2023 was the first full year of publication for Staffing Legal News, and I am gratified by the response, especially the encouragement and positive comments from subscribers. Here are the biggest stories from the year we left behind.
Effective January 1, California and Washington joined Colorado in enacting laws requiring salary ranges and benefits to be disclosed in job postings. Since then, other states, such as Illinois and New York, have joined the parade. Washington's law purportedly applies whether or not you have a physical presence there - posting of a non-compliant job on the Internet may be all it takes to be subject to significant damages. Needless to say, the class actions have begun!
If you are not including salary ranges and a general description of benefits in all of your postings, you should consider starting now.
Two States Declare War on Industrial Staffing
New Jersey and Illinois passed laws that are blatantly hostile to the industrial staffing sector. Legal challenges in each state have so far have failed.
The bills impose burdensome administrative requirements, but the heart of each law is the requirement for staffing agencies to match the temporary worker pay with that the client is giving its equivalent workers. This requires: (1.) Getting the clients to agree to supply their employee pay data, and (2.) Getting the clients to agree to pay more for temp workers than their own workers, because the staffing firm will need to markup its pay rates. It's too soon to see the overall impact, but it can't be good.
The real question now is: "Will the contagion stop?" Lawmakers in other states have proposed similar bills, which have yet to gain traction but are still a real possibility.
In the meantime, Texas and Florida are busy building new infrastructure to accommodate all the businesses (and their employees) moving from business-hostile states.
Independent Contractor Model Under Attack
There is an expanding state and federal war on the use of independent contractors. Witness this massive Department of Labor judgement against a healthcare staffing and its owner:
Here are three more recent examples:
Noncompetition and Trade Secret Cases
Allegis vs. Jobot
In Allegis' ongoing talent war with Jobot, a Federal Judge declared unenforceable parts of a non-compete and trade secret agreement signed by an employee of subsidiaries Aerotek and later Aston Carter. Not a good precedent, especially if there are thousands of similar agreements in effect around the organization.
Another pending case provides background details to the Allegis-Jobot dispute. According to Allegis filings in the case, "Jobot, in some instances, has offered almost double the compensation Aerotek employees earned at the Company":
Biopoint vs. Catapult Solutions
Here's another wild one. one of Catapult's Managing Directors misappropriated proprietary information from a competitor with the assistance his fiancé who worked inside the competitor. Just to make sure it looked really bad, when she got caught and fired by Biopoint, Catapult hired her into the same role. The result was one of the largest unfair competition awards in staffing history.
Allegis Wins - Not
Here a case that an Allegis affiliated company won on paper but is the definition of a Pyric victory. This one is wild - 14 years, three courts, one bankruptcy, and at the end Allegis finds itself defending a sexual misconduct claim brought by the Bankruptcy Trustee on behalf of the employee's bankruptcy estate for events that allegedly occurred 17 years ago. Can't make this up.
Federal Non-Compete Ban Proposed
In January, the FTC issued a proposed regulation banning enforcement of all non-compete agreements in the U.S, including existing agreements. This of course received a strong negative reaction from the business community, and consideration of the regulation has been extended to April 2024.
My take was, and still is, that the regulation will not hold up legally because such a sweeping re-writing of the law is beyond the FTC's authority. But state laws are being passed in places like Illinois and Minnesota that are without doubt enforceable. In any event, geographic non-competes are becoming ineffective in the modern business world, where geography often does not matter. The best way to protect your business from unfair competition is to use trade secret, non-solicitation and non-dealing agreements. But even some of these can be problematic if not written carefully (see Allegis vs. Jobot, above).
Remote I-9's Made Permanent
The best thing to come out of COVID (besides remote work).
Watching a state commit economic suicide is not pretty. But even worse is being on the receiving end of the regulatory attacks on employers that are contributing to the Golden State's demise. Where do they think the jobs come from?
New Religious Accommodation Rules for Employers
In a surprising ruling, the U.S., Supreme Court expanded employers' obligation to accommodate employees' religious needs. Employers now must grant a religious accommodation unless they can demonstrate that the accommodation would result in “substantial increased costs in relation to the conduct of the employer’s particular business." That means employers must accept a fair amount of cost and even disruption to their business when an employee requests a religious accommodation. This is going to create real problems when staffing agencies get sued for their clients' refusal to accommodate temporary workers, as already happens in disability cases.
Happy New Year and here's to good staffing in 2024!