Time-Limited Non-Enforcement Exception to FLSA New Rules


As you are by now aware the Department of Labor’s Final Rule updates the salary level required for exemption from overtime. These changes go into effect December 1, 2016 and the result is that millions of employees will have to be reclassified as non-exempt.

The salary threshold change sets the standard salary level at $913 per week or $47,476 annually for a full-year worker.

However, the Department of Labor has issued one time-limited non-enforcement exception to be aware of. For providers of Medicaid-Funded services for individuals with intellectual or development disabilities in residential homes and facilities with fifteen or fewer beds, the Department of Labor will not enforce the update salary thresholds until March 17, 2019 against these provider employers.

If you have questions about employment law or other civil litigation issues, please call Tracy Stroud at 252-321-2020.


Defend Trade Secrets Act of 2016 and Employment Agreements


On May 11, 2016, President Obama signed the Defend Trade Secrets Acts of 2016 (DTSA) into law and the law took effect immediately. It provides federal civil remedies for misappropriation of trade secrets and aligns the definition of trade secrets with the Uniform Trade Secrets Act, which most states have adopted.

The Act prohibits a wide range of conduct from theft to violation of a preexisting duty owe by the defendant or even by some third party. Such a preexisting duty may be express, arising from a contract or implied, such as the duty of employees to protect the trade secrets of their employers.

There are two ways a person or company may be found liable in a civil action for misappropriation of trade secrets under the DTSA: (1) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (2) disclosure or use of a trade secret of another without express or implied consent.

Employment agreements needs to be updated if they include language about misappropriation of trade secrets. It makes sense to review your agreements to preserve all rights and to make sure employees are aware of their rights under the new law. For example, the DTSA does provide protections to employees divulging trade secrets for whistleblowing purposes. DTSA cannot be used to restrict employees from moving to jobs with competitors. Companies will still have to look to state law and restrictive covenants to protect them in that arena. State law is not pre-empted by the DTSA.

Please call Tracy Stroud with questions about employment law or other civil litigation issues at 252-321-2020.

EEOC Lawsuits and LGBT Employment Rights


No federal law explicitly bans discrimination on the basis of sexual orientation; therefore, LGBT employees can still face discrimination in the workplace. The EEOC issued guidance several years ago that discrimination against an individual because of sexual orientation is discrimination because of sex and therefore is prohibited under Title VII.

On March 1, 2016, the EEOC filed two federal cases, one in Maryland and one in Pennsylvania, challenging discrimination on the basis of sexual orientation as sex-based discrimination.

The lawsuit against Scott Medical Health Center is a harassment lawsuit. It alleges that the manager of a gay male employee repeatedly used anti-gay epithets and made other offensive comments about the employee’s sexual orientation. The clinic’s director refused to stop the harassment after the employee complained.

The lawsuit against IFCO Systems is a harassment and retaliation lawsuit. A lesbian forklift operator was fired after she complained she was being harassed by her supervisor.

Sexual discrimination charges filed with the EEOC based on sexual orientation are also on the rise. In fiscal year 2015, ending September 30, 2015, the EEOC has received 1,412 charges that included allegations of discrimination based sexual orientation, gender identify or transgender status. That is a 28% increase from fiscal year 2014.

Even though federal law does not explicitly prohibit discrimination based on sexual orientation, best practice for employers is to include sexual orientation status as a protected classification in its employment handbook. Further best practice is to treat discrimination and harassment on the basis of sexual orientation as the employer would any other form of discrimination.

If you have questions about employment law or other civil litigation issues, please call Tracy Stroud at 252-321-2020.

An Act to Restore the State Tort Claim for Wrongful Discharge


The General Assembly adjourned the 2016 short session late in the evening on Friday, July 1, 2016.  Before they adjourned, they added language to House Bill 169 to restore state claims to sue for wrongful employment discharge for discrimination that HB 2 took away.  The bill, HB 169, was an effort to address that one concern with HB 2.  However, this is only a partial restoration in the way that the statute of limitations for wrongful termination in NC was cut from 3 years to 1 year.  Further, the State’s public policy as set forth in N.C.G.S. s 143-422 still only provides for discrimination based on ‘sex’ (like HB 2’s “biological sex”) and not ‘gender.’  You can read HB 169 here: http://www.ncleg.net/Sessions/2015/Bills/House/HTML/H169v7.html

If you have questions about employment law or other civil litigation issues, please call Tracy Stroud at 252-321-2020.