In this special installment of LaborSpeak, our lawyers provide a review of important labor and employment-related trends in the first half of 2023, including employee protections, attacks on non-competes, and the continued rise of labor union activity. In addition, we briefly discuss issues employers should be aware of in the second half of 2023, particularly layoffs and increasing employment litigation amid a tighter job market.
Our LaborSpeak video series examines critical trends and issues affecting employers nationwide. We invite you to subscribe to our YouTube channel, and you will be alerted as we drop new videos in the future.
Transcript
As we reach the mid-year mark of 2023, we wanted to take the time to look back at some of the labor trends we've seen over the past six months. As well as our thoughts on what is next. The beginning of 2023 continued the trend from the past two years of being an employee friendly period. A competitive job market and government action led to higher wages and additional protections for employees since the COVID 19 pandemic began. Specifically: The Speak Out Act, which went into effect in December 2022 and prohibits the use of pre-dispute non-disclosure, and non-disparagement clauses related to allegations of sexual assault and/or sexual harassment. The Pregnant Workers Fairness Act, which expands upon existing law to protect employees due to pregnancy, childbirth, or related medical conditions.
We have continued to see pay transparency laws enacted across the country, including in California, New York, Rhode Island, and Washington. And here in New York, we have also seen updates to the state's model anti-harassment policy. In New York City, we have seen broader anti-discrimination protections, including a new city law prohibiting discrimination on the basis of height and weight.
We've also seen attacks on non-competes and other restrictive covenants from all branches of government this year, including the FTC's proposed rule banning non-competes, and, more recently, the NLRB General Counsel's memorandum stating that non-competes generally violate the National Labor Relations Act. The NLRB also took aim at other restrictive covenants, its McLaren Macomb decision, in which it held that certain confidentiality and non-disparagement clauses were in violation of the National Labor Relations Act. State and local jurisdictions, including Minnesota, Colorado, and Washington, DC have also joined this trend, passing legislation to limit restrictive covenants. There have also been a number of key court decisions in line with the new legislation that limit the ability of employers to prohibit competitive activity after employment has ended or even in the context of a sale. Additionally, labor union activity has been on the rise. While we have not seen an increase in unionization, we have recently seen an increase in organizing efforts, including a 53% increase in union elections.
While we do not see the current employee-friendly environment coming to an abrupt end, recent layoffs and market concerns suggest a shift in the employment law landscape. Layoffs have already begun in some sectors, including media and technology, and we expect this trend to continue and likely expand to other industries. Employers that are considering whether to conduct layoffs or close certain locations should refamiliarize themselves with the federal WARN Act and similar state laws, as compliance with such laws involve a certain amount of planning. Those employers also may want to review their severance, paid time off, and any other applicable policies that may impact what they will owe employees upon termination.
It is also possible we will see more legislation involving state WARN acts, as outdated statutes do not currently provide clear guidance on modern issues like remote workforces. We anticipate that with a tighter job market employment litigation will increase, including wrongful termination claims and litigation brought by employees pushing back on restrictive covenants. Employers can help mitigate risk by reviewing termination decisions carefully with the assistance of counsel. This may include conducting an adverse impact analysis to make sure a layoff is not adversely impacting any particular groups of employees based on categories such as age, race, or gender. Employers should remember that every employee belongs to a "protected category." We have seen an increase in so-called "reverse discrimination" claims brought by employees in the majority group, and we expect this trend to continue.
If employers plan to have employees sign separation agreements containing a release of claims, arbitration clauses, and/or restrictive covenants, employers may want to work with counsel to draft such agreements or ensure that any agreements they plan to use comply with applicable law. As noted earlier, the restrictive covenant space in particular has been changing rapidly, so employers may have provisions in their template agreements that are out-of-date. If you need guidance navigating any of the issues we discussed today or any other employment issues, feel free to contact a member of our team.