Last week, the Federal Trade Commission (FTC) announced a ban on noncompete agreements for nearly all American jobs, a measure that may have a significant impact on the country’s workers.

Noncompetes prohibit workers from quitting to go work for a competitor in the same industry, sharing proprietary information with new employers, and using proprietary information, such as customer lists, to start their own businesses.  Noncompete provisions often take the form of exploitative clauses in employment agreements, though companies do sometimes present their employees with agreements purely dedicated to noncompete provisions.

An estimated 30 million American workers — ranging from hair stylists and security guards to scientists and doctors — are subject to noncompetes.

The FTC is a federal agency created to protect the public from deceptive or unfair business practices and from unfair methods of competition. In the FTC’s announcement of the ban, the agency’s Chair, Biden-appointee Lina M. Khan, said that noncompetes “keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned.”

For over a decade, California’s workers have benefitted from state laws prohibiting noncompete agreements. 
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The FTC’s new ban is set to take effect in August 2024. Because it is a federal ban, all employees in the country will be subject to the ban’s provisions (except for senior executives who have already entered into noncompetes). The U.S. Chamber of Commerce, the country’s largest business lobbying group, has already challenged the FTC’s ban in federal court. 

Legal Dive quoted Lauren Teukolsky last week in an article discussing the Department of Labor’s (DOL) new independent contractor rule. The long-awaited rule was released on January 9th and replaces the DOL’s Trump-era guidance as to employee and independent contractor classification.

The issue of classification has become especially important over the past five to ten years as the American “gig economy” has taken off. With the rise of companies such as Uber and DoorDash, more employers are utilizing workforces that consist of independent contractors. From employers’ perspectives, the development is positive, as it allows them to avoid expenses associated with employees, such as worker’s comp insurance. For employees, however, failure by their employers to properly classify them as employees frequently means a denial of basic workplace rights such as minimum wage, overtime, and paid leave.

The DOL’s new rule seeks to reduce the risk that employees are misclassified as independent contractors by instituting provisions it believes are more consistent with judicial precedent than those previously put in place during the Trump administration. Legal Dive’s article begins with commentary from Ms. Teukolsky on how corporations may need to navigate the new rule, which is set to go into effect on March 11:

 “’You need to assume that most of your workers are employees, unless it’s pretty clear that they’re not, and not the other way around,’ said Lauren Teukolsky, who represents workers at Teukolsky Law. ‘It’s definitely the safest course.’”

Ms. Teukolsky also commented that the Trump-era rule deviated from longstanding employment-law principles, and the DOL’s new rule represents a return to the well-established legal principles that existed for decades. 
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To read Legal Dive’s article in its entirety, click here. To learn more about Ms. Teukolsky and Teukolsky Law, click here. 

Lauren Teukolsky expressed support for President Biden’s nominee for Labor Secretary, Julie Su, in a recent Law360 article exploring business groups’ opposition to the President’s pick.

Su was nominated to replace former Labor Department Secretary Marty Walsh, who left his post in March to take over as head of the National Hockey League (NHL) Players’ Association. Su served as Deputy Labor Secretary prior to Walsh’s departure and has worked as the acting secretary of the Labor Department since Walsh’s announcement.

If confirmed by the U.S. Senate, Su is expected to continue the pro-union and pro-worker stance the department has taken since the start of the Biden administration, much to the distress of some business groups.

Business groups have cited Su’s backing of A.B. 5, a 2020 California bill that extended employee classification status to some gig workers, as one of the primary reasons for their opposition. In the Law360 article Ms. Teukolsky argues the business groups’ blame may be misplaced:

“‘The California Legislature passed A.B. 5,’ she said. ‘It's not like Julie Su single-handedly implemented the law.’”

Ms. Teukolsky, who worked with Su in the late 1990s on California's A.B. 633, which installed wage protections for garment workers, also had this to say on Su’s nomination:

“’I don't think there's any doubt that Julie Su is eminently qualified to be the next secretary of labor,’ Teukolsky said. ‘California has the fifth-largest economy in the world, so I think any criticism that Julie Su's policies or practices somehow undermine the strength of California's economy is absurd.’”

Ms. Teukolsky was previously asked to provide her thoughts on Su in a February Law360 article on her nomination. For that article, click here. For Law360’s recent article on Su’s nomination, click here.
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Finally, if you’d like to get in touch with our office, click here. 

Law360 quoted Lauren Teukolsky in a February 28 article on the recent nomination of Julie Su to be the next Secretary of Labor.  Su has served as Deputy Labor Secretary since 2021, helping oversee the Department of Labor. Before that, Su was head of California’s Labor and Workforce Development Agency and was considered a Labor Secretary candidate, though President Biden ultimately nominated Boston Mayor Marty Walsh for the position. Walsh is leaving to head the National Hockey League’s players’ union.

Under Walsh, the Labor Department supported organized labor and workers through a series of regulatory and legislative actions. If confirmed by the U.S. Senate, Su is expected to continue the Department’s pro-union and pro-worker stance while also stepping up federal enforcement in the areas of worker classification, independent contractor status, and wage and hour issues. Su is President Biden’s first Asian American cabinet secretary.

Worker attorneys and workers’ advocates have voiced near unanimous support for Su’s nomination. Law360’s article reads as follows:

“Lauren Teukolsky of California-based Teukolsky Law said she has known Su since at least 1998, when Teukolsky was a law student and Su was litigation director of the group now known as Asian Americans Advancing Justice Southern California. At the time, the two of them worked on California's Assembly Bill 633, which implemented wage protections for garment workers.

‘Julie's idea was to extend liability for the wages beyond the contractor, beyond the direct employer, to bigger companies that were higher up the food chain, including garment manufacturers and even, in some instances, garment retailers,’ Teukolsky said.

‘It really demonstrates how she is able to think creatively about a labor enforcement problem in a way that other advocates haven't necessarily thought of before,’ Teukolsky said. ‘She just has this ability to problem-solve and use a mix of legislation, advocacy, court rulings, advocacy in the courtroom, just to use all of these different tools as problem-solver.’”
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Teukolsky Law congratulates Julie Su on her historic nomination. To learn more, click here to read the Law360 article in its entirety. 

On December 7th, President Biden signed the Speak Out Act into law. The law makes nondisclosure agreements (NDAs) unenforceable if signed before a dispute involving sexual assault or sexual harassment arises. It comes less than a year after the passage of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, a law that also improved workplace protections for victims of sexual harassment and assault.

The Speak Out Act represents a big victory for #MeToo movement and workers’ advocates. NDAs are frequently used to silence workers and keep accusations of sexual misconduct out of the public eye. They also prevent many workers from explaining job departures and employment gaps caused by sexual misconduct to prospective employers. According to a paper authored by Professors at Syracuse University and the University of Maryland, approximately 26 % of U.S. employees are covered by NDAs.

It is important to remember that the bill does not apply to other kinds of workplace disputes such as age or race discrimination. It also does not apply to NDAs signed after a dispute arises.
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If you have been the target of sexual misconduct in the workplace, click here to get in touch with Teukolsky Law.