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Federal Trade Commission Proposes Rule to Ban Non-Compete Agreements

Federal Trade Commission Proposes Rule to Ban Non-Compete Agreements

On January 5, 2023, the Federal Trade Commission (FTC) proposed a new rule that would ban employers from requiring their employees to sign non-compete agreements.  The FTC is currently accepting comments from the public.  https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete_nprm_fact_sheet.pdf

What is a Non-Compete Agreement?

A non-compete agreement is a legally binding contract that employers often use to protect their business interests. In this type of agreement, an employee agrees not to work for a competing company or start their own competing business for a certain period of time after leaving the employer’s company. The main purpose of a non-compete agreement is to protect the employer’s trade secrets, and confidential information, as well as its relationships with customers and clients. However, it’s important to note that the enforceability of non-compete agreements can vary depending on the specific language of the agreement and the laws of the state in which it is signed.

The FTC estimates that about 1 in 5 working Americans (30 million people) are bound by a non-compete agreement.   These agreements can affect all ranges of the work force, from fast food employees to highly compensated executives.  In proposing its rule to ban these onerous agreements, the FTC states:

‘By preventing workers across the labor force from pursuing better opportunities that offer higher pay or better working conditions, and by preventing employers from hiring qualified workers bound by these contracts, noncompetes hurt workers and harm competition.”

When workers are prevented from freely moving to a better opportunity, it stifles not only wages, but new businesses and new ideas.  When workers are confronted with the opportunity to take a new job, they often feel stuck because they are bound by a noncompete agreement.  The FTC estimates that the proposed rule would increase wages across all industries and job levels by $250 to $296 billion dollars per year.

Non-Compete Agreements in Indiana

Indiana has a long history of not favoring noncompete agreements; however, they are enforceable in Indiana.  Clients often contact us wanting to know if they can get out of their noncompete agreement.  Sadly, the answer they often receive is that while their agreement may not be enforceable, the only way to determine that is to litigate the issue, which can be very expensive.  Furthermore, most employers put provisions in their noncompete agreements that employees can be responsible for the employer’s attorneys’ fees if they challenge the agreement and lose.

The new rule currently proposed by the FTC would ban employers from enforcing existing noncompete agreements, as well as prevent them from using them in the future.  Employers would also have to notify their workers that the agreements are rescinded and no longer enforceable.

Conclusion

In summary, the FTC estimates the new rule would:   1.  Increase workers’ earnings by nearly $300 billion per year.  2. Save consumers up to $148 billion annually on health care costs.  And, 3. Double the number of companies founded by a former worker in the same industry.  If you are interested in commenting on the proposed rule, you can submit your comment here:  

If you are currently working under a noncompete agreement, or have questions about entering in to one, you should contact an experienced employment law attorney so that you know your rights and obligations.  Please feel free to call me for a free consultation.

What Constitutes a Hostile Work Environment in Indiana?

What Constitutes a Hostile Work Environment in Indiana?

Hostile work environment claims often involve sexual harassment, but not always.  A workplace may also be hostile based on race, sexual orientation, national origin, gender, age or some other form of discrimination. 

How Do You Prove a Work Environment is Hostile?

In order to prove a hostile work environment, an employee must be able to demonstrate that the discrimination is, “severe and pervasive.” 

This has been the standard for in the United States since 1972, when the Supreme Court decided Rogers v EEOC.  “Mere utterance of an ethnic or racial epithet which engenders offensive feelings in an employee would not affect the conditions of employment to a sufficiently significant degree to violate Title VII.” 

Rogers remains the law of the land in the US. However, every case must be examined on its own merits. 

If the conduct is so outrageous, it is possible that just one instance of discrimination could be sufficient to bring a claim and be compensated. 

What Should You Do If You Think You’re a Victim of a Hostile Work Environment?

If you suspect a hostile work environment, it is important to seek out an attorney who practices in the area of employment law to get a consultation and be certain of your rights and responsibilities. 

It also makes a difference where the hostility is coming from.  Is it a co-worker or is it a manager who is discriminating?  If discrimination comes from a co-worker, it must be reported, so the company can take appropriate action against that employee. 

Suppose it is a manager that is creating a hostile work environment. In that case, he is acting on behalf of the employer, and it is more difficult for the company to deny that they knew about the behavior.

How do you know if the behavior is creating a hostile environment?

To determine whether the behavior is creating a hostile work environment the question to ask is, “whether the condition of employment is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive.”

If you are still unsure, it’s best to contact a law firm in the state of Indiana about the workplace harassment you’ve experienced. They will be able to help you determine if it constitutes a ‘hostile work environment’.

Goodin Abernathy’s lawyers are well experienced in handling employment discrimination cases. Contact the office today for a free consultation.

Monon Trail Safety

Monon Trail Safety

A recent IndyStar article about a group of concerned citizens taking on a traffic study where the Monon Trail intersects 86th St., got me thinking about the disparities that riders experience when crossing the county line.   https://www.indystar.com/story/news/local/transportation/2022/07/15/cyclist-death-indinapolis-monon-intersection-traffic-study-crashes-indiana/10017676002/

Riders in Hamilton County are offered beautifully designed tunnels and bridges where the Monon Trail intersects with busy roads.  From the north beginning at SR 32, there is a well-designed bridge that allows riders safe passage over the busy state road.  As riders head south, there is another bridge over 146th St., and then they are tunneled under US 31, 126th and 116th Streets. Southbound trail riders are again tunneled under I-465 as they enter Marion County and the City of Indianapolis.

The next 4-lane road that the trail user will encounter is the infamous crossing at 86th St. in Nora.  At this location, 86th St. is a heavily travelled, divided 4-lane street, with numerous businesses on either side. Anyone who has experienced this crossing on a bicycle, or on foot, knows of the dangers.  There are fast moving cars on 86th St., who are not expecting a large pedestrian crossing, and there are cars turning in and out of shopping centers on both sides of 86th St.  Those drivers are often looking the other direction for cars, never looking to see if there might be a pedestrian trying to cross the street.  I, myself, have seen numerous close calls at this crossing.

A similarly dangerous intersection that was recently enhanced with a beautiful pedestrian bridge was where the Monon Trail crosses 38th St.  I am very familiar with this project, as it was just a mile or so from Goodin Abernathy LLP.  The bridge allows trail users to safely pass over 38th St. without the risk of getting hit by a car.  With the price of gas at all-time highs, and more people using the trails to commute to work, it is time to invest some of the Federal Government’s infrastructure money in to alternate forms of transportation.  If the City of Indianapolis is going to encourage people to use the Monon, they need to make it safe for its users.  Indianapolis is a world class city, and the Monon is a Hall of Fame trail.  In honor of Indy cycling advocate, Frank Radaker, let’s make it safe.

As an avid cyclist and frequent bike commuter from his home in Carmel to our office at 301 E. 38th Street, Chip Clark has experience representing cyclists who have been injured by the negligence of others.  If you or someone you know has been injured while cycling, call Chip for a free, no obligation, consultation.

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445)

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (H.R. 4445)

Despite bitter partisan divide in Washington, both the House and Senate recently passed H.R. 4445 which will effectively end the forced arbitration of sexual assault and sexual harassment cases. (Read here.)

What does this mean? Many employees may not even be aware that they signed an arbitration agreement when they accepted the offer from their employer. Often these clauses are buried in employment agreements, and employees have no knowledge or understanding of what they even mean. However, employers favor forced arbitration because it keeps them out of court. The effect of forced arbitration clauses is that they close the courthouse doors for many victims of sexual assault or harassment.

When a new client comes to me with a claim of sexual assault or harassment, one of the first things we want to know is whether they signed an arbitration agreement. If a victim is bound by an arbitration agreement, then we can’t file a public lawsuit. Arbitration agreements empower employers to make low ball offers to settle and insist on confidentiality. These agreements effectively take away a victim’s right to go public with the allegations and exposing the perpetrators.

Many defense lawyers are surmising that this will result in a huge increase in the number of lawsuits being filed by victims, and larger settlements because corporations are no longer going to be able to force victims into a confidential arbitration proceeding. The guaranty of confidentiality means less exposure and publicity for perpetrators and the corporations for which they work.

While it remains to be seen whether this will cause an increase in lawsuits, this can certainly be viewed as a win for victims of sexual assault and harassment. The law basically amends the Federal Arbitration Act to make it easier for victims to file suit in State or Federal Court despite having previously agreed to arbitrate those claims. Victims will now have the right to choose to file their claims in court, rather than being forced by their employers to arbitration, thus allowing their claims will be heard by a judge, not an arbitrator.

The effects of the new law go beyond just giving victims their “day in court.” This will now force employers to effectively address sexual assault and harassment in the workplace. Gone are the days of paying off victims and buying their silence with a confidentiality agreement. By shining the light of a public proceeding on a perpetrator, it may prevent them from finding any future victims.

If you are a victim of sexual assault or harassment in the workplace, you need to know your rights. Call one of our experienced employment law attorneys for a free consultation

Related Articles:

– If you think you are working in a hostile work environment, but don’t know for sure, check out this article on what constitues a hostile work environment.

Employment Law Resources

Employment Law Resources

I often receive calls from potential clients who are confident that they have been victims of discrimination or harassment, or that they have been wrongfully terminated, yet they may not be aware of the legal meanings of those terms. The law protects employees from discrimination and harassment based on Race, Color, Sex, National Origin, Age (over 40), Disability, Pregnancy, and Genetic Information. To be clear, Indiana is an “at will” employment state. That simply means that most of us work at the will of our employers. Stated another way, we can be fired for any reason (or no reason at all) just not a discriminatory reason. For example, there is nothing illegal about an employer firing an employee based on the quality of his or her work. But, it would be illegal to fire an employee based on their race or age, or gender. Rare is the case where an employer will actually say, “I am firing you because you are too old.” Therefore, we might have to infer the reason, based on other factors. Does your boss suggest that you are too old for the job? Do they ask you questions like, “When are you going to retire?” These types of things might suggest that age was a factor in your termination, even though the employer’s stated reason for firing you was because of “poor work performance.”

There are some really good resources available, through the Equal Employment Opportunity Commission (“EEOC”), that explain what is meant by wrongful termination, and how those laws apply to employees. The EEOC is the federal agency that is charged with enforcing anti-discrimination laws in the United States. In fact, most discrimination claims must first be filed with the EEOC before you can file a lawsuit against the employer. This process is known as “exhausting your administrative remedies.” Below are some links to some very useful information as it pertains to different types of Discrimination and Harassment:

Age Discrimination: https://www.eeoc.gov/age-discrimination
Disability Discrimination: https://www.eeoc.gov/disability-discrimination
Race/Color Discrimination: https://www.eeoc.gov/racecolor-discrimination
Sex Discrimination: https://www.eeoc.gov/sex-based-discrimination
Pregnancy Discrimination: https://www.eeoc.gov/pregnancy-discrimination

Harassment is unwelcome conduct that is based on race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive. For more information on what constitutes harassment, you can go to the EEOC’s site by clicking the link below:

Harassmenthttps://www.eeoc.gov/harassment

Another type of prohibited activity is Retaliation. To be illegal, the retaliation in the employment context must be related to a “protected activity.” For example, if you complained to your Human Resources department that you were being discriminated against based on sex, and then you were immediately fired for engaging in that protected activity, that would be considered retaliation. Below is some useful information to help you understand what types of retaliation are prohibited by employers: https://www.eeoc.gov/retaliation

Lastly, we often get calls about how to collect unpaid wages. If the amount is less than $6,000, the best way to collect those wages is by filing an Online Wage Claim with the Indiana Department of Labor (“IDOL”). Below is a link to the IDOL’s Online Wage Claim Form along with instructions for how to proceed. It the amount is greater than $6,000, we suggest that call us for a free consultation with one of our attorneys that is familiar with Indiana’s Wage Claim and Wage Payment Statutes.

Indiana Department of Labor Online Wage Claim Form: https://www.in.gov/dol/2734.htm

As always, contact me – Chip Clark – if you need representation or advice on any of these subjects.