On May 18, 2016, the Department of Labor published a Final Rule updating the salary and compensation requirements for executive, administrative, and professional employees. It fundamentally changes the qualifications for exempt status under the overtime requirements of the Fair Labor Standards Act (FLSA). The Final Rule’s admitted purpose is to extend overtime pay to an estimated 4.2 million workers who are currently classified as exempt. Before the Final Rule takes effect on December 1, 2016, it is important that employers identify affected employees and plan to either compensate them as “non-exempt” (including application of overtime rules as well as record and timekeeping requirements), or increase their compensation to meet the prerequisites of the Final Rule.

In summary, the Final Rule does the following:

  • Sets the minimum salary threshold at $913 per week or $47,476 annually for a full-year worker – doubling the previous minimum threshold;
  • Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new minimum salary threshold, with certain limitations;
  • Sets the total annual compensation requirement for highly compensated employees at $134,004; and
  • Establishes a mechanism for automatically updating the salary and compensation levels every three years, beginning on January 1, 2020.

The Final Rule can be found at: https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.htm.

As many employees will not welcome a change to “non-exempt” status, employers should take care in determining how best to accommodate the required changes, keeping in mind that an employee cannot waive the classification requirements. As both federal and state wage and hour laws are complex and have intricacies that are not always obvious or intuitive, employers are urged to seek legal counsel with questions or when the appropriate classification is not clear. We take this opportunity to remind employers that best practices encourage conducting a periodic classification audit of all positions in order to ensure compliance with ever changing wage and hour requirements, and that changes in classifications require some strategic consideration to avoid highlighting potential liability to plaintiffs’ lawyers.

If you have questions or need assistance in complying with the Final Rule or determining the best approach, please do not hesitate to contact any member of the Fabian VanCott Employment & Labor Group.

At the stroke of midnight last night, Utah’s 2016 Legislative Session came to a close.  Several new laws were passed that will impact Utah employers.  Here are a few highlights:

Non-Competes.  Many of you have been following House Bill 251 that took aim at covenants not to compete.  After much disputing and negotiating, the final version of the bill (entitled the Post-Employment Restrictions Act) makes void any post-employment restrictive covenants of more than one year in duration (expressly excluding nonsolicitation, nondisclosure and confidentiality agreements) entered into on or after May 10, 2016.  Employers should beware that any non-complying noncompete provision will be void and unenforceable – not just limited to a one year enforcement period.  Employees may also recover fees and costs if litigating against a void covenant.  Employers should carefully review employment agreements and other instruments, as well as policies and procedures to ensure compliance.  We recommend review of these forms by counsel.  The Act has exceptions for “reasonable” severance agreements, and non-compete agreements stemming from the sale of a business under some circumstances.   (By Greg Saylin)

Computer Technicians.  Utah passed a law requiring the Reporting of Child Pornography, including criminal penalties for those who violate it.  A computer technician who comes across what is or appears to be child pornography on a computer or other electronic device in the course of employment must report that image or be guilty of a class B misdemeanor. The report must be made to either: (1) a state or local law enforcement agency, or the Cyber Tip Line at the National Center for Missing and Exploited Children, or (2) an employee designated by the employer to receive and forward any such reports to one of the aforementioned agencies. The technician will not be held liable for failing to report the image based on a reasonable belief that the image was of a person 18 years or older.  Moreover, a technician or designated employee acting in good faith in either making or not making a report is immune from criminal or civil liability related to reporting or not reporting the image.  Employers should train their computer technicians on the reporting requirements and consider designating a manager to receive reports from employees.   (By David Kelley)

Accommodations for Pregnant or Breastfeeding Employees.  Senate Bill 59 amends the Utah Antidiscrimination Act to require that all covered employers (including any person with fifteen or more employees) provide a requesting employee with a reasonable accommodation related to pregnancy, childbirth, breastfeeding, or related conditions.  The employer may not terminate or deny employment opportunities on the basis of the above listed conditions.  There is an exception to the requirement to provide a requested accommodation when it would be an undue hardship, defined as creating “significant difficulty or expense when considered in relation to factors such as the size of the entity, the entity’s financial resources, and the nature and structure of the entity’s operation.”   Employers should train supervisors and managers on the new requirements to ensure compliance.  (By Kirsten Allen)

If you have questions or need assistance, please contact your Fabian VanCott attorney or any member of the Employment & Labor Group.

Employment & Labor Practice Group

 

 

For those of you following the progress of House Bill 251, Fabian VanCott shareholder Greg Saylin attended the public forum this morning hosted by the Chamber’s working group and Speaker Hughes, Sen. Adams and Rep. Schultz at the State Capitol. While further amended (HB0251S03_021), the bill continues to progress and is scheduled for committee hearing this afternoon at 4:00 pm in Senate Building 215. This morning, significant and influential members of the business community voiced strong and passionate stands both for and against the bill. Some felt strongly that noncompetes should be abolished in their entirety and that the current version of the bill does not go far enough, and a few of Utah’s biggest employers announced at the forum that they will no longer enforce their noncompete agreements regardless of the outcome of the legislation. Other business leaders expressed that the bill is dangerous to the economy and to Utah’s status as one of the most business friendly states, and that in its present form, the bill would be injurious to their businesses and their ability to protect their hard-fought goodwill and the significant investments made in their employees. Others recognized that there are concerns that need to be addressed, particularly the misuse of noncompetes by “bad actors,” but that the bill should be postponed so that it can be more fully vetted and honed prior to the next legislative session. What is clear is that there is no consensus in the business community as to House Bill 251.

If you have an opinion about the legislation and have not conveyed it to your state senator or representative, we urge you to consider contacting them or attending this afternoon’s hearing. If you need your representatives’ contact information, please click here. With the Senate hearing today and the legislative session quickly coming to a close, the fate of the bill will be decided shortly.

As always, if you have questions or concerns, please do not hesitate to contact your Fabian VanCott attorney. Once the outcome is determined, we will advise clients about strategy, modifying employment agreements and policies, and addressing concerns about protecting their business interests.

Employment & Labor Practice Group

This article is to update you about the status of House Bill 251 (Post Employment Restrictions Amendments) pending in the Utah Legislature that concerns employee noncompete agreements.  A significantly revised bill unanimously passed through the House yesterday, and now is being sent to the Senate for consideration.  The revised bill is available here: H.B. 251 Post-employment Restrictions Amendments

Highlights of the changes since our last update include:

•Express exceptions for nonsolicitation and confidentiality agreements
•Added protections for employer proprietary, confidential or trade secret information
•No application to agreements entered into prior to July 1, 2016
•While somewhat unclear in its application, the new language permits restrictive covenants that have the purpose of protecting proprietary, confidential or trade secret information, an employer’s business relationships with customers or employees, or investments made in an employee’s training, education or signing bonus
•An exception for noncompete agreements related to the sale of a business
•An exception for severance agreements signed at or after termination
•Codification of case law that restrictive covenants must be reasonable in time, scope and geography

While the changes significantly address some of the concerns of employers, we urge you to continue to monitor the progress of this important legislation and contact your legislators with your input. We will keep you apprised of the outcome and whether you need to adjust your contracts, policies and practices. As always, please contact your Fabian VanCott attorney with questions or if you would like to discuss further.

The full text of the bill can be found at:  Post-Employment Restrictions Amendments
The Employment & Labor Law Practice Group

Our Employment & Labor Law Practice Group has become aware of a bill pending in the Utah legislature that would radically impact an employer’s ability to enforce covenants not to compete.  Like in California, the new law would prohibit “post-employment restrictions” on an employee’s ability to compete with an employer after termination.  An employer seeking to enforce such a provision (with no carve out for contracts that predate the legislation) would be liable for the employee’s actual damages, including all costs and attorneys’ fees.

As this legislation would significantly impact your ability as an employer to protect your business assets, goodwill, and confidential/proprietary information, we urge you to consider contacting your state senator and representative to express your opinion about the proposed legislation.  We will keep you apprised of the outcome and whether you need to adjust your contracts, policies and practices.   Please contact your Fabian VanCott attorney with any questions or to discuss further.

The full text of the bill can be found at:  Post-Employment Restrictions Amendments

 
The Employment & Labor Law Practice Group

 

Two of the region’s most highly respected law firms, Fabian Clendenin and Van Cott, Bagley, Cornwall & McCarthy, today announced they have combined practices, resulting in one powerhouse firm, Fabian VanCott. Beginning this month, Fabian VanCott will conduct business from the offices of former Fabian Clendenin located at 215 S. State Street in Salt Lake City, and 601 S. 10th Street in Las Vegas, Nevada.

Built from more than 200 combined years of foundational knowledge, and unwavering principles and values, this newly formed alliance of these two firms provides a formidable breadth and depth of legal expertise. Fabian VanCott will continue to provide a national clientele with business and litigation legal expertise in numerous areas of practice, including complex litigation, intellectual property, real estate, administrative & regulatory compliance, environmental & natural resources, bankruptcy & receivership, business transactions & corporate law, venture capital & financial, tax & estate planning, tax controversies, white collar criminal defense, employment & labor law, ERISA & employee benefits, and litigation, trial & appeals.

With roots dating back to the late 1800’s, the joint firms established prominence in the business and legal community by representing several of the largest industries and organizations located in the Intermountain West. Fabian VanCott is a contender to any of the region’s largest firms while providing localized knowledge of the community and business climate at competitive pricing.

“Combining the exceptional and diverse talent of two reputable firms provides exponential benefits to our clients and to the business community as a whole,” said Peter W. Billings, named President of Fabian VanCott. Billings continued, “We believe this alliance will add important practice areas and additional expertise which will allow us to serve our clients even better.”

“As a legacy firm established in 1874, we are confident that joining forces with Fabian at this time preserves our impeccable reputation yet opens the door to new opportunities now and in the future,” said Gregory Williams, president of Van Cott, Bagley, Cornwall & McCarthy. “As a unified organization, we will continue to serve the highest caliber clients and attract the most extraordinary legal talent.”

Fabian VanCott employs the legal expertise of more than 70 attorneys recruited from the country’s leading law schools and legal firms.

 

Fabian Clendenin, a Salt Lake City, Utah based law firm is pleased to announce that Eleissa C. Lavelle has joined its Las Vegas office as “Of Counsel”.

Eleissa has more than 30 years of experience as a trial, appellate and transactional attorney, while also having extensive experience as a mediator and arbitrator.  She has been involved as an advocate and arbitrator in a number of matters involving public and private construction, real estate and commercial disputes, including those arising from the development, financing, construction, leasing and management of shopping centers, offices, industrial facilities and residential projects. As a mediator and arbitrator, Eleissa has resolved disputes involving dissolution of business enterprises, trust administration, financial institutions, investments, and a wide variety of commercial property and real estate transactions. (more…)

Fabian Clendenin is pleased to announce that Bryant W. Jensen has joined the law firm as an associate.

Bryant’s law practice focuses on tax and estate planning, tax litigation and business and corporate law. In the area of taxation, he comes to Fabian Clendenin having earned his master of laws in taxation from New York University School of Law, while also holding a master’s degree in accounting from the Jon M. Huntsman School of Business at Utah State University, where he graduated magna cum laude. (more…)