Too Hot to Handle: Don’t Get Burned by Cal/OSHA’s Heat Rules
As summer temperatures rise across California, it’s a good time for employers to review their responsibilities under Cal/OSHA’s heat illness prevention standards. These rules apply to both outdoor and indoor workplaces and are designed to protect employees from heat-related illnesses and injury.
The outdoor heat illness prevention standards apply to all outdoor places of employment. For outdoor workplaces, employers must provide fresh drinking water, access to shade, and allow cool-down rest breaks when temperatures exceed 80°F, acclimatization procedures, and emergency response procedures. Additionally, high-heat procedures are required for specific industries including agriculture, construction, landscaping, oil and gas extraction, and transportation of certain products and materials. When the temperature reaches or exceeds 95°F, additional steps are required, such as closer monitoring and more frequent communication with employees. Training is also required for all outdoor employees and supervisors so that they can recognize the signs of heat illness and know how to respond.
Indoor workplaces are also covered under a newer regulation that took effect in 2024. If the temperature inside reaches 82°F or more, employers need to provide water, cool-down areas, acclimatization procedures, emergency response procedures, and supervisor and employee training. These regulations do not apply to incidental heat exposures where an employee is exposed to temperatures between 82-95°F for less than 15 minutes in any 60-minute period, with some exceptions. If the temperature or heat index hits 87°F, or if employees wear clothing that traps heat or work near a high radiant heat area and the temperature reaches or exceeds 82°F, monitoring and additional controls are required.
Finally, under both the outdoor and indoor standards, employers are required to establish a written Heat Illness Prevention Plan. This plan must contain the procedures implemented by the employer for the provision of water, shade, or cool-down areas, emergency response procedures, acclimatization procedures, and procedures for responding to high-heat work environments.
If a business includes both indoor and outdoor work, it’s important to evaluate each area separately and make sure the right protections are in place for each environment.
SJC Confirms Nonsolicitation Agreements Are Excluded by Scope of Massachusetts Noncompetition Agreement Act
On June 13, 2025, the Massachusetts Supreme Judicial Court (SJC) issued a decision in Miele v. Foundation Medicine, Inc., confirming that the Massachusetts Noncompetition Agreement Act does not apply to nonsolicitation agreements incorporated into a termination agreement even if the termination agreement includes a forfeiture provision.
Quick Hits
In 2018, the Massachusetts Noncompetition Agreement Act (MNAA), effective prospectively only for agreements entered into on or after October 1, 2018, was enacted.
The Massachusetts Supreme Judicial Court affirmatively held that nonsolicitation agreements are not subject to the MNAA.
The parties’ dispute centered on whether a nonsolicitation agreement, although expressly excluded from the statutory definition of a “noncompetition agreement,” may nevertheless constitute a “forfeiture for competition agreement” within the meaning of the MNAA when the violation of the nonsolicitation agreement triggers a forfeiture clause.
The SJC held that just because a nonsolicitation agreement is coupled with a forfeiture provision does not change the fact that nonsolicitation provisions are excluded from the MNAA.
Factual Summary
In 2017, Foundation Medicine, Inc. (FMI) hired Susan Miele. Miele signed a restrictive covenant agreement as a condition of her employment, which included a noncompetition, nonsolicitation, and confidentiality and assignment provisions. The nonsolicitation provision barred Miele, both during her employment and for one year after the end of her employment, from directly or indirectly soliciting any employees or consultants of FMI to leave FMI or facilitate their hire by her subsequent employer.
In 2020, Miele and FMI executed a transition agreement in connection with her separation from the company, and that transition agreement expressly incorporated the restrictive covenant provisions that Miele had signed upon her hire by FMI. The transition agreement included a forfeiture provision that provided that if Miele committed a breach of any agreement with FMI, Miele would forfeit any unpaid benefits under the transition agreement and would have to immediately repay any previously paid benefits. FMI ultimately paid Miele over $1 million in transition benefits.
In 2021, after Miele left her employment with FMI, she joined Gingko Bioworks. FMI alleges that during the one-year period after she left FMI, Miele recruited several FMI employees to work at Gingko. FMI then notified Miele that she had breached her transition agreement, and that pursuant to the forfeiture clause in that agreement, FMI ceased further payments to Miele and demanded that she repay all benefits already disbursed. Miele did not comply with that demand.
Procedural History and the Parties’ Arguments
Miele sued FMI in late 2021, alleging that FMI breached the transition agreement by withholding her transition benefits. FMI counter-claimed for breach of contract, stating that Miele violated both her transition agreement and her restrictive covenant agreement, and asked the court for judgment declaring it did not need to pay Miele any additional benefits under the transition agreement.
Miele moved for judgment on the pleadings, arguing that while the MNAA did not expressly apply to nonsolicitation agreements, it should apply here because the inclusion of the forfeiture clause made the non-solicitation agreement subject to the Massachussetts noncompetition agreement. FMI argued in response that the MNAA did not apply here, noting that it only governs “noncompetition agreements” and expressly excludes non-solicitation agreements.
The lower court granted Miele’s motion in part, arguing that FMI could not enforce the forfeiture provision of the transition agreement, but also holding that FMI could still assert Miele’s breach of the restrictive covenant agreement as a defense to her breach of contract claim or from seeking damages for that alleged breach. In its holding, the lower court rejected FMI’s position that all non-solicitation agreements fall outside of the noncompetition act, and instead held that nonsolicitation agreements are only excluded if they do not impose a forfeiture provision for breach of the agreement.
FMI moved for an interlocutory ruling to the appeals court, and the SJC then allowed FMI’s application for direct appellate review.
The SJC’s Holding
The SJC framed the parties’ dispute as follows: whether a nonsolicitation agreement, although expressly excluded from the statutory definition of a “noncompetition agreement,” may nevertheless constitute a “forfeiture for competition agreement” within the meaning of the Massachusetts Noncompetition Agreement Act when the violation of the nonsolicitation agreement triggers a forfeiture clause.
In reaching its holding, the SJC looked to legislative history and the plain language of the Massachusetts Noncompetition Agreement Act, noting that noncompetition agreements do not include nonsolicitation agreements, and forfeiture for competition agreements are a subset of noncompetition agreements. The court found that it then necessarily followed that forfeiture for competition agreements also exclude nonsolicitation agreements, and that to conclude otherwise would contradict the statute’s express exclusion of nonsolicitation agreements from the broader category of noncompetition agreements.
The SJC found that the inclusion of a forfeiture clause in Miele’s transition agreement did not alter this analysis, reasoning that there was no justification for treating a nonsolicitation agreement differently simply because it includes a forfeiture provision. In support of its decision, the SJC pointed out that the critical flaw in Miele’s position was that her reading of the statute would expand the scope of forfeiture for competition agreements to include nonsolicitation provisions even though the statute clearly excluded them from the definition of noncompetition agreements. The SJC further explained that “solicitation cannot be reintroduced through a back door without rendering the statute internally contradictory.”
The SJC remanded the matter to the lower court with instructions to reverse the order partially granting Miele’s motion for judgment on the pleadings.
Key Takeaways
This decision clarifies the scope of the MNAA and provides further guidance to employers regarding remedies they can pursue or enforce for potential breaches of nonsolicitation agreements. Employers may want to review their current agreements to consider the implications of the Miele decision for their existing or future agreements.
5 Things to Know About Senate Bill 1318: Navigating New Non-Compete Restrictions for Healthcare Practitioners in Texas
On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill 1318 (“SB 1318”), which amends Texas Business & Commerce Code Section 15.50(b) to impose new limitations on physician non-competes. SB 1318 also adds a new Section 15.501, which restricts non-competes for dentists, nurses, and physician assistants. SB 1318 goes into effect September 1, 2025, and applies to agreements entered into or renewed on and after that day. Here are the five key things to know about the new law:
1. The “Reasonable Price” Buyout Standard Has Changed
Previously, Texas law required that physician non-compete agreements include a buyout provision at a “reasonable price,” often leading to disputes and uncertainty over what constituted “reasonable.” SB 1318 replaces this standard with a clear cap. Now, the buyout amount cannot exceed the physician’s total annual salary and wages at the time of termination. This change eliminates the prior option to arbitrate the buyout price.
2. New Time and Geographic Limitations
SB 1318 imposes limits on the duration and geographic scope of non-compete agreements for physicians. Non-competes may not exceed a period of one year following the end of the employment or contract, and the restricted area cannot exceed a five-mile radius from the location where the practitioner primarily practiced. These limitations apply to non-competes related to employment agreements, independent contractor agreements, or ownership documents. The limitations do not apply to physician ownership interests in a hospital or ambulatory surgery center (i.e., Section 15.50(c) remains unchanged). Additionally, SB 1318 requires that all terms and conditions of the non-compete be clearly and conspicuously stated in writing.
3. Non-Competes Are Void If Physician Terminated Without Good Cause
Physician non-compete agreements are now void and unenforceable if the physician is involuntarily discharged without “good cause.” SB 1318 defines “good cause” as a reasonable basis for discharge directly related to the physician’s conduct, job performance, or employment record. This means that if a physician is let go for reasons unrelated to their performance or conduct (i.e., without good cause), their non-compete will not be enforceable.
4. Non-Compete Restrictions Do Not Apply to Administrative Services.
SB 1318 does not create any restrictions for non-competes related to managing or directing medical services in an administrative capacity for medical practices or other healthcare providers. So, SB 1318 should not affect a majority of medical director agreements, which are purely for administrative services.
5. Expansion of Non-Compete Restrictions to Dentists, Nurses, and Physician Assistants
For the first time, SB 1318 extends non-compete restrictions to other healthcare practitioners, including dentists, professional and vocational nurses, and physician assistants. It is important to note that professional and vocational nurses include RNs, LPNs, CRNAs, nurse midwives, clinical nurse specialists, APRNs and others licensed under Chapter 301 of the Texas Occupations Code. The same requirements that apply to physicians—buyout cap, one-year duration, five-mile geographic limit, and clear written terms—now apply to these practitioners as well. Unlike physician non-competes, SB 1318 does not state that a non-compete for dentists, nurses, or physician assistants is void if the practitioner is terminated without good cause. Similarly, SB1318 does not require that these practitioners be permitted to continue treating former patients experiencing acute illness, receive a list of patients they treated during the year preceding the end of employment, or obtain access to medical records for patients if authorized.
SB 1318 represents a substantial change to Texas’s approach to non-compete agreements in the healthcare sector. By capping buyout amounts, limiting the scope and duration of restrictions, voiding non-competes for terminations without good cause, and expanding protections to additional practitioners, the law creates a more defined framework for restrictive covenants in the healthcare sector. In the meantime, both employers and practitioners should review their contracts and prepare for compliance with the new requirements.
Upcoming OSHA and U.N. Meetings May Trigger Changes in U.S. Hazard Communication Standards
On June 24, 2025, the Occupational Safety and Health Administration (OSHA) will conduct a virtual public meeting to discuss the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). The primary focus of this meeting is to gather stakeholder input and prepare for the upcoming forty-eighth session of the United Nations Economic and Social Council’s Sub-Committee of Experts on the GHS, which will take place in Geneva, Switzerland, from July 7 to July 9, 2025.
OSHA is expected to provide updates on recent regulatory activities, discuss potential changes to the Hazard Communication Standard (HCS) to align with the latest GHS revisions, and solicit feedback from industry representatives, labor organizations, and other interested parties. Key topics will include hazard classification, labelling requirements, safety data sheets, and the impact of GHS updates on U.S. regulations and workplace safety.
Quick Hits
On June 24, 2025, OSHA will hold a virtual public meeting to discuss updates to the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS) and gather stakeholder input.
The upcoming meeting of the United Nations’ Sub-Committee on the GHS will be a key forum for discussing and adopting revisions to the GHS, which OSHA will later evaluate and incorporate into U.S. regulations.
OSHA aims to improve chemical hazard communication and facilitate international trade by aligning U.S. regulations with the latest GHS updates, ensuring clarity and consistency for workers and emergency responders.
OSHA’s Hazard Communication Standard is explicitly designed to align with the GHS, which is an internationally agreed-upon system for classifying and labelling chemicals. The GHS is periodically revised and updated by the U.N. Sub-Committee based on new scientific information, stakeholder input, and evolving best practices. The July 7–9, 2025, Geneva, Switzerland, meeting is one of the key forums where such revisions are discussed and adopted by consensus among participating countries, including the United States.
When the Sub-Committee adopts new or revised criteria, label elements, or safety data sheet (SDS) requirements, OSHA reviews these changes to determine how best to incorporate them into U.S. regulations. This process ensures that U.S. chemical safety standards remain harmonized with those of major trading partners and reflect the latest scientific and technical knowledge.
Following the Geneva meeting, OSHA is expected to evaluate the adopted GHS revisions and initiate the rulemaking process to update the HCS as necessary. This may include:
revising hazard classification criteria for physical, health, or environmental hazards;
updating required label elements, such as signal words, pictograms, hazard statements, and precautionary statements;
modifying the format and content requirements for safety data sheets and
addressing new or emerging hazards identified at the international level.
For example, OSHA’s most recent update to the HCS (finalized in 2024) was based on the seventh revised edition of the GHS, with select elements from the eighth edition. This update was informed by previous UN GHS sub-committee meetings and reflects the ongoing process of international harmonization.
After the Geneva meeting, OSHA is expected to engage with U.S. stakeholders—including industry representatives, labor organizations, and safety professionals—to gather input on how the new GHS provisions should be implemented domestically. OSHA relies on the stakeholders’ input to update regulations that are designed to be practical, effective, and tailored to the needs of U.S. workplaces.
OSHA also provides transition periods for compliance, allowing chemical manufacturers, importers, distributors, and employers time to update their hazard communication programs, labels, and SDSs in accordance with the new requirements.
By incorporating the outcomes of the Geneva meeting into U.S. regulations, OSHA aims to:
improve the clarity, consistency, and effectiveness of chemical hazard communication for workers and emergency responders;
reduce confusion and compliance burdens for companies operating in multiple countries; and
facilitate international trade by ensuring that U.S. chemical products meet global labelling and classification standards.
Employers that work with materials that fall under GHS probably will not see dramatic changes in the regulations they must abide by. Instead, those changes will likely be incremental and will first be seen by those that bear the responsibility for labelling chemicals.
Does HIPAA Apply To My Business?
Varnum Viewpoints:
HIPAA applies outside of healthcare providers. If you offer employee health benefits, especially through a self-funded plan, HIPAA applies to your health plan.
You may be a covered entity or business associate. Health plans, providers, and vendors handling health data are subject to HIPAA, often to differing extents.
HIPAA has specific compliance duties. Requirements include privacy notices, policies, risk assessments, and business associate agreements.
The Health Insurance Portability and Accountability Act (HIPAA) applies far more often than many realize, including when a company outside of the healthcare sector provides certain types of health benefits to its own employees. While HIPAA compliance quickly gets complex, determining if it applies to your business does not need to be. This advisory includes helpful definitions of key terms, including Protected Health Information (PHI), the Privacy Rule, and the Security Rule.
What Is a HIPAA Covered Entity?
HIPAA applies only to covered entities, including health care providers and health plans, and their business associates. Many covered entities already know they are subject to HIPAA. This includes those in the healthcare sector, such as doctors, hospitals, pharmacies, and insurance companies, for whom HIPAA compliance should be an integral part of daily business.
Does My Employee Health Plan Make My Company a Covered Entity?
Employer-sponsored health plans are also covered entities. The design of that health plan will impact how HIPAA applies, but the Privacy Rule and the Security Rule make it clear: if employees receive health benefits, HIPAA will apply to the health plan, even if it does not apply to the company in its role as an employer generally. If an employer maintains a fully-insured plan and the insurer is handling most or all of the administration of the coverage, the employer may not receive much PHI, if any. However, as more plans move toward self-funding and self-administration, HIPAA will apply to more functions carried out by the employer.
Who Is a HIPAA Business Associate?
A business associate is any entity that creates, receives, or transmits PHI in relation to a covered entity. Business associates are subject to the same HIPAA compliance rules as covered entities, and the same penalties apply for violation of these rules. In addition, covered entities and their business associates must enter into “business associate agreements” which explicitly require the business associate to comply with HIPAA and may set forth other terms such as notification and indemnification provisions.
As with covered entities in the healthcare sector, most business associates will know that their work is subjecting their business to HIPAA. However, any business that provides products and services that are or could be used to provide healthcare should carefully assess whether and to what extent HIPAA applies to their business. For example, SAAS providers and app developers may have access to PHI, making them a business associate that must comply with HIPAA. Some covered entities will push their vendors to enter into business associate agreements, even if it does not directly apply.
What Is PHI?
Protected health information is any individually identifiable health information that is created, received, stored, or transmitted by a covered entity, an entity subject to HIPAA, such as a health care provider, insurance company, or employer health plan, or their business associates, those entities who access PHI on behalf of the covered entity.
What Is the HIPAA Privacy Rule?
The Privacy Rule is the part of HIPAA that protects PHI through limiting who can access it, how it is used, and providing individuals with rights relating to their PHI.
What Is the HIPAA Security Rule?
The Security Rule is the part of HIPAA that covers how electronic creation, storage, use, and disclosure of PHI must be done to ensure the privacy of PHI.
What Are My HIPAA Compliance Requirements?
When HIPAA applies, the entity is expected to comply with HIPAA’s broad range of requirements. Key compliance requirements include providing a notice of privacy practices, naming a compliance officer responsible for complying with HIPAA, establishing policies and procedures, conducting a risk assessment, and entering into necessary agreements, such as business associate agreements. See our detailed explanation, HIPAA and Employee Benefits: The Basics of Compliance.
Spilling Secrets: Legal Shifts in 2025 Put Employer Non-Compete Strategies at Risk [Podcast, Video]
This week, on our Spilling Secrets podcast series, our panelists discuss the current status of non-compete agreements across the nation.
Legal Shifts in 2025 Put Employer Non-Compete Strategies at Risk
Non-compete legislation is evolving rapidly at the state level, with new laws taking effect soon in Arkansas, Kansas, Virginia, and Wyoming. Looking ahead, pending bills in over a dozen states could reshape how employers approach restrictive covenants.
In this episode, Epstein Becker Green attorneys Peter A. Steinmeyer, Daniel R. Levy, David J. Clark, and Carolyn O. Boucek discuss the new and proposed state non-compete laws and their implications for employers, as well as alternative tools that can be used to address these restrictions. From expanded protections for low-wage workers in Virginia to Kansas’s focus on non-solicit provisions, this episode offers actionable takeaways to help employers stay compliant.
Listen to Our Full-Length Podcast
View a Video Summary
Employer Health Plans Must Report Number of Covered Children in New Mexico
Employers will be required to report, by July 1, 2025, the number of children in New Mexico covered by their employer-sponsored group health plans. The reporting requirement comes from regulations under the state’s Vaccine Purchasing Act, one of a handful of state laws that put surcharges on health insurers, group health plans, third-party administrators, or some combination, to fund states’ purchases of vaccinations for children in the relevant state.
Quick Hits
New Mexico’s Vaccine Purchasing Act requires employers that sponsor plans and health insurers to report the total number of children covered during the past year.
The purpose of the reporting is to help the state determine the quantity of vaccines to purchase.
The deadline to report the information is July 1, 2025.
Employers and health insurers must report to the New Mexico Office of the Superintendent of Insurance the total number of children in New Mexico who were enrolled in the plan during any part of the previous year and were under the age of nineteen as of the previous December 31. Not included are any children who are not residents of New Mexico, children who are members of a Native American tribe, and children who are enrolled in Medicaid or another medical assistance program administered by the state.
Each year, the state will estimate the amount of money needed to purchase, store, and distribute vaccines to all insured children in the state, including a reserve of 10 percent of the amount estimated.
Student Visa Pause Lifted; Social Media Will Be Screened
News sources reporting on a U.S. Department of State internal cable have announced that the temporary pause on scheduling new student visa interviews for F, M, and J visas has been lifted. This pause was initially implemented while the State Department implemented steps to expand social media screening for student visa applicants. Under the new directive, consular officers are now required to screen the social media and online presence of student visa applicants.
Quick Hits
The U.S. State Department has lifted the temporary pause on scheduling new student visa interviews for F, M, and J visas and is now requiring consular officers to screen applicants’ social media and online presences.
Enhanced vetting procedures for student visa applicants, including detailed social media scrutiny, are expected to increase processing delays and refusals, impacting international students’ plans to study or train in the United States.
Analysis and Impact
The screening process involves checking for any signs of hostility “towards the citizens, culture, government, institutions, or founding principles of the United States.” Additionally, officers will vet for support of terrorism, antisemitic harassment, violence, or militant groups. This scrutiny is part of the Trump administration’s broader efforts to address stated security concerns with universities that enroll foreign national students.
Consular officers are instructed to flag applicants with a history of political activism and to consider the likelihood of such activities continuing in the United States. Consulates will take detailed case notes and screenshots of online content. The screening applies to both new and returning student visa applicants and includes a broad definition of “online presence,” encompassing social media and online databases.
While the factors identified do not automatically disqualify applicants, they trigger further review to ensure compliance with U.S. immigration admissibility laws. The cable also directs embassies to prioritize interviewing physicians applying for a J-1 visa for medical residency and educational exchange, and students enrolled at universities where international students constitute 15 percent or fewer of the total student population.
University and Employer Impacts
Although the recent State Department cable lifts the Trump administration’s pause on visa interviews for F, M, and J visa applicants, the heightened vetting procedures, particularly enhanced scrutiny of applicants’ social media histories, are likely to increase visa processing delays and refusals. International students planning to enter the United States for academic study or work-based training can expect:
Longer processing times due to expanded vetting and limited appointment availability, especially as demand grows over the summer ahead of the fall academic term.
Consular backlogs and capacity constraints that may further slow visa issuance.
Additional documentation requirements, including:
usernames for social media platforms;
detailed biographic and travel histories; and
sensitive personal information covering the last five years.
Greater risk of delays or denial, as adjudications may hinge on subjective interpretations of social media content and other discretionary factors.
It Is Not Always Sunny in Philadelphia for Employers—Meet the POWER Act
On May 27, 2025, Philadelphia Mayor Cherelle L. Parker signed into law Bill No. 250065 —titled, the “Protect Our Workers, Enforce Rights (POWER) Act”—which took effect immediately. The POWER Act amends Title 9 of the Philadelphia Code related to paid sick leave, wage theft, domestic worker protections, fair workweek law, victims of retaliation, and enforcement of worker protection ordinances.
Quick Hits
On May 27, 2025, Philadelphia Mayor Cherelle L. Parker signed the “Protect Our Workers, Enforce Rights (POWER) Act” into law, which strengthens worker protections and enforcement mechanisms in the city.
The POWER Act empowers the Philadelphia Department of Labor’s Office of Worker Protections to conduct independent investigations, maintain a “Bad Actors Database,” and revoke business licenses for noncompliant employers.
The POWER Act includes provisions for retaliation protections, immigrant worker support, increased sick pay for tipped employees, extended recordkeeping requirements, and allows workers to file civil actions for violations without exhausting administrative remedies.
Significant measures in the POWER Act include:
Strengthening Philadelphia’s Department of Labor. The act provides the Philadelphia Department of Labor’s Office of Worker Protections (OWP) with the ability for more thorough workplace investigations and to hold employers accountable under already existing local labor laws, including the wage theft ordinance, paid sick leave ordinance, and Domestic Worker Bill of Rights. This includes the authority to initiate investigations independently (without any formal complaints), broaden the scope of investigations unilaterally, and subpoena records and testimony.
The OWP will also maintain a publicly accessible “Bad Actors Database,” consisting of employers with three or more infractions from separate incidents or circumstances who have failed to comply with ordered remedies in a timely manner. Of note, the Act further empowers the OWP to revoke business licenses and city procurement contracts from employers listed on the “Bad Actors Database.”
Retaliation Protections. The act reaffirms that employers are strictly prohibited from retaliating against employees for exercising their rights under its provisions—such as filing complaints, taking sick leave, or participating in investigations. Critically, the act presumes unlawful retaliation whenever an employee faces an adverse employment action within ninety days of filing a complaint with the OWP, informs any person about an employer’s alleged violation of the act, cooperates with an investigation or prosecution of an alleged violation, or opposes any policy, practice, or act made unlawful by the act. The burden, therefore, lies with the employer to prove that retaliation did not occur. Employers must demonstrate nonretaliatory intent by clear and convincing evidence, a higher legal burden.
Immigrant Worker Protections. The act creates clear guidelines for the OWP to certify and submit statements of interest on behalf of immigrant workers who may be eligible for a U Visa or T Visa under the Victims of Trafficking and Violence Protection Act (2000), or for the Deferred Action Program under 6 U.S.C. § 202(5) and 8 U.S.C. § 1103.
Sick Pay for Tipped Employees. The act raises the hourly rate for paid sick leave for tipped workers under the Philadelphia paid sick leave ordinance. The hourly rate for paid sick time is calculated by taking the numerical average of the hourly wage for “Bartenders,” “Waiters & Waitresses,” and “Dining Room & Cafeteria Attendants & Bartenders Helpers,” as defined under the Standard Occupational Classification, published by the Pennsylvania Department of Labor.
Notice to Employees. The act requires employers to notify all employees of their rights. To provide slight relief for employers, however, the act removes the requirement that notices of rights be included in handbooks distributed to employees.
Recordkeeping. The act extends the duration that employers must keep required records from two years to three years. Employers must maintain records of (a) hours worked by an employee, including dates; and (b) hours of sick time taken by an employee and payments made to an employee for the sick time.
Private Right of Action. A worker who believes he or she has been harmed by a violation of the act may file a civil action in court without first exhausting administrative remedies. The person who allegedly violated the act, however, must be given written notice of the alleged violation and afforded fifteen days to cure the harm. The statute of limitations for bringing such an action is three years from the date the employee knew or should have known of the alleged violation, subject to the exceptions under Section 9-6602(6) and Section 9-6607(5).
Key Takeaways
The POWER Act introduces enhanced mechanisms to enforce compliance with Philadelphia’s existing employment and labor protection laws. Employers may want to:
monitor the Philadelphia Department of Labor webpage and familiarize themselves with the POWER Act’s requirements;
provide employees with a notice of their rights under the act, though this notice does not need to be included as a formal amendment to the employee handbook; and
review their recordkeeping protocols and practices and update their systems to ensure all required records are retained for at least three years.
In addition, employers may wish to educate supervisors and managers about the impact of disciplinary actions issued after complaints or protected activities.
New Jersey Legislature Introduces Bills Calling for Sweeping Bans on Non-Compete and No-Poach Agreements
On May 19, 2025, the New Jersey legislature followed in New York’s footsteps and introduced two bills, S.B. 4385 and S.B. 4386, seeking to significantly curtail, if not totally ban, the use of non-compete clauses in the employment relationship.
S.B. 4385
General Prohibitions
S.B. 4385 aims to ban “no-poach” agreements and non-compete clauses for most workers, even those agreements or clauses entered into before the bill is signed into law.
The proposed bill defines a “non-compete clause” broadly to mean any agreement arising out of an “existing or anticipated employment relationship” that prohibits, penalizes, prevents, or hinders a worker from seeking or accepting work with a different employer after the employment relationship ends, or from operating a business after the employment relationship ends. Severance agreements and workplace policies fall within this definition. The proposed bill also renders “no-poach” agreements, an agreement between two employers to not hire each other’s workers, void and unenforceable, as such agreement would hinder a worker’s ability to obtain employment.
Limited Exceptions
As currently drafted, S.B. 4385 provides for few exceptions to the encompassing ban. These exceptions include non-compete clauses entered into pursuant to the sale of a business, where the cause of action relating to the non-compete clause accrued prior to effective date of the ban, and existing non-compete clauses for senior executives entered into prior to the effective date of the ban so long as certain criteria is satisfied.
Non-Competes for Senior Executives
The proposed bill differentiates between workers who are not senior executives and those who are. A “senior executive” means a worker who holds a “policy-making” position and whose total compensation is $151,164 or more per year in the year immediately preceding their termination of employment. A “policy-making” position includes a business entity’s president, chief executive officer or the equivalent, or any other officer or individual similar to an officer who has “final authority to make policy decisions that control significant aspects of a business entity or common enterprise of which the entity participates.”
For workers who are not senior executives, the proposed bill prohibits non-compete clauses for such workers, and would extend to clauses entered into prior to the effective date of the ban. Under the proposed bill, employers are required to notify the worker within thirty (30) business days after the effective date of the ban that the non-compete clause will not be, and cannot legally be, enforced against the worker. The proposed bill provides “model” language for the required notice, which includes a disclaimer that: “You may seek or accept a job with any company or any person—even if they compete with (employer name).”
With respect to a worker who is a senior executive, non-compete clauses entered into prior to the effective date of the ban are enforceable only if certain criteria is satisfied, including:
Employers must provide the senior executive with written notice within 30 business days after the effective date of the ban describing the requirements of the ban and all revisions made to the provisions of an existing non-compete clause in order to comply with the requirements of the ban. Any revised non-compete clause must be executed again, after the senior executive is advised of their right to seek counsel.
Any non-compete clause must be no broader than necessary to protect the employer’s legitimate interests, such as the protection of trade secrets. A non-compete clause can be presumed necessary if the legitimate business interests cannot be adequately protected through an alternative agreement, such as a non-solicitation or confidentiality agreement.
A non-compete clause must comply with the guardrails imposed by New Jersey common law, including that it must be reasonable in time, geography, and scope, not unduly burdensome on the worker or injurious to the public, and consistent with public policy. The proposed bill provides its own interpretation of what these guardrails mean:
A maximum temporal limitation of twelve (12) months.
Geographic limitations tied to the geographic areas in which the senior executive provided services or had a material presence or influence during the two (2) years preceding the date of their termination and confined to New Jersey. This has significant impact on employers in the tri-state area, as a former worker based in New Jersey, for example, could simply join a competitor in New York under the language of the proposed bill.
Activities restrictions tied to the employer’s legitimate interests and limited to only the specific types of services provided by the senior executive during the last two (2) years of their employment.
A non-compete clause cannot penalize a senior executive for defending against or challenging the validity or enforceability of the non-compete clause, nor can it require the senior executive to waive their substantive, procedural, or remedial rights.
A non-compete clause cannot contain a choice of law provision applying another state’s laws if the senior executive is and has been for at least thirty (30) days immediately preceding their termination, a resident of or employed in New Jersey.
A non-compete clause cannot restrict a senior executive from providing services to the employer’s customers or clients so long as the senior executive does not initiate or solicit the customer or client.
A non-compete clause must specify that the employer will provide at least ten (10) days’ written notice of the employer’s decision to enforce the non-compete, unless the senior executive has been terminated for misconduct.
Unless the senior executive has been terminated for misconduct or breaches their contractual obligations, the employer must continue the senior executive’s salary or pay during the restricted period and make any benefit contributions needed to maintain the fringe benefits to which the senior executive would be entitled during the restricted period.
Rights, Remedies, & Notice Requirements
The proposed ban affords aggrieved workers a private right of action, with a two (2) year statute of limitations accruing from the later of: (1) when a prohibited non-compete clause or no-poach agreement was signed; (2) when the worker learns of the prohibited non-compete clause or no-poach agreement; (3) when the employment relationship is terminated; or (4) when the employer takes any step to enforce the prohibited non-compete clause or no-poach agreement. A court has jurisdiction to void any prohibited clause or agreement and to order all appropriate relief, including enjoining the conduct of the employer, ordering the payment of liquidated damages of not more than $10,000, and awarding lost compensation, damages, and reasonable attorneys’ fees and costs.
If signed into law, employers are required to post a copy of the ban, or a notice approved by the New Jersey Department of Labor in a prominent place in the work area. Failure to comply with the notice obligations can result in civil penalties.
S.B. 4386
General Prohibitions
S.B. 4386 largely parallels S.B. 4385 and bans no-poach and non-compete agreements in the employment relationship with a particular focus on clauses that “indebt” employees to their former employers. S.B. 4386 applies retroactively and broadly prohibits clauses or agreements that restrain an employee from engaging in a lawful profession, trade, or business after the conclusion of the employee’s employment, including, but not limited to:
A non-compete clause, which is defined broadly to include any employment contract or agreement, or term or provision thereof, “that prohibits an employee from, penalizes the employee for, or functions to prevent the employee from, seeking or accepting employment with any person, or operating a business, after the conclusion of the employee’s employment with the employer.”
A term that requires a debtor to pay for a debt if the debtor’s employment or work relationship with the employer is terminated. A “debtor” means “an individual who is or may become liable to pay an employer, a prospective employer, a third-party entity, or other business entity for all or part of an employment-related cost, education-related cost, or other debt.” A “debt” means “money, property, or their equivalent that is due or owing or alleged to be due or owing from an individual to any employer or other person, including, but not limited to, for employment-related costs, education-related costs, or a consumer financial product or service.”
Any term that imposes any penalty, fee, or cost on an employee for terminating the employment relationship, including, but not limited to, an employment promissory note, a replacement hire fee, a retraining fee, reimbursement for immigration or visa related costs, bondage fees, liquidated damages, lost goodwill, or lost profit.
Rights, Remedies, & Notice Requirements
S.B. 4386 requires that employers notify employees of the proposed ban within thirty (30) days of its effective date. Like S.B. 4385, S.B. 4386 affords aggrieved employees a private right of action and outlines a substantively identical two (2) year statute of limitations provision. A court has jurisdiction to award injunctive relief, order the payment of liquidated damages, and award lost compensation, actual damages, punitive damages of not more than $5,000 per employee, and reasonable attorneys’ fees and costs. An aggrieved employee can also file a complaint with the New Jersey Department of Labor, which is authorized to enforce the bill.
Key Takeaways
These proposed bills are in the early stages of the legislative process. Notwithstanding this, it is clear that legislators in New Jersey, like in other states, are seeking to fill a void left by the federal government and to curtail the use of non-compete and no-poach agreements in the employment context. Employers should stay informed about the status of these bills and review the restrictive covenant agreements they have in place to assess how these bills might impact those agreements. We will monitor developments in this area and provide updates as they become available.
Another Published California Appellate Decision Finds Waiver of Right to Arbitrate Due to Untimely Payment of Fees, Ahead of California Supreme Court Ruling on Same Issue
A recent decision from the Second District California Court of Appeal highlights the importance of employers making timely payments of arbitration fees and offers a glimpse of one of the several potential outcomes of a case pending before the California Supreme Court involving the same issue.
In this decision, Sanders v. Superior Court (2025) 110 Cal.App.5th 1304, former employee Mone Yvette Sanders had filed a lawsuit against her former employer Edward Jones. Sanders’ complaint alleged class action claims and claims under California’s Private Attorneys General Act based on purported violations of the California Labor Code. At the trial court level, Edward Jones had successfully enforced an arbitration agreement signed by Sanders during her employment, thereby dismissing Sanders’ class action claims, moving Sanders’ individual claims into arbitration, and staying Sanders’ representative PAGA claims pending arbitration.
During the course of the arbitration of Sanders’ individual claims, the arbitration service provider (JAMS) issued an invoice for $54,000, indicating, “Payment is due upon receipt,” and noting “Please see California Code of Civil Procedure sections 1281.97 – 1281.99 regarding the payment of fees for this arbitration.”
California Code of Civil Procedure section 1281.98, which the JAMS invoice referenced, requires that in an employment arbitration, the party who drafted the arbitration agreement (typically the employer) must pay fees required to continue the arbitration within 30 days of their due date. Failure to pay invoices within 30 days of their due date waives an employer’s right to require an employee proceed with arbitration.
Thirty-five days after issuance of the invoice, JAMS emailed the parties that the $54,000 invoice remained unpaid. In response, Sanders’ counsel asserted that Edward Jones had violated section 1281.98 by failing to pay arbitration fees within 30 days of their due date. That same day, Edward Jones made payment of the invoice in full.
Sanders then filed a motion in the trial court to return proceedings to the trial court, pursuant to section 1281.98. The trial court denied Sanders’ motion, finding that the Federal Arbitration Act (FAA) preempted section 1281.98, because the provision discriminated against arbitration and imposed procedural requirements that interfered with its fundamental attributes. Sanders appealed.
The Court of Appeal disagreed with the trial court, reasoning that section 1281.98’s imposition of a 30-day time limit to pay arbitration fees does not hinder arbitration, but rather, promotes it as an expedited and cost-efficient way to resolve disputes. As such, the Court of Appeal concluded that section 1281.98 is not preempted by the FAA and Edward Jones had waived its right to require Sanders to pursue her individual claims in arbitration.
The California Supreme Court is presently weighing the same question, that is, whether section 1281.98 is preempted by the FAA, in another matter: Hohenshelt v. Superior Court (S284498). The facts in Hohenshelt are similar to those in Sanders. In Hohenshelt, a former employee sued his former employer for claims under the California Fair Employment and Housing Act and the California Labor Code. The employer successfully compelled arbitration, and arbitration commenced through JAMS. During the course of arbitration, the employer paid an arbitration invoice past section 1281.98’s 30-day deadline, and the employee moved to return the matter to court pursuant to section 1281.98. While the trial court denied the employee’s request to return the matter to court, the employee appealed the trial court’s ruling. On appeal, the employer argued that section 1281.98 is preempted by the FAA but, like the court in Sanders, the appellate court determined that section 1281.98 was not preempted because section 1281.98 furthers the goals of arbitration rather than frustrating them.
The Hohenshelt decision is currently under review by the California Supreme Court. The Court heard arguments in the Hohenshelt case on May 21 and 22, 2025, and a decision is expected in the coming weeks.
The Sanders and Hohenshelt case decisions underscore that it remains crucial for California employers to make timely payments of arbitration invoices in order to enjoy the benefits of arbitration agreements.
Deployment of AI in the Workplace in France–The Importance of Consulting With the Work Forces
In a significant ruling on 14 February 2025, the First Instance Court of Nanterre, France ordered a company to suspend the deployment of several artificial intelligence tools until proper consultation with its Works Council has been completed.
The company started implementing new AI applications while the mandatory Works Council consultation process was still ongoing. Despite the claim that these tools were merely in a “pilot phase,” the court found that their deployment to employees constituted actual implementation rather than simple experimentation.
The court’s decision emphasizes the importance of respecting employee representation rights in the digital transformation of workplaces, especially in France. This injunctive relief ruled that the premature implementation of the AI tools constituted a “manifestly unlawful disturbance” of the Works Council prerogatives.
This case sets an important precedent for companies implementing AI technologies in France, highlighting the necessity of proper employee consultation procedures before deploying new technological tools in the workplace, in addition to the recently adopted EU AI Act.
The EU AI Act classifies AI systems into four categories: prohibited AI systems, high-risk AI systems (HRAIS), general purpose AI Models (GPAIM), and low-risk AI systems.
Obligations being based on the AI systems risk-level, the most stringent rules apply to HRAIS providers which must particularly:
Implement comprehensive risk management systems;
Ensure data governance;
Maintain technical documentation;
Guarantee transparency;
Enable human oversight;
Meet standards for accuracy, robustness, and cybersecurity;
Conduct conformity assessments; and
Cooperate with regulators.
General Purpose AI Models (GPAIM), must fulfill obligations such as issue technical documentation, comply with EU copyright rules, and provide summaries of their training data. GPAIMs posing systemic risks must also undergo model evaluations, risk mitigation, and incident reporting.
Josefine Beil also contributed to this article.