Your Employment and Severance Agreements May Need Serious Makeovers, Plus . . . What NOT to Do During an Interview

A wise person once said: everything that’s done eventually becomes undone.

We don’t know who said it, but we’re going with it – especially for this update.

Restrictive covenants (non-competes, non-solicits, non-disclosures, etc.) are commonplace in employment agreements, severance agreements, and other key employment documents. While these are still powerful and useful tools, especially to keep employees from engaging in harmful behavior, we’re seeing greater scrutiny at both a federal and state level recently. We’ll get into it below, but it may be time to revisit these provisions and make sure they not only fit your culture, but comply with the law as it’s most likely bound to change.

Also included in this edition – a quick educational opportunity for those of you with . . . questionable . . . hiring practices, and an update on New York’s new sexual harassment hotline!

Non-Competes No More (For Some)

With several states either abolishing or considering abolishing (i.e., New Jersey) the use of non-competes in certain scenarios, some companies are taking matters into their own hands. For example, Microsoft recently announced that it’s removing non-competes from its employment agreements and won’t enforce pre-existing non-competes. To be clear, non-competes are currently still enforceable in most states, including New York and New Jersey, but that may change in the next couple of years.

On a related note: Microsoft, in line with recent laws promoting equal pay by requiring salary transparency, will disclose salary ranges in all of its external and internal job postings across the country.

On another related note: For those of you in New York City, don’t forget that the new wage transparency law goes into effect on November 1, 2022, so it’s best you start planning your salary disclosures and get all your salary data in order sooner rather than later.

Non-Disparagement Agreements on the Chopping Block

We’re not Microsoft-obsessed, we swear . . .

Microsoft also announced that it was no longer including non-disclosures in its employee settlement and separation agreements. This isn’t too surprising though, given the growing trend toward prohibiting non-disclosures in cases of alleged discrimination, sexual harassment, or sexual assault.

But wait, there’s more . . . a loophole was recently discovered in New Jersey’s law banning non-disclosures in agreements involving employee claims of discrimination, retaliation, or harassment.

In late May, a New Jersey court issued a decision holding that, while New Jersey’s Law Against Discrimination (“NJLAD”) bars confidentiality agreements and non-disclosures for employee discrimination, retaliation, or harassment claims, it does not bar non-disparagement restrictions. So, craftily drafted non-disparagement provisions might be able to be drafted in a way that doesn’t look or feel like an illegal non-disclosure-type of provision, but has a similar impact.

Not surprisingly, shortly after this decision, a State Senator introduced a bill proposing to amend the NJLAD to explicitly bar non-disparagement agreements, as the effect of chilling the victim’s ability to share their story is functionally the same. Of course, we’ll keep you posted on what happens here. In the meantime, feel free to hold onto your hats non-disparagement agreements for sexual harassment, discrimination, or retaliation claims.

Please Don’t Sexually Harass Your Job Candidates

Apparently, we need to say this: just because a job candidate isn’t an employee yet, doesn’t mean you can sexually harass them. A New Jersey employer was recently ordered to pay over $30K in damages and, thanks to the fee shifting provision of the NJLAD, over $140K in attorneys’ fees and costs, after the employer’s president poured a job candidate a “celebratory” drink and proceeded to make sexually explicit comments to her. The employer argued that the candidate was not officially an employee at the time of the alleged harassment, and thus, the NJLAD did not apply. No, just no. Spoiler alert: the jury rendered a verdict against the employer. The lesson (one of several?): employment laws aren’t always limited to actual employees – they sometimes cover individuals like applicants/candidates as well.

New York’s Sexual Harassment Hotline is Officially Live!

Pursuant to recent amendments to the New York State Human Rights Law, the new, toll-free, confidential, workplace sexual harassment hotline is officially live. The new hotline number is 1-800-427-2773 (1-800-HARASS-3). The hotline is staffed with pro bono attorneys and other attorney organizations who can assist callers with sexual harassment complaints.

All employers are required to advise their employees of the hotline in any materials posted or provided to employees regarding sexual harassment (we suggest including it in handbooks, sexual harassment training materials, and sexual-harassment posters).  

Cheers to beating the heatwave, and as always, if you’ve got questions – you know we’ve got answers.

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