As we move into the latter half of 2024, several notable changes are shaking up employment law across the U.S. The Federal Trade Commission (FTC) is preparing to enforce a new rule banning most noncompete agreements starting September 4, though its implementation is currently facing some legal hurdles. The National Labor Relations Board (NLRB) recently dropped its appeal of the joint employer rule, which would have significantly impacted joint employer classifications. On the state level, Massachusetts, Maryland, Minnesota, and Vermont are introducing new pay transparency requirements. Additionally, the NLRB is revising its approach to union recognition and blocking charges, reverting to previous standards.
FTC and Noncompetes: Where We Stand
Employment lawyers are closely watching the upcoming changes, as the FTC’s final rule banning most noncompete agreements is set to take effect on September 4, 2024. Although there are no nationwide injunctions in place, two federal courts have issued mixed rulings on the matter. The Eastern District of Pennsylvania decided not to grant a preliminary injunction in ATS Tree Services, LLC v. FTC, affirming the FTC’s authority to implement the rule. In contrast, the Northern District of Texas granted a preliminary injunction specific to the plaintiff-employer in Ryan, LLC v. FTC. This relief is limited to the plaintiffs involved, but the court has indicated it plans to finalize the case and the scope of the injunction by August 30, 2024, just days before the rule’s effective date. “
NLRB Tosses in the Towel on Joint Employer Rule (For Now)
On July 19, 2024, the NLRB filed a motion to dismiss its appeal of the joint employer rule in the Fifth Circuit Court of Appeals. The joint employer rule had been the center of controversy for many since its publication, as it would have drastically extended the bounds of the joint employer standard. As we discussed in a prior article, the rule would have not only expanded the definition of joint-employer, but also included as an employer those businesses that merely had some authority to exercise control of terms of employment even if indirectly such as through contract with the employees’ actual employer. Predictably, the U.S. Chamber of Commerce and a coalition of business groups filed a lawsuit challenging the NLRB’s joint employer rule on the grounds that it was statutorily unauthorized, arbitrary and capricious. While this means that the rule will no longer go into effect, it does not mean that the NLRB will leave the matter alone, as the agency has increasingly utilized its enforcement capabilities to pursue areas which it deems covered by the NLRA as outlined in the numerous memorandums issued by the agency’s General Counsel.
Pay Transparency Moves
As 2024 progresses, several states are expanding pay equity laws, reflecting a growing emphasis on pay transparency. These updates are part of a broader trend towards greater salary transparency and pay equity across the U.S.
On July 31, 2024, Massachusetts Gov. Maura Healey signed a new wage equity bill into law, which will take effect one year later. This law mandates that all employers with over 25 employees in Massachusetts disclose salary ranges in job postings, provide pay range information for promotions, transfers, or new roles, and share pay range details with current employees upon request.
Maryland is also enhancing its Equal Pay for Equal Work Act by introducing a Wage Range Transparency requirement. This update, effective October 1, 2024, requires employers to disclose a “wage range” for job openings and provide a general description of benefits and compensation. The wage range must be a good faith estimate based on various factors, including applicable pay scales and current salary rates for similar positions. The law now applies to all businesses in the state, regardless of size, and employers must submit a compliance form to the state.
Starting January 1, 2025, Minnesota will require employers with 30 or more employees to include salary ranges and detailed benefits information in job postings. This includes health insurance, retirement plans, bonuses, and other financial perks associated with the position.
Vermont’s law is set to take effect on July 1, 2025, and requires employers with five or more employees to include a maximum and minimum annual salary or hourly wage in any job advertisements. The law requires employers to disclose the range or wage that they expect, in good faith, to pay.
NLRB ‘Fair Choice Employee Voice‘ Rule
As part of the NLRB’s “Fair Choice-Employee Voice” rule, the agency returns to prior standards regarding blocking charges and voluntary recognition of unions. The 2020 stance on voluntary recognition required that: the employer and union notify a regional office that recognition was granted; any minority group of employees in the proposed bargaining unit receive notice of the voluntary recognition and of their right to file a decertification petition or support the certification of a rival union within 45 days of receiving notice; and 45 days pass from the date of notice without the filing of a valid petition. The new rule eliminates the 45-day period and blocks any union election from occurring for a period of up to six months to allow for collective bargaining.
Additionally, the updated rule reinstates an earlier approach to blocking charges, permitting regional directors to postpone elections if an unfair labor practice charge is pending and believed to interfere with employee free choice. This contrasts with the prior rule, which mandated that elections be held even if an unfair labor practice charge was in place.
Conclusion
Updates to employment laws and regulations tend to increase around election cycles. To ensure compliance with all applicable federal, state and local laws, employers are advised to review their employee handbooks at least once annually, though staying in touch with legal counsel is advisable to address the timeliest issues.
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