Sexual Harassment Waiver Ban, Noncompetes Top New October 1 Compliance Requirements
Author: David B. Weisenfeld, XpertHR Legal Editor
September 27, 2018
A Maryland ban on sexual harassment waivers in employment contracts and a broad Massachusetts law governing noncompetition agreements headline a host of new state and local October 1 compliance requirements. But that's not all, as San Francisco's expanded "ban the box" criminal history law also takes effect.
Maryland Joins Sexual Harassment Waiver Ban Trend
Effective October 1, 2018, the Maryland Disclosing Sexual Harassment in the Workplace Act prohibits and invalidates any clause in an employment contract or policy that requires employees to waive any rights to bring a future sexual harassment claim.
Amidst the rise of the #MeToo movement, several states and cities are initiating or considering similar legislation. For instance, New York passed a comprehensive anti-sexual harassment law prohibiting nondisclosure clauses in settlements or agreements relating to sexual harassment claims unless the complaining employee specifically requests confidentiality.
The Maryland law bans employers from taking any adverse action - such as terminating, denying a promotion or refusing to hire - against individuals who refuse to sign a sexual harassment claim waiver. It also requires any employer with 50 or more employees to submit a short survey to the Maryland Commission on Civil Rights including:
- The number of settlements made by or on behalf of the employer after an employee's sexual harassment claim;
- The number of times the employer has paid a settlement to resolve a sexual harassment claim against the same employee over the past 10 years of employment; and
- The number of settlements made after a sexual harassment allegation that included a provision requiring both sides to keep the settlements terms confidential.
Massachusetts Limits Breadth of Noncompete Agreements
Also effective October 1, Massachusetts will have a broad law aimed at noncompetition agreements establishing minimum requirements governing their enforceability. The new law applies only to agreements entered into on or after October 1, but extends beyond employees to include independent contractors.
The law makes clear that a noncompete agreement may not be "broader than necessary" to protect an employer's legitimate business interests and restricts their geographic scope.
It also limits the enforceability of a noncompete to one year after employment ends, unless the employee breached a fiduciary duty to the employer or unlawfully took the employer's property. If either of those situations occurs, then an agreement may be enforced for up to two years.
In addition, Massachusetts employers must be aware that all agreements must be in writing, signed by both parties, and expressly state an employee's right to seek legal counsel before signing the agreement.
The law also makes noncompetes unenforceable against the following classes of employees:
- Employees classified as nonexempt under the Fair Labor Standards Act (or comparable Massachusetts law);
- Undergraduate or graduate students engaged in short-term employment or internships;
- Employees terminated without cause or laid off; or
- Employees 18 years of age or younger.
However, the Massachusetts noncompete measure excludes certain agreements including non-disclosure agreements, non-solicitation agreements, noncompetes made in connection with the sale of a business and noncompetes entered into in connection an employee's separation (provided the employee is given seven business days to rescind acceptance).
San Francisco Ban the Box Expansion
San Francisco is one of many cities and states with a "ban the box" law restricting employers from asking about a job applicant's or employee's criminal history. But effective October 1, amendments to San Francisco's Fair Chance Ordinance will expand the law's coverage in the following ways:
- Applying to San Francisco employers with five or more employees (down from 20 or more);
- Banning employers from posing criminal background questions or requiring disclosure of an applicant's conviction history until a conditional job offer has been made (instead of after the first "live" interview takes place);
- Granting job applicants and employees the right to sue the employer; and
- Increasing the potential penalties to up to $500 for a first violation, up to $1,000 for a second violation and $2,000 for subsequent violations.
The Fair Chance Ordinance also requires covered employers to state in all job advertisements that qualified applicants with arrest and conviction records will be considered for employment in accordance with the law.
In all, 11 states and at least 18 cities have "ban the box" laws affecting private employers to varying degrees.
Berkeley Minimum Wage Hike
The expanded San Francisco "ban the box" law is not the only notable employment law change in the Bay Area. That's because Berkeley, California, will increase its minimum wage effective October 1 from $13.75 to $15.00 per hour. Minimum wage increases remain a recurring issue in many parts of the country that employers must constantly monitor.