Monthly Archives: June 2021

NEW NON-COMPETE LAW COMING TO ILLINOIS

By:       Sally A. Piefer

June 21, 2021

Non-compete and non-solicitation agreements are relatively commonplace. However, these agreements have been under increasing attack by legislatures across the country. President Biden has also expressed that one of the items on his regulatory agenda is to eliminate all non-compete agreements except for those necessary to protect trade secrets.

The Illinois legislature recently unanimously passed legislation changing the non-compete and non-solicitation agreement landscape. The Illinois Governor is expected to sign this legislation which will go into effect on January 1, 2022, and will impact agreements entered into after that date.

The Illinois legislation implements the following changes to non-compete and non-solicitation agreements:

Compensation Thresholds

The legislation voids all non-compete provisions with an employee if the employee has expected earnings below $75,000. The legislation also voids all non-solicitation provisions with an employee if the employee has expected earnings below $45,000.

The expected earnings levels include not only compensation reported on an employee’s W-2, but also elective deferrals such as employee contributions to a 401(k), FSA or HSA. The current earnings thresholds for non-competes will increase by $5,000 every 3 years through 2037 (e.g., on January 1, 2027, the earnings levels increase to $80,000). For non-solicitation provisions, the earnings levels increase by $2,500 every 3 years (e.g., $47,500 on January 1, 2027).

Adequate Consideration

The legislation requires an employer to provide adequate consideration in exchange for signing the agreement and specifically states that 2 years of employment is adequate consideration, but so is a period of employment plus additional professional or financial benefits, or merely professional or financial benefits, such as a signing bonus. Employers should ensure that the consideration being offered is specifically identified in the agreement.

Notice to Employee

Employers must give the agreement to a new employee at least 14 days before the employee starts employment. If an employer misses that window of opportunity, the employee must then be provided 14 days from receipt to sign and return. The employee can sign earlier, but cannot be forced or coerced to do so. The agreement must also advise the employee that he/she may consult with an attorney before signing. An agreement which fails to incorporate these provisions is considered illegal and invalid.

Restrictions on Enforcement

The Illinois legislature has placed several restrictions on enforcing a non-compete or non-solicit provision. For example, an employer cannot enforce a non-compete or non-solicitation clause where the employee is terminated, furloughed or laid off as a result of “business circumstances” or governmental orders relating to COVID 19 or similar circumstances—unless the agreement contains a compensation equivalent to the employee’s base salary at time of termination for the length of enforcement – minus compensation earned by the employee in replacement employment.

In addition, the legislation specifically provides that if an employee prevails in an attempt to enforce a non-compete or non-solicitation clause, the employer has to pay the employee’s reasonable attorney’s fees and costs. While the legislation does not provide a similar statutory provision for the employer, there is no restriction on incorporating such a provision into the agreement.

Attorney General Enforcement

Finally, the new legislation permits the Attorney General to conduct investigations and sue employers if there is a belief that the employer is engaging in a practice in violation of the legislation. In the event of litigation, the Attorney General can seek a temporary restraining order or preliminary injunction preventing the employer from further violations of the law, and it can recover damages, which can include a $5000 civil penalty for each violation (or $10,000 for repeat violations within a 5-year period). Each employee subject to an illegal agreement is considered a separate and distinct violation of the law.

Next Steps

Illinois is not alone. Several other states, including Arizona, Oregon, Nevada and Washington DC have also implemented new legislation in 2021 which may impact the enforceability of non-compete and non-solicitation agreements in those states. Employers with operations in multi-state locations should have their non-compete and non-solicitation agreements analyzed to determine whether these new laws will impact the enforceability of the agreements.

If you have questions about the new law, or any questions about non-compete and/or non-solicitation agreements, please contact Sally Piefer at 414-226-4818 or spiefer@lindner-marsack.com, or contact your regular Lindner & Marsack attorney.

OSHA ISSUES EMPLOYER GUIDANCE AND EMERGENCY TEMPORARY STANDARD FOR HEALTHCARE EMPLOYERS

By: Samantha J. Wood

On June 10, 2021, the Occupational Safety and Health Administration (“OSHA”) issued guidance for all employers, along with a much-anticipated Emergency Temporary Standard (“ETS”), limiting the ETS to healthcare workers.

Emergency Temporary Standard for Healthcare Workers

After much consideration, OSHA determined that an emergency standard was necessary because existing standards and regulations, and the OSH Act’s General Duty Clause were inadequate to address the COVID-19 hazard for healthcare workers.  OSHA determined that these workers face the highest risk of COVID-19 exposure because people with suspected or confirmed COVID-19 are reasonably expected to be present in the workplace.

The ETS is limited to workers who provide healthcare services and healthcare support services, including employees in hospitals, nursing homes, and assisted living facilities; emergency responders; home healthcare workers; and employees in ambulatory care facilities where suspected or confirmed COVID-19 patients are treated.

This standard requires healthcare employers to comply with several provisions, including:

  1. Developing and implementing a COVID-19 plan that includes a designated workplace safety coordinator, a workplace specific hazard assessment, and policies and procedures to minimize the risk of COVID-19 exposure;
  1. Limiting and monitoring points of entry to settings where direct patient care is provided; screening and triaging patients, clients and other visitors and non-employees; and implementing patient management strategies;
  1. Providing and ensuring employee wear a facemask when indoors and when occupying a vehicle with others for work purposes;
  1. Continuing physical distancing, installing physical barriers, ensuring proper ventilation, and cleaning and disinfecting surfaces and equipment in accordance with CDC guidelines;
  1. Screening employees before each workday and shift and requiring employees to promptly notify the employer if the employee is COVID-19 positive, is suspected of having COVID-19, or is experiencing COVID-related symptoms;
  1. Providing reasonable time and paid leave for vaccinations and vaccine side effects;
  1. Implementing training to ensure employees understand COVID-19 transmission and situations in the workplace that could result in infection;
  1. Establishing a COVID-19 log of all employee instances of COVID-19 without regard to occupational exposure and following requirements for making records available to employees/representatives (if more than 10 employees); and
  1. Reporting work-related COVID-19 fatalities and in-patient hospitalizations to OSHA.

The ETS exempts fully vaccinated workers from masking, distancing, and barrier requirements when in well-defined areas where there is no reasonable expectation that any person with suspected or confirmed COVID-19 will be present.

Covered employers must comply with all ETS provisions within 14 days of its publication in the Federal Register, with the exception of the requirements related to physical barriers, ventilation and training.  Employers must comply with physical barriers, ventilation and training requirements within 30 days of the ETS’s publication.

OSHA Guidance for All Employers

At the same time OSHA released its ETS, it also issued updated COVID-19 guidance for all employers on mitigating and preventing the spread of COVID-19 in the workplace.  OSHA expressly acknowledged and adopted the CDC’s statement that fully-vaccinated individuals can resume activities without wearing masks or physically distancing, and stated that “most employers no longer need to take steps to protect their workers from COVID-19 exposure in any workplace or well-defined portions of a workplace where all employees are fully vaccinated.”

However, OSHA’s guidance reminds employers that it still has an obligation to protect unvaccinated and otherwise at-risk employees, pursuant to OSH Act’s General Duty Clause.  In order to protect unvaccinated and other at-risk employees, OSHA recommends that employers implement multiple layers of control, such as:

  1. Encouraging vaccinations and taking steps to make it easier for workers to get vaccinated;
  1. Instructing unvaccinated workers who have had close contact with someone who tested positive, and all workers who are experiencing COVID-related symptoms or who are infected with COVID-19 to stay home;
  1. Implementing social distancing for unvaccinated and otherwise at-risk workers in communal work areas and limiting the number of unvaccinated or at-risk workers in one place at any given time (such as by implementing flexible work hours, telework, or other flexible meeting and travel options);
  1. Implementing transparent shields or other solid barriers at fixed workstations where unvaccinated or otherwise at-risk workers are not able to remain at least six feet apart from others;
  1. Requiring unvaccinated or at-risk employees to continue to wear face coverings, providing face coverings to employees, supporting all workers in continuing face covering use if they choose, and recommending or requiring unvaccinated customers or visitors to wear face coverings;
  1. Educating and training managers, employees, and other contractors on COVID-19 policies and procedures;
  1. Improving air supply/ventilation procedures;
  1. Performing cleaning and disinfection procedures;
  1. Recording and reporting COVID-19 infections and deaths (excluding employees experiencing adverse side effects of the COVID-19 vaccination); and
  1. Implementing protections from retaliation and setting up an anonymous process for workers to voice concerns about COVID-19 hazards.

In high-risk workplaces, such as manufacturing, meat and poultry processing, and high-volume retail and grocery settings, where there is a heightened risk of COVID-19 exposure due to close or prolonged contact, OSHA further recommends:

  1. Implementing staggered break times to avoid congregations of unvaccinated or otherwise at-risk workers;
  1. Staggering workers’ arrival and departure times to avoid congregations of unvaccinated or otherwise at-risk employees; and
  1. Providing visual floor or sign markings as a reminder to maintain six feet of distance.

In determining whether to modify policies or procedures, employers should carefully consider the above recommendations, as well as CDC guidance, and other state and local requirements to ensure continued legal compliance.