol officers, in which she was less involved in high-visibility matters and primarily performed administrative work. Her schedule became less regular, often requiring her to work weekends; and she lost her take-home car. If those allegations are proved, she was left worse off several times over.

This decision makes legal sense, but I agree Justice Alito, who, in his concurring opinion, said the quiet part out loud:

I see little if any substantive difference between the terminology the Court approves and the terminology it doesn't like. The predictable result of today's decision is that careful lower court judges will mind the words they use but will continue to do pretty much just what they have done for years.

In other words, legal standards with wiggle room leave room for judges to do what they want as long as they can find some facts in the record to support their decision. Perhaps that's the more significant takeaway here than the actual holding of the case itself.

EEOC makes is clear that the Pregnant Workers Fairness Act covers unpaid time off for abortions

From this point forward, if an employee needs an unpaid leave of absence to obtain and recover from an abortion, you better give it her. I realize this topic is divisive, but this issue is no longer subject to debate.

Earlier this week, the EEOC published its final regulations implementing the Pregnant Workers Fairness Act. Pre-publication, agency considered 94,000 comments urging it either to exclude or include "abortion" from the Act's definition of "pregnancy, childbirth, or related medical conditions." The EEOC chose the latter. Here's why.

According to the EEOC, "The term 'abortion' is included in the regulation's definition of 'pregnancy, childbirth, or related medical conditions' for the limited purpose of determining whether an employee qualifies for a workplace accommodation under the PWFA."

The agency added: "The PWFA is a workplace anti-discrimination law. It does not regulate the provision of abortion services or affect whether and under what circumstances an abortion should be permitted. The PWFA does not require any employee to have—or not to have—an abortion, does not require taxpayers to pay for any abortions, and does not compel health care providers to provide any abortions. The PWFA also cannot be used to require an employer-sponsored health plan to pay for or cover any particular item, procedure, or treatment, including an abortion. The PWFA does not require reasonable accommodations that would cause an employer to pay any travel-related expenses for an employee to obtain an abortion."

There's A LOT more to digest in the 408 pages of regulations, but given the ongoing and (d)evolving discourse around this one particular issue, it's worth calling it out for special attention.

One bourbon, one union election, and one Cemex bargaining order

One bourbon, one union election, and one bargaining order … is what an NLRB ALJ told Woodford Reserve Distillery last week. The judge held that the distillery violated federal labor law by undermining its employees' unionization efforts and ordered the distillery to bargain with its employees as their remedy.

Shortly after the employer learned of its employees' unionization efforts and within a month of the election, the employer announced a $4 per hour raise and changes to its raise and vacation policies, and also gifted bottles of bourbon to its employees. The NLRB ALJ noted that employees called these to be "bribes," which worked because "interest in the campaign plummeted immediately after." The union went from having signed authorization cards from 36 of 60 employees to losing the election by a vote of 45 to 14, a 62% decrease in support.

The ALJ wrote, "In light of the violations and their lasting effect on employees, I do not believe that traditional remedies will sufficiently deter their recurrence." As a result, he ordered the employer to bargain with the employees instead of ordering a re-run election.

This is what the future of union elections looks like. Recall that the NLRB's recent Cemex decision authorizes the NLRB to certify the union as the employees' representative and issue a bargaining instead of directing a second, re-run election if an employer commits any unfair labor practice prior to an election that would require the Board to set the election aside. The Woodford Reserve case shows this new legal standard in action.

Bargaining orders are the future of NLRB union elections. Just ask Woodford Reserve. And if you're not running clean campaigns to oppose your employees' unionization efforts, you will likely find yourself in the same place as Woodford Reserve, sitting across the bargaining table from your employees no matter the result of the election.

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