For those who haven’t yet checked out for their “Summer Friday” and are looking for some fun legal content (that doesn’t involve Johnny Depp or Amber Heard), we got you. This week, we’re discussing military leave (in honor of Memorial Day), summer internships (you’ll want to read this one!), and employment laws in both NY and NJ. New Jersey employers – hold onto your non-competes for this update . . .
Sun, Surf, and Summer Internships are Right Around the Corner
For many employers, the week after Memorial Day Weekend marks the first week of summer internship season. We get it, free labor is nice, but gone are the days when you can essentially “hire” a part-time employee for the summer, call them an “intern”, and not pay them. If you do have interns, you should be mindful of the amount of the stipends (if any) or wages you pay your interns (especially if they amount to less than minimum wage), and, if you don’t pay your interns, be careful about misclassifying them as interns when, in reality, they may be employees just like everyone else. Also, make sure you’re monitoring the number of hours they’re doing.
One of the main legal standards governing unpaid internships is the “primary beneficiary” test. Under this test, whether an intern is truly an “intern” depends on a variety of factors, such as whether the work compliments the intern’s education, whether the training is comparable to training that would be received at an educational institution, and whether the intern’s work complements (but doesn’t replace) other employees’ work. No one factor is determinative, so if you aren’t careful you can run into some significant wage and hour issues. Make sure you’re very clear on what work your interns are – and are not – doing.
New Jersey Employment Non-Compete Provisions at Risk
A proposed law severely restricting the use of non-competes in New Jersey employment agreements was recently introduced in the State Assembly. Non-competes are commonly included in employment agreements with the purpose of restricting an employee’s ability to work for a competitor for a certain period of time following the employee’s separation of employment. They can be a very useful tool for employers.
The proposed law seeks to, among other things, limit the duration of restricted periods to one year (on the “short” end), apply to both employees and independent contractors (these are way more common with employees), and require mandatory “garden leave” in which the employer would need to pay the employee during the applicable restricted period (employers don’t have to pay anything now, unless they want to, so this is a big deal). The proposed law also seeks to limit non-solicitation protections, permitting a former employee to work for and service a former employer’s customers so long as the customer reaches out to the former employee first. In other words: non-competes as we know them might get a major facelift.
We’re watching this proposed legislation very closely and will update you on new developments, especially if the bill is passed. In the meantime, it might be worth reviewing your non-competes to see how they work. You may even want to consider alternative strategies for protecting your business (for example: stronger confidentiality provisions or focusing on non-solicits).
New York Enacts Adult Survivors Act
The “Me Too” movement sparked a wave of new laws in recent years governing sexual abuse and sexual harassment. For example, New York’s Adult Survivors Act was signed into law earlier this week. Pursuant to the Act, victims of sexual offenses whose claims would otherwise be time-barred, now have a one-year window to bring claims against any individual who committed the sexual offense(s), as well as any institution, business, or other organization associated with that individual. The law adopts the broad definition of “sexual offenses” in the New York Penal Law, which includes misconduct ranging from forcible sexual intercourse to touching. Claims that were previously dismissed for being time-barred are now fair game. The window is expected to open on November 24, 2022, and we expect to see sexual offense-related claims flood right in. Indeed, if this all sounds familiar, it’s because it is: a similar law enacted in 2019 involving victims who were under eighteen years of age, the Child Victims Act, resulted in over 10,000 lawsuits being filed in just two years.
For business owners: review your records and determine if there were any prior sexual abuse/misconduct allegations and dig up any insurance policies in place during that time period. These will be critical in the defense of any revived claims. It’s best to start gathering any relevant documents now, before the revival window officially opens in November.
Ringing the Shame Bell for Employers Who Fail to Comply with Military Leave Laws
Did you know that “military status” is a specific class protected from discrimination? Neither did Amazon (allegedly) . . .
The tech giant was recently hit with a class action discrimination lawsuit under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), after it reportedly fired employees for taking military leave. The plaintiff alleged that she was fired for taking unpaid time off to attend weekend drills as part of her military service with the Alabama Army National Guard.
While it may not be as familiar as some of the other acronyms in employment law, if you are not familiar with USERRA, you should be. USERRA protects individuals from being discriminated against based on their military status (perfect example: firing an employee for taking military leave). But we’re also seeing USERRA pop up more and more in other areas, such as claims against employers who offer unpaid military leave but paid leave for other reasons (such as jury duty). If you have different policies in place for service members, and don’t have a darn good reason to do so, you may be hit with a costly lawsuit.
As we took the opportunity last weekend to honor the fallen, make sure you honor those in active service, too, or risk significant legal liability. We also want to take the time here to thank all military members for their service.
We hope everyone is having a great start to their summer! As always, if you’ve got questions – you know we’ve got answers.