Monthly Archives: November 2011

Another Healthcare Reform Provision Delayed

This time the DOL has pushed back the implementation deadline for the Summary of Benefits and Coverage (“SBC”) that employer-sponsored plans are required to distribute to employees. The SBC is intended to provide a summary of benefits employees receive under their employer-sponsored plan.

The DOL issued proposed regulations over the summer, detailing specific disclosure requirements. On its website last week, however, it announced that it intended to delay the effective date of until it issues final regulations.


EEOC Announces Record-Setting Year

The EEOC had a record-setting FY2011, which ended September 30, topping the number of charges received and money recovered in any previous year.

The EEOC received 99,947 charges in FY2011 alone, nearly 275 every single day of the year. It recovered $364.6 million for victims of workplace harassment and discrimination, a pace of about $1 million a day. It also reduced its infamous backlog of pending discrimination charges. At the end of the fiscal year, 78,136 charges remained pending.

It shows no sign of relenting, so employers must be prepared to continue preventing discrimination to head off complaints and likely dealing with a greater number of claims regardless of what steps they take.

Supreme Court to Decide FLSA Exemption Case

The U.S. Supreme Court announced it will decide whether pharmaceutical sales reps are exempt from the FLSA’s overtime requirements. The case arose from the 9th Circuit, which determined the sales reps were, in fact, exempt.

More importantly, however, the Supreme Court will also decide how much (if any) deference it will give to the Secretary of Labor’s interpretation of the FLSA regulations and exemptions. This may be an important shift that could eliminate or force courts to give deference to the Department of Labor’s own interpretations and guidance documents, which are not legally binding.


U.S. Supreme Court to Hear Healthcare Reform Case

The U.S. Supreme Court announced Monday that it will hear several related issues regarding the 2010 Patient Protection and Affordable Care Act (or PPACA).

The major issue is the constitutionality of the law’s requirement that every American must purchase health insurance. In addition to addressing that specific question, it will also hear some related arguments on whether the challenges to the law are barred by the Anti-Injunction Act (relating to taxes) and whether the entire law must be struck (as opposed to striking only the provision requiring the purchase of insurance).

The results of this case will have significant implications for employers–especially if the Supreme Court throws out the entire PPACA, some of the provisions of which are already in effect. Stay tuned…

Why Employers Settle Sexual Harassment Claims

With sexual harassment again revealing itself to be a hot political issue, CBS News explains why employers often settle sexual harassment claims, even those deemed meritless. The three biggies:

  1. Reputation damage to the company
  2. Legal costs of defending the case
  3. Indirect damage to the business’ bottom line (firing the harasser CEO)

The (correct) bottom line:

The truth is, the existence of a settlement does not tell you anything about what happened.  It just tells you that it was in the company’s best interest to settle

New Chain-of-Custody Form for DOT Drug Testing

For employers required to perform Department of Transportation drug and alcohol testing, a new Custody and Control Form for specimens is required on December 1, 2011.

If you are a DOT-regulated employer and don’t have an updated drug and alcohol testing plan, you need one. If you do have one, but haven’t updated it in a few years, you need to. If you’re not sure if you need one, you need to call us!

Virginia Supreme Court Invalidates Overbroad Non-Compete

In an opinion released today, the Virginia Supreme Court struck a non-compete agreement between a pest control company and an employee that prohibited the employee from working in any capacity for a competitor.

In Home Paramount Pest Control Companies, Inc. v. Shaffer, the Court addressed only the so-called “function” prong of the analysis. Non-competes must be reasonable in: (1) the type of work from which the former employee is barred; (2) the geographic scope of the restriction; and (3) the duration of the restriction.

Only the first element was at issue in this case. Everyone agreed the geographic and time restrictions were reasonable; however, the overbreadth of the “function” element scuttled the entire agreement. It prohibited the employee from working for (or owning or “being concerned with”) any competing pest control company in any capacity. Affirming the trial court’s decision, the Supreme Court held that the employer’s legitimate business interests could not justify barring the employee from working in any capacity whatsoever for a competitor (for example, a mechanic on a competitor’s trucks, a bookkeeper, or a janitor). The company could only legitimately restrict the employee from performing services that compete with those actually offered and engaged in by the company.

Given the harsh effects of drafting an overbroad non-compete agreement, it is vital to ensure that all non-compete agreements are reasonable in all three of the necessary elements.