In Swales, the Fifth Circuit Court of Appeals set out to clarify the “legal standard that district courts should use when deciding whether to send notice in an FLSA collective action.” Expressly rejecting the two-stage process described above, the Fifth Circuit clarified that: “Two-stage certification of § 216(b) collective actions may be common practice. But practice is not necessarily precedent. And nothing in the FLSA, nor in Supreme Court precedent interpreting it, requires or recommends (or even authorizes) any “certification” process.”
States around the country vary in how they approach the enforcement of unreasonable non-compete agreements. While the majority of states allow their courts to “blue pencil” or rewrite restrictive covenants to make them reasonable, three states do not permit such reformation, and four states have no clear legal guidance on whether blue-pencilling is permitted, leaving employers in limbo.
Wage-fixing, i.e., agreeing with competitors that everyone will pay the same wage or will not pay more than a pre-agreed amount, is illegal. Just as companies can’t get together and fix prices for goods, they are also prohibited from fixing prices for services. A recent indictment of a Texas ex-owner of a staffing agency alleging that he engaged in price fixing shows that DOJ and FBI take wage-fixing arrangement seriously. The indicted ex-owner now faces up to 15 years in prison and over a million dollars in fines.
In Texas, client non-solicitation agreements are subject to the same rules as the non-compete agreements. Therefore, they must be “reasonable” and “not impose a greater restraint than is necessary to protect the goodwill or other business interest” of the employer.
While the enforcement of non-compete agreements around the country remains strong, the courts are looking closer at whether an employee will suffer “undue hardship” if his or her non-compete is enforced. Thus, employers should avoid taking unreasonable positions in court and be prepared to explain why enforcing a particular non-competition agreement will not prevent an employee from earning a living.
The Fifth Circuit Court of Appeals recently clarified that non-employees do not have standing to sue under Title VII, even if they are an object of intentional retaliation.