Michele Harmon
And the beat goes on. When will this yo-yo of rules ever end for employers?
I am blessed to be able to write this article once per month, and my occasional musings are not intended to be political; they are my observations as a lifelong student of everything history.
Presidents get elected every four years, and unless the same President is in place for two consecutive terms, the rules that roll out of appointed boards will not stay in place for an extended period. Boards and new members are appointed when someone’s term is up. Therefore, a new President can only partially turn over an appointed board. Members serve terms. See the accompanying box in this article for an excerpt from the National Labor Relations Board’s website.
President Trump may have loosened the rules on independent contractors towards the end of his last term, but President Biden was able to tighten the restrictions on the same subject a couple of years later. I am all for term limits, but businesses will continue to be on a rollercoaster ride without a President being in office for two consecutive terms.
Adding to the consistency of the President, is the Supreme Court. Last month, I reminded you that the current conservative Court voted for the employee over Title VII discrimination.
Various groups are indeed suing to prevent the implementation of the latest rules impacting employers, and it may be a dance to see who wins the Presidency next time. Still, in the end, I predict most of the new rules will continue no matter who gets elected in November 2024.
Moving on, the various boards at the national level have been ruling in favor of employees and not employers. What follows is a list of the changes that will impact employers, more or less immediately.
The most significant rule change for most of you is the rule against non-compete agreements. I have seen non-competes carried to the extreme, and thus, there is a reaction for every action. There was no need for your water hauler to sign a noncompete.
On April 23, 2024, the Federal Trade Commission (FTC) voted to prohibit most new non-compete agreements in employment contracts. Also, all current non-compete agreements, except those covering senior executives, are unenforceable and require employers to notify current and former workers that the non-compete agreements are no longer in effect. The effective date is September 4, 2024. The U.S. Chamber of Commerce has already sued to block the rule.
The FTC says its motive is to increase work mobility.
The FTC defines non-compete clauses as a term or condition of employment that prohibits a worker from, penalizes a work for, or functions to prevent a worker from:
- Seeking and accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the terms or conditions; or
- Operating a business in the United States after the conclusion of employment, which includes the terms or conditions.
So, what does an employer do? Employers can sit on the fence or rewrite their current agreements. Audit your current agreements, at the very least. Be smart—add non-disclosure agreements, and tighten up who can access trade secrets. Another suggestion might be to get your attorney to prepare customer non-solicitation or confidentiality agreements.
On April 29, 2024, the Equal Employment Opportunity Commission (EEOC) published its guidelines on harassment in the workplace. There is quite a bit to these guidelines, but I was pleased to see that the EEOC rules are not meant to penalize employers for “run-of-the-mill boorish, juvenile, or annoying behavior.” The behavior must create an “objectively hostile or abusive work environment that a reasonable person would find hostile or abusive.”
What if an employee asks an employer not to investigate a concern? I have been there myself, and the complaint was against the CEO. My employees, yes plural, did not want me to report it because they were concerned their spouse might act against the CEO. I was terrified of what might happen to my job. However, there is a school of thought that only some complaints must be investigated. The EEOC final guidance does say that in some circumstances, and when the behavior is mild, it may be acceptable not to do a full investigation. However, if it is likely that the harassment will occur in the future, then it should be investigated.
No matter the circumstances, the employer must take corrective action that is “reasonably calculated to prevent further harassment.” However, I have been involved in training every employee for a large employer and unless substantial changes are made, the behaviors will continue. After my training for months, the behavior did not stop; the rest is history and lots more legal troubles. I should have gone to law school.
The U.S. Department of Labor (DOL) finalized a rule on April 29, 2024, reversing a Trump-era regulation designed to expand the formation and use of association health plans (AHPs) that did not have to comply with all of the Affordable Care Act (ACA). Trump tried to expand AHPs in 2018; they were struck down by a federal judge in 2019, and the dance goes on. AHPs are a great idea, and healthcare costs are out of control, but what do I know?
Finally, The Fair Labor Standards Act (FLSA) has changed the minimum pay requirement for an exempt employee to no less than $684 per workweek on a salary or fee basis through June 30, 2024. As of July 1, the per workweek salary is $844; as of January 1, 2025, it is $1,128.
My rule for all employers is to hire and terminate carefully.
“Your employees are the heart of your organization.” Dr. Michele Harmon is a Human Resource professional, supporting clients in Texas and New Mexico that range in size from five to more than 3,000 employees. Email: micheleharmon1@gmail.com