As we approach the end of 2023 and prepare to usher in the new year, it’s a good time to take a look at what’s on the horizon for labor and employment law in 2024. From potential changes to noncompete agreements to new EEOC enforcement priorities, there’s plenty to keep an eye on. In this post, we’ll take a closer look at some of the most important labor and employment items that K|W|W attorneys will be monitoring in 2024.
Federal Trade Commission Expected to Vote to Ban Most Noncompete Agreements.
In April 2024, the FTC is expected to vote on the final version of its proposal to ban most noncompete agreements nationwide.
If implemented, the proposed rule would generally prohibit employers from entering into or attempting to establish non-compete agreements with employees. Importantly, the rule would mandate employers to revoke existing non-compete agreements with employees and inform current employees that they are no longer bound by such restrictions, with only a few exceptions.
The proposed rule exclusively pertains to contracts containing a non-compete clause, which is an arrangement between an employer and an employee limiting the employee’s ability to work for a competitor, usually within a specified timeframe and geographic scope. According to the proposed rule, the definition of a “non-compete clause” would encompass any contractual provision that effectively bars an employee from seeking or accepting employment with another entity. However, the rule excludes post-employment restrictions related to soliciting the employer’s customers (non-solicitation clauses) and specific limitations on divulging confidential information (non-disclosure clauses).
U.S. Department of Labor Poised to Increase Minimum Salary Threshold.
The DOL has proposed to raise the minimum salary that must be paid in order for an employee to be exempt from the overtime requirements of the Fair Labor Standards Act. The minimum would jump from the current amount of $684 per week ($35,568 per year) to at least $1,059 per week ($55,068 per year). The threshold for highly compensated employees – for whom a streamlined duties test may be used – is proposed to increase from $107,432 to $143,988 annually. The proposed rule also includes an automatic escalator for these salary thresholds every three years. The exact salary threshold would be determined by earnings data on the date the final rule is implemented, and the proposed rule’s commentary suggests the actual yearly threshold could end up being higher than $55,068.
The final rule is expected to be released in April 2024, and will likely face immediate legal challenges, as occurred when the Obama-era Department of Labor attempted to implement a comparable increase in 2016.
Equal Employment Opportunity Commission Implements New Enforcement Priorities.
The EEOC recently released an updated Strategic Enforcement Plan (SEP), which outlines the agency’s enforcement priorities for 2024-2028. The SEP noted the agency’s commitment to advancing its objectives using investigations and targeted litigation to address systemic harassment and discrimination. The SEP also announced the EEOC’s new subject matter priorities, including the following:
- Eliminating barriers in recruitment and hiring.
- Protecting vulnerable workers and persons from underserved communities from employment discrimination.
- Advancing equal pay for all workers.
- Preserving access to the legal system.
Among emerging and developing issues, the SEP identified several areas for special attention in upcoming years:
- Preventing disability-based discrimination in standards and policies.
- Safeguarding pregnancy-related rights.
- Tackling discrimination linked to or triggered by local, national, or global events, including bias resulting from ongoing historical prejudices.
- Addressing Long-COVID discrimination.
- Tackling technology-related employment discrimination.
Besides noting its enforcement priorities, the SEP also commits the EEOC to “supporting employer efforts to proactively identify and address barriers to equal employment opportunity, cultivate a diverse pool of qualified workers and foster inclusive workplaces.”
Occupational Safety and Health Administration’s New Reporting Rules Take Effect.
OSHA has revised its regulation concerning the reporting and recordkeeping of workplace injuries and illnesses. Beginning in 2024, employers with establishments of 100 or more workers in certain designated “high-hazard industries,” including many industries in manufacturing, transportation, and healthcare, must annually submit electronic information collected on the OSHA Form 301, the Injury and Illness Incident Report and Form 300, the Log of Work-Related Injuries and Illnesses. This electronic submission is in addition to the usual Form 300A summary, which requires only aggregate data on workplace injuries at a covered establishment. Those required to file the new electronic submission must also provide their legal company name in the submission.
OSHA intends to make portions of electronic data publicly available on its website. According to OSHA, “expanded public access to establishment-specific, case-specific injury and illness data will allow employers, employees, potential employees, employee representatives, customers, potential customers, researchers, and the general public to make more informed decisions about workplace safety and health at a given establishment. OSHA believes that this accessibility will ultimately result in the reduction of occupational injuries and illnesses.”
The new regulation takes effect January 1, 2024, and covered employers must electronically submit the required information by March 2 of each year. As a result, March 2, 2024, will be the first submission deadline for the new information required under the rule.
U.S. Supreme Court Considers Whether Job Transfer Without “Significant Disadvantage” Can Be Unlawful Discrimination
On December 6, 2023, the U.S. Supreme Court heard oral arguments in the case of Muldrow v. City of St. Louis, Mo., which centers on the question of whether job transfers, not resulting in a “significant disadvantage” for workers, fall within the prohibitions outlined in Title VII of the Civil Rights Act of 1964.
Title VII prohibits employers from refusing to hire, terminating, or otherwise discriminating against any individual based on race, color, religion, sex, or national origin concerning compensation, terms, conditions, or employment privileges. Jatonya Clayborn Muldrow filed a lawsuit against her employer, the City of St. Louis, alleging that the City violated Title VII by transferring her to a new position and subsequently denying a transfer request on the grounds of her sex. She claimed that her transfer and subsequent denial of her transfer request fundamentally altered the terms, conditions, and privileges associated with employment.
Muldrow’s discrimination claim was dismissed by the federal district court, as it determined that she had not provided sufficient evidence to demonstrate harm arising from the transfer. The U.S. Court of Appeals for the Eighth Circuit subsequently upheld this decision.
During oral arguments at the Supreme Court, several Justices acknowledged that discrimination is undeniably morally reprehensible. However, they grappled with the possible consequences of Muldrow’s argument that discrimination, in and of itself, is a harm to the employee meant to be remedied by Title VII. Although a decision is pending, a ruling in Muldrow’s favor could open the door to more discrimination lawsuits by employees subject to job transfers or other changes to their employment, even when the change causes no economic or other tangible harm.
K|W|W attorneys will continue to track these developments. At K|W|W, your workforce is our priority.