On August 10, 2018, Governor Baker signed a bill reforming the use of non-competition agreements in employment contexts. The bill, referred to as the Massachusetts Noncompetition Agreement Act (the “Act”), goes into effect on October 1, 2018 and does not retroactively impact contracts entered into before that date.

Definition of “Non-Competition Agreement”

The Act defines a non-competition agreement as “an agreement between an employer and an employee, or otherwise arising out of an existing or anticipated employment relationship, under which the employee or expected employee agrees that he or she will not engage in certain specified activities competitive with his or her employer after the employment relationship has ended.” The definition specifically excludes non-solicitation agreements, non-competition agreements made in connection with the sale of a business or its assets, forfeiture agreements, non-disclosure agreements, non-competition agreements made in connection with the end of employment where the employee is expressly given seven (7) business days to rescind acceptance, and agreements where the employee agrees to not reapply for employment with the same employer after their termination.

Requirements

To be valid and enforceable under the new law, a non-competition agreement:

(i) must be in writing and signed by both the employer and employee;

(ii) must expressly state that the employee has the right to consult with counsel prior to signing;

(iii) must be provided to the employee by the earlier of a formal offer of employment or ten (10) business days before the commencement of the employee’s employment, or if entered into after the date of hire provided to the employee at least ten (10) days prior to the effective date of the agreement;

(iv) must be no broader than necessary to protect an employer’s legitimate business interests;

(v) must not exceed twelve (12) months from the last day of employment, unless the employee has breached a fiduciary duty or has unlawfully taken the employer’s physical or electronic property, which could extend the duration to a maximum of twenty-four (24) months;

(vi) must be reasonable in geographic reach;

(vii) must be reasonable in the scope of proscribed activities in relation to the interests protected;

(viii) must be supported by a “garden leave clause”[1] or other mutually-agreed upon consideration;

(ix) must be consonant with public policy.

Enforcement

Non-competition agreements are not enforceable against the following types of workers:

(i) nonexempt employees under the FLSA;

(ii) undergraduate/graduate students partaking in an internship or short-term employment relationship;

(iii) employees that have been terminated without cause or laid off;

(iv) employees age eighteen (18) years old or younger.

To enforce a non-competition agreement, an action must be brought in the county where the employee resides or if mutually agreed upon by the parties, in Suffolk county.

Other Relevant Provisions

Choice of law provisions that designate a jurisdiction other than Massachusetts are not enforceable if the employee is or has been a resident of or employed in Massachusetts for at least thirty (30) days immediately preceding the end of employment.

Additionally, if a court finds an agreement unenforceable, the court has discretion to reform and revise the agreement so as to render it valid and enforceable.

If you have any questions about the new law before it goes into effect, please contact any of our attorneys.

 

[1] A “garden leave clause” is defined as a provision by which an employer agrees to pay the employee during the period of the agreement. The law states the payments made pursuant to a garden leave clause constitute wages under the Massachusetts wage statute, M.G.L. c. 149, § 148.

 

This update is provided for informational purposes only and should not be considered legal advice.

This is a brief overview of the Massachusetts substance abuse screening regulations that were signed into law in 2016 and are applicable to all public school districts. As a reminder, the regulations impose new requirements on school districts for the 2018-2019 school year.

An Act Relative to Substance Use, Treatment, Education and Prevention (the Law) was signed by Governor Charlie Baker in an effort to curb the opioid epidemic in Massachusetts. This law requires that each school district create and report to the Department of Elementary and Secondary Education (DESE) a policy pertaining to substance abuse prevention and education.

Generally, this law requires that public school districts, in an effort to reduce substance abuse, institute a verbal screening process at two grade levels. DESE recommends seventh and ninth grade as the appropriate grade levels for screening. School districts then have 90 days to report their results to the state Department of Public Health (DPH).

Beginning in the 2018-2019 school year, districts must notify parents/guardians of the screenings before the start of the school year. A parent/guardian may opt out of the screening at any time prior to or during the screening by notifying the district in writing. In recent guidance, DESE has linked to sample parent notification letters from the Massachusetts Screening, Brief Intervention, and Referral to Treatment (SBIRT).

The approved screening tool for districts to utilize is the “CRAFT-II Screening Interview.” DPH offers training on this tool to district staff at no cost. The law also permits school districts to opt-out of the verbal screening process if the district has created an alternative substance abuse screening policy.

It is also important to note that districts may not record any statement made by a student during the verbal screening that would expose the students’ identity. Unless the case requires immediate emergency medical intervention or otherwise required by state law, all student responses must be kept confidential unless the student, parent or guarding waives confidentiality in writing.

If you have any questions about the regulations discussed, or about school law generally, please contact any of our attorneys.

This update is provided for informational purposes only and should not be considered legal advice.

On July 23, 2018 a federal judge in this district denied a defendant Town’s motion for summary judgment on a Family and Medical Leave Act (“FMLA”) claim brought by a former employee. The employee sued the Town and two supervisors alleging retaliation for taking FMLA leave to care for her ill spouse. The decision is instructive on pitfalls for employers where an employee has exercised FMLA rights.

During the majority of the plaintiff’s 25 years working for the Town’s Recreation Department she received positive reviews. In 2015, her husband became ill and the plaintiff informed her supervisor, the Assistant Town Manager, that she would need to attend appointments with her husband.  The Assistant Town Manager told the plaintiff to take all the time she needed, and informed the Town Manager of the situation.  Around this time, however, the Town observed that the plaintiff had failed to complete certain assignments, missed meetings, and played tennis during the Recreation Department’s business hours.

As the Town commenced an investigation into this alleged misconduct, the plaintiff requested intermittent FMLA leave to assist her husband. The Human Resources Director and Assistant Town Manager then informed the Town Manager that the plaintiff would be exercising her FMLA rights.  A week later, the Town demoted her. (While the Assistant Town Manager told the plaintiff it was because she could no longer trust her, a Recreation Department employee claimed that the Assistant Town Manager told him it was due to the time the plaintiff needed to attend to her husband’s illness.)  The Town and the plaintiff also entered into a Last Chance Agreement (“LCA”) which provided for termination in the event she engaged in misconduct.  After a series of poor interactions between the plaintiff and Town employees, the Assistant Town Manager notified her that she was being placed on paid administrative leave and likely to be terminated.  In lieu of termination, the plaintiff resigned.

Plaintiff sued, claiming that she was retaliated against for taking FMLA leave when the Town demoted her, imposed the LCA, and forced her to resign or face termination. A plaintiff claiming FMLA retaliation must first establish that: (1) she availed herself of a protected right under the FMLA; (2) she suffered an adverse employment action; and (3) there is a causal connection, i.e., that the employer took the adverse action because the employee exercised her rights.  If the plaintiff meets this requirement the employer must then articulate a legitimate, non-discriminatory reason for the adverse action.  If the employer successfully articulates a reason, the plaintiff must demonstrate that the proffered reason was not the true reason for the employment decision.

The district judge ruled that the plaintiff had met her initial requirement because (1) she had availed herself of a protected right under the FMLA when she took time to assist her husband’s medical needs and requested FMLA paperwork; (2) she had suffered an adverse employment action when she was demoted, allegedly forced to sign the LCA, and forced out of her position; and (3) there was a causal connection where she was demoted just a week after formally requesting FMLA paperwork and the ultimate decision maker (the Town Manager) was presumed to be aware of the plaintiff’s need to take FMLA leave because the Assistant Town Manager’s knew of it.

The judge next found that the Town had articulated a non-discriminatory reason for its actions because there was evidence that the plaintiff had engaged in misconduct. The judge also ruled,  however, that the plaintiff had met her obligation of showing that the Town’s reason was a pretext because she had successfully worked for the Town for over two decades but her relationship with Town management only deteriorated after she had invoked her FMLA rights. The judge therefore ruled that there was sufficient evidence for the plaintiff to have a jury decide her claim.

This decision serves as an important reminder for employers that caution must be exercised when taking employment actions where the employee has asserted FMLA rights.  In most situations it will be wise to consult with an attorney in order to decide whether to take action and, if so, how to do it in a way which minimizes legal exposure.

If you have any questions regarding the content of this update, or any other questions regarding labor or employment law generally, please contact us.

This update is provided for informational purposes only and should not be considered legal advice.

The following is a summary of several key provisions of the new paid family and medical leave law. It is not intended to cover all aspects of the new law. This law is mandatory for all private sector employers effective January 1, 2019. Because it is a local option statute, public employers will not be subject to the law unless and until accepted by vote of the local legislative or governing body. Please note that certain provisions of the law go into effect on January 1, 2019, while other provisions go into effect on later dates through 2021. We will continue to publish updates on this topic once regulations are promulgated and as the various provisions of the law go into effect.

What the law does

Chapter 121 of the Acts of 2018 (“the law”) establishes a paid family and medical leave program in Massachusetts. Beginning January 1, 2021, Massachusetts employees will be able to take paid medical leave for their own serious health condition as well as paid family leave to bond with their child during the first 12 months after the child’s birth (or placement through the adoption/foster care process). Beginning July 1, 2021, employees will be able to take paid family leave to care for a family member with a serious health condition. The law also provides paid family and medical leave for employees who are in the armed forces or who have family members in the armed forces.

Employees will be entitled to take up to 12 weeks of paid family leave in a year and up to 20 weeks of paid medical leave in a year; however, the total amount of leave an employee may take in any given year (for family and medical leave combined) will be limited to 26 weeks. While on leave, employees will be paid a “weekly benefit amount” determined by the new Department of Family and Medical Leave.

Who the law affects

Like the 2015 earned sick time law, the new family and medical leave law is a local option statute. It automatically applies to all private employers in Massachusetts, but it will not apply to any municipality, district, political subdivision, or instrumentality of the commonwealth unless adopted by vote of the local legislative or governing body.

Public employers in municipalities that do not accept the law will continue to be subject to the provisions of the federal Family and Medical Leave Act (“FMLA”) and any existing medical/family/disability leave policies and collectively bargained agreements.

How the law works

The law establishes a new Department of Family and Medical Leave (“the department”). Beginning July 1, 2019, the department will begin to collect contributions from employees and employers with 25 or more employees. The Director of the department will set the contribution rate annually and contributions will be placed in the new “Family and Employment Security Trust Fund.” The Fund will be administered by the treasurer and receiver general.

In January 2021, when the leave entitlements begin to take effect, the department will be responsible for administering leave payments through a claims system.

The law requires employees to provide employers with at least 30 days’ notice of the anticipated start date of the leave, the expected duration of the leave, and the expected return-to-work date. While the department will handle the claims process, employers will be responsible for supplying information to the department such as information regarding an employee’s wages, earnings, and other employment information. Employers will face potential financial liability for failure to timely supply such information to the department.

Upon their return from leave, employees must be restored to the same status, pay, benefits, and seniority that they had when the leave began. The law prohibits retaliation by an employer against an employee for exercising their rights under the law. There will be a presumption of retaliation if an employer takes any adverse action against an employee during the employee’s leave or within six months after an employee returns from leave. The law also establishes a private right of action for violations of the law with a three-year statute of limitations. Employers found to have violated the law may be liable for treble damages for lost wages, benefits, and other remuneration, plus interest and attorneys’ fees.

Rolling Implementation

Even though many of the key provisions of the law do not go into effect until 2021, some provisions – such as the law’s posting and notice requirements – take effect on January 1, 2019.

Beginning January 1, 2019, employers will be required to post information about the law in a conspicuous place at each of the employer’s locations. Employers will also have 30 days to provide existing and new employees with written information about the law and obtain each employee’s written acknowledgment of receipt or refusal. Failure to adhere to the posting and notice requirements will subject employers to a fine of $50 per employee for the first violation and $300 per employee for each subsequent violation.

Additional aspects of the law take effect between 2019 and 2021. We will continue to post updates and reminders to our clients as these additional changes draw closer.

Interaction with Other Leaves

Massachusetts family and medical leave can run concurrently with parental leave and FMLA. Employers will not be permitted to require employees to exhaust their sick, vacation, or personal time prior to or while taking leave. If an employee’s collective bargaining agreement provides for greater payment than the statute, the employer will be required to pay the higher amount, although the time spent out on leave will still count against the statutory leave entitlement.

This update is provided for informational purposes only and should not be considered legal advice.

As pointed out in our June 27, 2018 Client Advisory, the Supreme Court released its decision yesterday in Janus v. AFSCME, Council 31, U.S. No. 16-466 (2018), which held that a state statute which allows public sector unions to charge non-member employees an agency service fee for activities connected with their collective bargaining activities as exclusive representative violates the First Amendment rights of those non-members. In our advisory we stated that we would provide further analysis because Massachusetts has a statute – G.L. c. 150E, §2 – which contains a requirement similar to that in the Illinois statute which was invalidated by the Court.

Two significant issues for Massachusetts employers are raised by the Janus decision. First, many employers have been making deductions for service fees from the paychecks of employees who may not be members of any of the unions which represent its employees. Second, many of those same employers are parties to collective bargaining agreements which may have provisions premised on the Massachusetts statute.

In its opinion the Court requires that employees “clearly and affirmatively consent” before service fees may be deducted from their pay because they are waiving their First Amendment right.  Slip Op. at 48. This means that an employer must assure itself of two things – (1) that each employee has consented in writing to a deduction for service fees and (2) that the consent is obtained in a manner which reasonably informs the employee that it is voluntary. In cooperation with its bargaining units, the employer should therefore determine that these requirements are satisfied. Employers will also need to promptly revise payroll systems to reflect this decision.

Regarding collective bargaining provisions, the Court did not directly address those. The collective bargaining agreement involved in Janus did, however, require payment of a service fee, slip op. at 5; the Court stated its holding in broad terms – “public-sector agency-fee arrangements are unconstitutional”, id. at 6 [emphasis added]; and it referred to a collective bargaining provision which “is found to be unlawful”, id. at 46. Given this, employers should review their agreements for language which may have to be revised through discussions with their unions. In our opinion these changes should not be subject to decision or impact bargaining requirements because they do not involve the employer’s choice to exercise a non-delegable managerial right. Instead, the Court has given employers no option by deciding that such arrangements violate the law regarding employees’ First Amendment rights.

The Court indicated that unions may have options to avoid so-called “free rider” abuses, specifically mentioning the possibility of giving non-members the choice of paying a fee for union representation in disciplinary proceedings or being denied the service. Slip Op. at 17. That sort of arrangement is between the union and the employee and should not directly involve the employer.

These issues need to be worked through carefully. We are reviewing the collective bargaining agreements between our clients and their unions to determine which may need revision. In addition, we are preparing a draft template for employees to sign when indicating their decision whether or not to authorize payroll deductions for dues or service fees.  The template can be discussed with the respective unions.

In the interim, if you have any questions please contact any one of our attorneys.

This update is provided for informational purposes only and should not be considered legal advice.