Patrick Administration Seeks to Ban Non-Compete Agreements

April 15, 2014 Leave a comment

During the past several years, there have been various legislative initiatives in Massachusetts which, if successful, would have regulated and/or curtailed the use by employers of non-competition agreements.  On September 10, 2013, in testimony before the Massachusetts Legislature’s Joint Committee on Labor and Workforce Development, Gregory Bialecki, Governor Patrick’s Secretary of Housing and Workforce Development, testified that the Patrick Administration supports the “outright elimination of enforceability” of all non-compete agreements in Massachusetts, regardless of duration or geographic scope.  Secretary Bialecki’s testimony finally confirmed publicly what many assumed was the Patrick Administration’s position on this controversial subject.

Last Thursday, the Patrick Administration took a bigger step towards its goal of eliminating non-compete agreements by way of an economic stimulus bill that includes a proposed new Chapter 93K to enact the Uniform Trade Secrets Act (“UTSA”) in Massachusetts. The proposed Chapter also includes a provision which would render “void and unenforceable” any non-compete agreement with an employee or independent contractor.

For more information on what this means for employers, please see the full Alert.

If you have any questions, please feel free to contact a member of MBBP’s Employment Law Group.

Employment Law Clip: Internships – Paid or Unpaid?

April 14, 2014 Leave a comment

Student internships have become increasingly popular, and while internships generally benefit employers and interns alike, there is uncertainty regarding whether internships may be paid or unpaid. This video explains the importance of distinguishing between the nonprofit and for profit sector and the regulations that apply to each.

Want more information? Try some of our other resources on this topic:

Please feel free to contact any member of our Employment Law Group with any questions on paid or unpaid internships.

MBBP’s Employment Law Clip Series provides quick, easy-to-digest snapshots of common Employment issues, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls. Stay tuned for the next topic on Restrictive Employment Agreements.

Will Your Interns Sue You for Unpaid Wages?

April 8, 2014 Leave a comment

The end of last summer’s internship season was marked by a wave of class-action lawsuits filed by interns against entertainment, sports, and publishing companies. The interns sued for unpaid wages and overtime claiming that they in reality were employees of these companies. These much publicized lawsuits, including those against Condé Nast Publications, Fox Searchlight Pictures, Inc., Hearst Corporation, and Sean “Diddy” Combs’s Bad Boy Entertainment, led many businesses to end their internship programs altogether. Here is what you must know before allowing an unpaid intern to “work” for your for-profit business.

An intern for a for-profit business must be paid unless the internship meets the requirements of the narrow “learner/trainee” exemption under the federal Fair Labor Standards Act (“FLSA”), the law governing payment of minimum wages and overtime. Failure to meet this narrow exemption could result in costly litigation and possibly significant liability; some of the businesses recently sued have had thousands of interns in the purported “class” of plaintiffs.

The U.S. Department of Labor (the “DOL”) applies a six-criteria test to unpaid interns at private-sector, for-profit businesses to determine whether the “learner/trainee” exemption is met. The DOL’s six criteria are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

This test may be hard for a for-profit business to pass if it receives an advantage from the services of the intern, for example if the intern performs low-level administrative and clerical tasks. Although most courts have applied a more flexible test, a number of courts have deferred to the DOL’s more stringent test, which in turn has prompted the wave of recent lawsuits. To avoid claims, companies in doubt about whether they will pass the DOL’s test should pay their interns at least minimum wage (and overtime unless they restrict interns from “working” for more than 40 hours per week) and keep accurate records of the interns’ time “worked.”

For more information on this topic, and other information about having an internship program, please contact a member of the Employment Practice Group.

Employment Law Clip: Protective Employment Agreements – Protecting Client Relationships & Confidential Information

March 31, 2014 Leave a comment

This video discusses the use of employment agreements to protect client relationships and confidential information. We describe the three types of protective agreements: non-competition agreements, non-solicitation agreements and non-disclosure agreements, and address steps employers should take to put enforceable agreements into place.

Want more information? Try some of our other resources on this topic:

Please feel free to contact any member of our Employment Law Group with any questions on Massachusetts wage payment laws.

MBBP’s Employment Law Clip Series provides quick, easy-to-digest snapshots of common Employment issues, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls. Stay tuned for the next topic on FLSA requirements for internships.

Are Your Commissioned Sales Employees Entitled to Minimum Wage and Overtime?

March 31, 2014 Leave a comment

Many employers use commission payments to increase the productivity of their sales force.  Commissioned sales people can earn significant compensation.  But, are commissioned sales people also entitled to minimum wage and overtime?

The federal Fair Labor Standards Act(FLSA) establishes a minimum wage and requires that employers pay overtime, or 1.5 times the employee’s regular rate of pay, to employees who work more than 40 hours in a workweek.  The FLSA’s minimum wage and overtime requirements apply to all employees, including commissioned employees, unless the employee comes within one of the statutory exemptions to the FLSA.

Many commissioned sales employees come within one of two statutory exemptions to the FLSA, the “outside sales exemption” or the “inside/retail sales exemption.”  An employee is exempt under the outside sales exemption if the employee’s primary duty is making sales or obtaining orders or contracts for services or the use of facilities from paying clients or customers, and the employee is customarily and regularly engaged away from the employer’s place of business.  Qualified outside sales people are exempt from both minimum wage and overtime requirements.

Commissioned sales people employed by a retail or service establishment are exempt from overtime (but not minimum wage) under the inside/retail sales exemption if (1) the employee’s regular rate of pay (including commissions) exceeds one and one-half times minimum wage and (2) more than half the employee’s total earnings are in the form of commissions.

If a commissioned sales employee does not come within one of these two narrowly defined exemptions (sales people will usuallynotqualify for other FLSA exemptions) the sales employee is not exempt and is entitled to overtime on top of commissions.

For help determining whether your sales force is exempt, or for more information on this topic, please contact a member of our Employment Law Group.

Employment Law Clip: Employee Terminations Under the MA Wage Payment Law

March 17, 2014 Leave a comment

Massachusetts employers, are you preparing to terminate employees? If so, watch this brief video highlighting important aspects of the Massachusetts Wage Payment Law that you may not be aware of when firing or laying off an employee or employees.

Want more information? Try some of our other resources on this topic:

Please feel free to contact any member of our Employment Law Group with any questions on Massachusetts wage payment laws.

MBBP’s Employment Law Clip Series provides quick, easy-to-digest snapshots of common Employment issues, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls. Stay tuned for the next topic on Restrictive Employment Agreements.

Scott Connolly Speaks at MCLE Employment Seminar

March 3, 2014 Leave a comment

MCLE Proving & Valuing Damages in Employment Cases PanelistsOn Friday, February 28, 2014, MBBP Employment Attorney Scott Connolly served as a panel speaker at the Massachusetts Continuing Legal Education’s (MCLE) annual seminar on Proving & Valuing Damages in Employment Cases. Among the topics Scott covered from the defense perspective were whether and how to effectively use financial experts at trial, ways for defendants to avoid/minimize punitive damages, limiting emotional distress damages, and whether unemployment benefits should be deducted from back-pay awards. Other members of the distinguished panel were Honorable Peter M. Lauriat, Superior Court Justice, Eugenia M. Guastaferri, Senior Hearing Officer at the Massachusetts Commission Against Discrimination and employee-side advocates Inga S. Bernstein and David E. Belfort. Scott defends clients from employment-related lawsuits before state and federal courts and agencies.

Please feel free to contact Scott with any questions.

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