The Defend Trade Secrets Act of 2016

Posted in Trade Secrets

On April 27, 2016, Congress passed the “Defend Trade Secrets Act of 2016.” The Act (the DTSA) passed the House by a vote of 410 to 2. The bill passed the Senate April 4, 2016, by a vote of 87 to 0. Congress enacted the DTSA largely due to its concerns about Chinese espionage and online hacking by cyber-criminals.

The DTSA is expected to be signed into law promptly. Even before the Senate passed the Act, the Obama administration voiced strong support for it. The DTSA is intended to go into effect on the date of its enactment and applies to any misappropriation that occurs after that date.

General Background

The Act amends the Economic Espionage Act to create a civil cause of action for trade secret misappropriation. The federal statute previously provided only criminal penalties for trade secret misappropriation. Historically, trade secret misappropriation has been a matter of state law, commonly addressed under the Uniform Trade Secrets Act. The DTSA does not pre-empt these state laws. Instead, it leaves all state trade secret laws in place and creates the availability of an additional federal remedy.

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Greenberg Traurig’s Jim Boudreau Quoted in Bloomberg BNA’s Labor and Employment Blog Series

Posted in Federal Law, FLSA

Jim Boudreau, shareholder at Greenberg Traurig, was recently quoted in two articles in Bloomberg BNA’s Labor and Employment Blog series discussing issues relating to Article III in Fair Labor Standards Act (FLSA) class and collective actions. Jim also discussed the federal courts’ reaction to Campbell-Ewald and the potential for due process issues that may arise in similar cases. To review these articles, please click here for part one and here for part two.

Rising Salary Levels Governing Fair Labor Standards Act’s ‘White Collar’ Exemptions May Lift Union Votes

Posted in Department of Labor, FLSA, Unions

Since March 14, 2016, when the Department of Labor (DOL) transmitted its final rule to the Office of Management and Budget (OMB) increasing the salary required to qualify for the “white collar” overtime exemptions under the Fair Labor Standards Act (FLSA), employers have been encouraged to start planning to ensure compliance.1 Whether these regulations will be published sooner than employers expect remains to be determined. Among the issues to be evaluated carefully is how the regulations will impact not only wage and hour and employment laws, but also traditional labor law.

The New Prevailing Executive Salary Increases May Create Prevailing Wins for Union Organizing and Bargaining

The DOL proposes an increase in the white collar salary requirement from $455 a week (or $23,660 per year) to about $970 per week (or $50,440 per year) and could include an automatic adjustment to the “salary” test to ensure that new salary levels are an effective measure for the exemptions from overtime under the FLSA. The salary test for the “highly compensated” exemption would also increase from $100,000 per year to $122,148 per year. In addition, the DOL has requested further input from stakeholders on the “duties” tests for the various exemptions.

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OSHA Continues to Make Changes to Its Enforcement Procedures for Reporting Requirements

Posted in Federal Law, OSHA, Workplace Safety

hard hatsHey employer, remember that workplace injury that you reported to OSHA a few months ago? You remember, right? The one where after you gave OSHA information about the workplace injury, like the root cause of the incident, and a few days later OSHA informed you that it considered the matter “closed.” Well guess what? OSHA is now at the door of your facility seeking to do a “monitoring inspection” related to the workplace injury that you thought was “closed.” Can OSHA actually do this you ask? Yes, and they will!

Summary

On March 4, 2016, the Occupational Safety and Health Agency (OSHA or the Agency) issued revised enforcement procedures related to employers’ reporting requirements under 29 C.F.R. § 1904.39 (Revised Enforcement Procedures) due to the “influx of workplace incident reports to OSHA and the field’s experiences with the new reporting requirements.” See a previous GT Alert, OSHA Changes Requirements for Recording and Reporting Workplace Injuries and Illnesses – Effective Jan. 1, 2015.

The Revised Enforcement Procedures set forth two significant changes from OSHA’s December 2015 “Interim Enforcement Procedures for New Reporting Requirements under 29 CFR 1904.39” (Interim Enforcement Procedures). First, the Revised Enforcement Procedures provide for increased penalties for employers who fail to report a reportable event to OSHA. Second, the Revised Enforcement Procedures put employers on notice that OSHA may conduct an on-site inspection even after OSHA notifies employers that it is closing its Rapid Response Investigation (RRI) of a reportable workplace injury. Although OSHA may conduct a follow-up inspection, OSHA will not use an employer’s internal investigation and response to the RRI as a basis for a citation, as long as the employees are not exposed to a serious hazard and the employer is taking steps to correct the condition.

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Crossing Borders: Employment Considerations – Is Employment a Universal Concept?

Posted in Employee Classifications, Global Workforce Strategies

GlobeWe often expect differences among legal approaches to employment relationships around the globe. Do we ever think about the similarities?

In the vast majority of countries through which my legal work life has blazed a trail, there is one concept that is remarkably universal: the definition of employment.

When characterizing what happens in each of the 197 countries that exist today, one can seldom safely use the term “all,” but I will go out on a limb and say that all countries define employment in virtually the same way. Individual statutes often contain specific definitions, but in a nutshell, employment is generically defined as dependent services provided by a person to another person for compensation. The manner of payment, the calculation of wages, even the currency of the compensation does not matter. What matters is whether a person (usually an individual rather than a legal entity) performed work under the direction or control of another person (usually a legal entity, but could also be an individual) and was paid something of value in return for the services.

Sometimes the question is posed as to which legal person holds the role of employer. Sometimes the question is posed as to which of several legal persons might be more responsible for employer obligations than others. Laws defining who is an employee, however, agree that the person performing the dependent service is an employee.

Ok. So… what?

As I have previously discussed in this blog series, having the status of employee entitles individuals in each country to receive specific protections. The country does not often care whether the employer is resident or has a legal presence (although some countries do) so long as the employee has the benefit of the legal protections associated with that country’s law. The definition of employee is therefore not dependent on the location of the employer, it is dependent on the location of the employee. And when dependent relationships cross borders, unforeseen liability often arises.

I receive questions frequently regarding the benefits owed to employees working abroad from the main employer or the company headquarters. The questions often involve whether the employment relationship can remain at-will, whether the employee can be paid in home currency, whether the home benefits plan covers the employee while out of the country. The expectation appears to be that citizenship defines employment status. The only time citizenship relates to employment status is in response to questions of immigration – can the citizen of this country lawfully be employed in that country? In — dare I say it — all countries, citizenship of the employee does not define the application of employment laws.

In the vast majority of situations, the location in which the employee performs the services governs the person’s employment rights. Do laws sometimes follow citizens? Yes. Do contract benefits executed in one location sometimes follow employees to another location? Yes. Yet in neither case can the more generous benefits in the host country be automatically eliminated by the less generous obligations imparted in the home country, absent very special circumstances. It is all about where the employee performs the services. In the employment context, if assumptions are to be made, they should be made in favor of the law of location.

Trial by Formula Revisited: Tyson Foods, Inc. v. Bouaphakeo and the Future of Wage & Hour Class Actions

Posted in Compensation, Federal Law, FLSA, Wage & Hour

Some important Supreme Court cases are hard to accurately capture in a sound bite, and this is one of them. In a narrow holding, the Supreme Court issued a 6-2 decision in Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. ___ (2016), addressing class claims for overtime compensation certified under Federal Rule of Civil Procedure 23 and the Fair Labor Standards Act of 1938 (FLSA). The Court rejected the employer’s appeal, which sought a blanket rule barring use of statistical proof to establish the elements necessary to certify a class or collective action. Some in the plaintiffs’ class action bar will no doubt cheer. However, Justice Kennedy’s opinion for the majority, joined by all but Justice Thomas, provides an analysis revealing that, in the right employment counsel’s hands, this decision can be a relatively powerful weapon in defeating class or collective action certification. Indeed, as we note below, the Tyson decision responds to and is limited by the Mt. Clemens presumption, which notes that in the absence of records it would be presumed that overtime was worked, and the question is how that overtime would be calculated. Although class action lawyers will surely write extensively about the reach of the opinion, at heart, this is a wage and hour case and to understand it properly, one should read it in that context.

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Secretary of Labor v. U.S. Steel Corporation, Inc. and OSHA’s Continued Stand Against Employer Retaliation

Posted in OSHA, Workplace Safety

Employers, do your safety policies and procedures require employees to immediately report their injuries? Do you discipline employees for failing to follow your safety policies and procedures?

Most employers with safety programs in place probably answered “yes” to both of those questions and probably believe that both of those propositions are central to managing their safety programs. Standing on their own, each of those propositions is fine. However, applying the discipline policy to an instance where an employee fails to immediately report an injury can run afoul of OSHA’s prohibition on employer retaliation.

Last month, the Secretary of Labor filed a lawsuit against U.S. Steel Corporation, Inc. (U.S. Steel) in the U.S. District Court for the District of Delaware on behalf of two U.S. Steel employees because U.S. Steel allegedly retaliated against them for failing to immediately report their workplace injuries, as required by company policy.

The complaint alleges, among other things, that U.S. Steel’s immediate reporting policy “discourages employees from reporting injuries as soon as they realize they have been injured because they must risk violating the company’s temporally stringent requirement under its immediate reporting policy.” Further, the complaint alleges that U.S. Steel’s immediate reporting policy “violates the governing regulations establishing a recordkeeping system for recording workplace injuries and illnesses by creating a barrier for reasonable employees to report workplace injuries and illnesses.” Accordingly, the Secretary of Labor seeks to reverse the disciplinary action taken against the employees and enjoin U.S. Steel from enforcing its immediate reporting policy and to nullify it.

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Start Planning! The Department of Labor’s White Collar Overtime Rules Are Coming…For Real!

Posted in Department of Labor, FLSA

On Monday, March 14, 2016, the Department of Labor (DOL) sent its final rule revising the white collar overtime exemption regulations of the federal Fair Labor Standards Act (FLSA) to the White House Office of Management and Budget (OMB).

The OMB’s review is the final step in the regulatory process before the revised regulations are published in the Federal Register. Although the OMB has 90 days to review the revised regulations, it typically takes the OMB less time to review regulations and publish them. Thus, a final rule regarding the white collar overtime exemption regulations could be published as early as this spring, about 3-4 months before employers most recently were led to believe.

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New White Collar Exemption Regulations Are Upon Us – Are You Prepared?

Posted in FLSA, Wage & Hour

On March 14, 2016, the U.S. Department of Labor (DOL) via its Wage and Hour Division forwarded its proposed modifications to the white collar exemptions of the Fair Labor Standards Act (FLSA) to the Congressional Office of Management and Budget (OMB). This is the final step before the new regulation is officially published, allowing Congress to begin reviewing it. OMB may take as many as 90 days to review the new regulation before it is published. After that, Congress will have 60 days to analyze it and hold hearings on the impact of the new regulation prior to its effective date.

The DOL had circulated a draft for public comment in July 2015. That draft prompted over 200,000 responses from various groups and individuals representing virtually all points of the political spectrum. It is likely that the stronger voices among the commentators will also make their opinion known to their representatives when the regulation is published.

The key feature of the new white collar regulation was the rise in the salary basis test applicable to many administrative, executive and professional exempt employees. Under the existing regulations, administrative, executive and professional exempt employee must meet both a salary basis test (be paid at least the minimum salary amount provided in the regulations, last amended in 2004) and a duties test (which requires that the primary duty of the exempt employee meet the elements of the applicable exemption). The proposed regulation suggested increasing the minimum qualifying salary amount from $455 a week to $970 (or from $23,660 annually to $50,440). The regulation also left open a possibility of adding a quantitative component to the duties test, which would suggest that the primary duty of the exempt employee should also occupy the majority of that employee’s time (i.e. 50%). The current regulations do not require a quantitative analysis, only a qualitative analysis of what is the primary duty of the exempt employee.

With this new regulation taking effect potentially only 4 months from now, employers should take steps to address questions that are sure to arise regarding the eligibility, or lack thereof, of individuals who may not meet the new salary basis test.

Governmental Regulations Do Not an Employee Make

Posted in Employee Classifications, FLSA

The Seventh Circuit recently affirmed the district court’s decision in Callahan v. City of Chicago, 75 F. Supp. 3d 791 (N.D. Ill. 2015). Callahan, a taxi driver in Chicago, brought suit in district court against the city, pursuant to the Fair Labor Standards Act (FLSA), arguing that the city’s extensive regulations of the taxi industry made her a de facto employee of the city, and that as its employee, the city was required to pay her minimum wage.

The district court granted the city’s motion for summary judgment after an extensive analysis of the city’s control over the taxi industry—and ultimately this particular plaintiff’s manner of work—under the economic realities test. The Seventh Circuit three-judge panel did not require as much in affirming the dismissal of Callahan’s FLSA claims. By focusing on the bigger picture, the Seventh Circuit panel highlighted the endless and unintended consequences that a finding of employee status would have. The policy implications ultimately weighed heavily in favor of the city, regardless of whether taxi drivers were vital to the city, or that the city’s regulations amounted to significant control over taxi drivers’ work.

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