Non-competition agreements—or non-competes as they are routinely referred to—are common and are regularly enforced and upheld by Florida courts.  A non-compete is designed to limit what an employee can or cannot do both while employed by a business and after the employment relationship ends although non-competes can apply to persons other than those merely defined as employees.

In a nutshell and in its most basic form, a non-compete prevents an employee of a business from working for a competitor of  his employer both during the time he is employed by that employer and for a certain period of time after the employment ends.  Florida Statutes Sec. 542.335 governs non-competes in Florida that were entered into after July 1, 1996.  Amongst other things, it requires that the non-compete be in writing and signed by the person to whom the non-compete applies and that there be a legitimate business reason for the non-compete.  Legitimate business reasons, under Sec. 542.335, include but are not limited to trade secrets defined in Florida Statutes Sec. 688.002(4); customer or client goodwill; substantial relationships with  specific customers, whether those customers are existing or even prospective; and valuable confidential business information that does not necessarily rise to the level of being a trade secret.

If a court finds that a non-compete is not supported by a legitimate business interest that non-compete will be deemed unlawful.  Simply put, under those circumstances, the non-compete is void and unenforceable

Whether the period of time that a person is prohibited from competing, after the employment or business relationship ends, is ultimately considered reasonable depends upon the nature of that relationship.  Florida Statutes Sec. 542.335 provides for the following presumptively reasonable periods:

  • when the non-compete is against a former employer, agent or independent contractor and is not part of the sale of a business, the court presumes that a restrictive period of six months or less is reasonable and a period of more than two years is unreasonable;
  • when the non-compete is against a former distributor, franchisee, dealer or licensee of either a trademark or service mark and that is also not part of the sale of a business, the court presumes that a restrictive period of one year or less is reasonable and a period of more than three years is unreasonable;
  • when the non-compete is against the seller of all or part of a business, the court presumes that a restrictive period of three years or less is reasonable and a period of more than seven years is unreasonable.

The presumptions laid out in Florida Statutes Sec. 542.335 are rebuttable presumptions.

This means that the person subject to the non-compete can bring forward evidence as to why the restrictive period should not be enforced even if that restrictive period falls within the confines of Sec. 542.335.

On August 23, 2018, New Jersey’s intermediate appellate court in Roman v. Bergen Logistics, LLC et al., ruled that employers could not contractually limit the remedies available for successful employment discrimination claims.  In that case, the plaintiff-employee and defendant-employer had signed an arbitration agreement at the time of the employee’s hiring.  The agreement provided that all employment-related claims, including statutory claims, would be resolved exclusively by final and binding arbitration.  Further, the agreement waived the plaintiff-employee’s right to collect punitive damages.

Subsequently, the plaintiff-employee sued her employer alleging claims for sexual harassment under New Jersey’s Law Against Discrimination (“LAD”).   In the trial court, the defendant-employer successfully obtained dismissal of the action based upon the arbitration agreement.  However, on appeal, the court ruled that the portion of the agreement purporting to limit the employee’s ability to recover punitive damages was unenforceable, reasoning that the availability of punitive damages served important public policy interests under the LAD: to deter misconduct and punish the wrongdoer. The appellate court therefore dismissed the action based upon the employee’s agreement to arbitrate any dispute, but invalidated the damages limitation as to the employee’s LAD-based claims so that, in any subsequent arbitration, the employee would be able to recover punitive damages.

The court’s ruling is consistent with a notable trend in New Jersey law, whereby courts uphold the parties’ freedom of contract but limit or invalidate portions of arbitration agreements on public policy grounds to the extent they impinge upon statutorily-granted rights under the LAD.  For example, in Rodriguez v. Raymours Furniture Co., 225 N.J. 343 (2006), the State’s highest court concluded that a provision in an employment application, purporting to require the employee to file any employment-based claim within six-months, was unenforceable as to the employee’s LAD-based claim.  The Court explained that, supplanting the applicable two-year statute of limitations for LAD claims with a mere six-month window effectively denied the employee important substantive rights provided by the statute.

New Jersey-based employers should review and potentially modify their current employment contracts to ensure that they are consistent with this current trend in the law.  While agreements to submit disputes to binding arbitration – including employment discrimination claims – will generally be upheld, limitations on substantive rights and remedies conferred by the LAD will likely be deemed unenforceable.

Last week, New York State launched a new website that houses significant resources for employers and employees about the new legal obligations arising from the New York State Budget.  The Combatting Sexual Harassment in the Workplace website includes draft model sexual harassment prevention training and policy materials that will be open for public comment through September 12, 2018.  Upon finalization of the documents, which will occur at an unknown later date, employers may use the materials to satisfy their obligations under the new law.

As we previously reported, the New York State Budget contains several bills designed to prevent sexual harassment in the workplace.  The new website contains guidance and draft materials relating to each of the significant components of the law.  In addition to hosting drafts of the model sexual harassment training and policy, the website contains draft FAQs related to nondisclosure and mandatory arbitration clauses.

Draft Model Sexual Harassment Prevention Policy

Effective October 9, 2018, New York employers must adopt written sexual harassment policies.  New York released the draft model policy that employers may choose to enact after the policy has been finalized to comply with the new law.

Some notable aspects of the draft model policy and the associated FAQs include:

  • An explicit statement that the policy applies to “all employees, applicants for employment, interns, whether paid or unpaid, contractors and persons conducting business” with the employer;
  • A requirement that the policy must be posted in all work locations and provided to employees upon hiring;
  • A requirement that managers and supervisors report any harassment complaint or any harassment that they observe;
  • A statement that an investigation of a harassment complaint “should be completed within 30 days”; and
  • An explanation of the various steps for an investigation, which include: (1) conducting an “immediate review of allegations,” taking any appropriate interim actions, and encouraging the complainant to complete a written complaint form (or if he/she refuses, prepare a complaint form based on the oral complaint); (2) taking steps to preserve any potentially relevant documents or emails; (3) reviewing all relevant documents; (4) interviewing all of the parties involved (including witnesses); (5) creating written documentation of the investigation; (6) retaining the written documentation for the employer’s records; (7) promptly notifying the complainant and alleged harasser of the final determination of the investigation; and (8) notifying the complainant of his/her right to file a complaint or lawsuit pursuant to local, state, and federal law.

Alternatively, employers may choose to adopt their own sexual harassment policies.  At a minimum, the policy must: (1) prohibit sexual harassment consistent with guidance issued by the New York Department of Labor in consultation with the Division of Human Rights and provide examples of prohibited conduct; (2) clearly state that sexual harassment is a form of employee misconduct and individuals engaging in sexual harassment and supervisory personnel who knowingly allow such behavior will be disciplined; (3) include information regarding federal and state laws on sexual harassment, remedies available to victims of sexual harassment, and a statement that there may be additional applicable local laws; (4) include a model complaint form; (5) include a procedure for the timely and confidential investigation of complaints that ensures due process for all parties; (6) inform employees of their rights of redress and the forums where disputes can be adjudicated both administratively and judicially; and (7) clearly state that retaliation against individuals who complain of sexual harassment or who assist in any investigation or proceeding involving sexual harassment is unlawful.

Notably, the website also contains a draft model complaint form that employers may use to gather information from the complainant.

Draft Model Sexual Harassment Prevention Training

The New York State Budget also requires employers to provide employees with sexual harassment training on an annual basis, starting on October 9, 2018.  Although the law is silent as to when employers must complete the first round of annual training, the draft materials indicate that all employees must complete the training by January 1, 2019.  This is a new development that employers must be prepared to meet, especially in light of the fact that the model training materials are still in draft form until further notice.  Additionally, all new employees must complete their sexual harassment training within 30 calendar days of their start date.

Currently, the draft model training document only includes general instructions for employers, a script for in-person group training, and a list of the minimum training standards that employers must meet if they decide not to use the model training program.  As indicated by the website, a model PowerPoint presentation and video presentation are forthcoming.

The draft model training materials (including the associated FAQs), also indicate that all employees (including temporary and transient employees) must receive training even if “someone just works for one day for the employer, or if someone works for just one day in NY.”  Further, the FAQs explain that a new employee may be considered trained if the employee’s former employer used the “same unmodified state model training or one of similar substance,” but also suggests that “even if the same training is used, [employers] may still wish to train new employees to [their] standards.”

If an employer chooses not to use the model sexual harassment training, the training must at minimum: (1) be interactive; (2) provide an explanation of sexual harassment as set forth in guidance issued by the New York Department of Labor in consultation with the Division of Human Rights; (3) include examples of sexual harassment; (4) include information regarding relevant federal and state laws and remedies available to victims of sexual harassment; (5) provide information regarding employees’ rights of redress and the available forums for adjudicating complaints; and (6) include information regarding supervisor conduct and supervisor responsibilities.  As noted within the FAQs, “interactive” means training that may: (1) be web-based with questions asked of employees; (2) accommodate questions asked by employees; (3) include a live trainer who can answer any questions; and/or (4) require feedback from employees about the training program.

Draft FAQs on Mandatory Arbitration and Nondisclosure Clauses

The new website also includes information relating to the current prohibition against (1) using nondisclosure clauses in settlements or agreements concerning claims of sexual harassment (unless requested by the plaintiff/complainant) and (2) requiring employees to submit sexual harassment claims to mandatory arbitration.

With regard to the use of nondisclosure clauses, the draft FAQs detail how parties should memorialize the plaintiff/complainant’s preference to include such a provision.  Namely, the employer must first enter into a separate agreement with the plaintiff/complainant indicating the plaintiff/complainant’s preference to include the nondisclosure clause (which is subject to a 21-day consideration period and 7-day revocation period) and only then may the actual agreement containing the nondisclosure language (and all other terms) be lawfully executed.

The draft FAQs do not contain any significant developments concerning the prohibition on mandatory arbitration clauses.

New York City Employers

Overall, employers should be prepared to meet the deadlines listed above – although all of the guidance is currently in draft form so it’s possible for the deadlines to be altered following the comment period – and consult with counsel regarding requirements under the new law.  Further, as previously reported, New York City employers must also comply with the new Stop Sexual Harassment in NYC Act, which notably imposes its own set of specific training requirements for employers with 15 or more employees beginning on April 1, 2019.  The New York City Commission on Human Rights will create an online module that employers may use at no charge to comply with the new law, but it is unclear when this module will be ready.  Employers should consult with counsel to ensure compliance with both laws.

New York City Requirements

The New York City Commission on Human Rights (the “Commission”) recently issued a notice and information sheet that all New York City employers are required to post and provide to new employees by September 6, 2018.

As previously blogged, on May 9, 2018, Mayor Bill de Blasio signed the Stop Sexual Harassment in NYC Act (the “Act”) in an effort to combat and prevent sexual harassment in the workplace. The Act applies to all New York City employers (regardless of size) with regard to discrimination claims arising out of gender-based harassment.  Several significant components of the Act include:

  • Beginning April 1, 2019, employers with 15 or more employees in New York City must conduct annual sexual harassment training for all employees and within 90 days of an employee’s hire;
  • Extending the statute of limitations for filing complaints of gender-based harassment with the Commission from 1 year to 3 years; and
  • Requiring all employers to post an anti-sexual harassment rights and responsibilities notice and also to distribute an information sheet to new employees on sexual harassment.

With regard to the new training requirement, the Commission will create an online module that employers may use at no charge to comply with the Act.  It is unclear when this module will be ready.

Pursuant to the above, the Commission issued the mandatory posting notice, which all employers must conspicuously display. The Act requires employers to display the notice in both English and Spanish, but only the English version of the notice has been published by the Commission.  The Spanish version of the notice is forthcoming.

Further, the Commission released the informational fact sheet that must be distributed to employees at the time of hire.  To comply with this requirement, employers may either provide this information sheet to new employees as a separate document or incorporate it into an employee handbook.

In light of the above, New York City employers should ensure to post the notice and also be prepared to distribute the fact sheet to all new hires before the September 6, 2018 deadline.  Employers should also be prepared to implement an anti-sexual harassment training program by April 1, 2019.

New York State Law

Finally, all New York employers should also keep in mind the new legal obligations arising from the New York State Budget.  Last April, Governor Andrew Cuomo signed into law the New York State Budget containing several bills designed to prevent sexual harassment in the workplace.  To date, New York employers are now prohibited from using nondisclosure clauses relating to claims of sexual harassment in settlements or other agreements (unless the plaintiff/complainant prefers to include such a provision) and may not require employees to submit sexual harassment claims to mandatory arbitration.  Notably, all New York employers must adopt a written anti-sexual harassment policy by October 9, 2018. On that same date, employers must also begin conducting annual interactive sexual harassment training.

The New York Department of Labor and Division of Human Rights will issue a model sexual harassment prevention policy and model sexual harassment prevention training program that employers may choose to adopt.  Alternatively, employers can create their own policy and training program, which must equal or exceed the State’s requirements.  At a minimum, the policy must: (1) prohibit sexual harassment and provide examples of prohibited conduct; (2) provide that sexual harassment is a form of employee misconduct and individuals engaging in sexual harassment and supervisory personnel who knowingly allow such behavior will be disciplined; (3) include information regarding federal and state laws on sexual harassment and remedies available to victims; (4) include a model complaint form; and (5) inform employees of forums where disputes can be adjudicated and the available remedies.  The sexual harassment training must, at the very least, cover: (1) an explanation of sexual harassment and examples of prohibited conduct; (2) federal and state laws regarding sexual harassment and the remedies available to victims; (3) supervisor conduct and their added responsibilities; and (4) employees’ rights and the various forums available for adjudicating complaints.

Employers should consult with counsel regarding the new employer obligations under the Act and the New York State Budget to ensure compliance with both laws.  Now more than ever, it is imperative for employers to have comprehensive written anti-sexual harassment policies and robust training programs.

Recently, the New York City Department of Consumer Affairs (“DCA”) issued regulations regarding the New York City Temporary Schedule Change Law (the “NYC Schedule Change Law”), which went into effect on July 18, 2018.  Under this new law, employers are required to provide eligible employees with up to two (2) temporary schedule changes per calendar year for certain “personal events.”

Eligible Employees and Types of Permissible Schedule Changes

New York City employers are now required to allow employees who work at least 80 hours in a calendar year and have been employed for at least 120 days, the ability to make two (2) temporary schedule changes per year.  Specifically, employers must provide employees with two (2) changes to their schedules of up to one business day each or one two-day schedule change during the calendar year.  These schedule changes include, but are not limited to, swapping shifts with another employee, working remotely, using unpaid and/or paid time off, change in work location, or altering scheduled work hours.  Employers may deny a request for a temporary schedule change only if the employee has already exhausted his/her two (2) requests provided by the law or if an exemption applies.

Qualifying “Personal Events”

Employees may request temporary schedule changes for the following reasons:

  • To provide care to a minor child (up to eighteen (18) years old) or to a disabled person living in the employee’s home who is dependent upon the employee for care;
  • To attend a legal proceeding or hearing for subsistence benefits; or
  • For any circumstance that constitutes a basis to take earned sick time under the New York City Earned Sick and Safe Time Act (“NYC Sick and Safe Time Act”).

Notably, employees are not required to first use their earned paid time off under the NYC Sick and Safe Time Act before requesting schedule changes.  In addition, time provided under the NYC Sick and Safe Time Act does not satisfy the employer requirements under the NYC Schedule Change Law.

Employer Notice Requirements

Pursuant to the recent regulations, employers must immediately post the DCA’s notice, which is available here.  The notice should be posted in an easily noticeable area and in both English and the primary language of at least five percent (5%) of the employees at a workplace.  Further, employers must maintain records of their compliance with this law for three (3) years.

Employers are prohibited from retaliating against any employee who exercises his/her rights under the NYC Schedule Change Law.

Employers should consult with an attorney regarding the specific request procedure for temporary schedule changes, the exemptions available under the NYC Schedule Change Law, and how the law interacts with the NYC Sick and Safe Time Act.