Supreme Court's Chevron Decision: Impact on Labor and Employment Law

The Supreme Court's decision in the Chevron case has significant implications for labor and employment law. By removing the deference that courts must give to administrative agencies' interpretations of ambiguous statutes, the ruling could curtail the power of agencies like the Department of Labor and the National Labor Relations Board. This change may lead to stricter judicial scrutiny of agency decisions affecting workplace regulations, wage and hour laws, and collective bargaining rights. As a result, businesses and employees might face increased uncertainty and litigation as courts play a more active role in interpreting labor laws.

Threshold for Millions of Workers Increases on July 1, and again on January 1, 2025

The initial phase of the new federal overtime regulation will extend overtime pay eligibility to millions of workers. Beginning on July 1, the DOL's salary threshold for "white-collar" exemptions from federal overtime requirements will increase to $43,888, with a further rise to nearly $59,000 anticipated at the beginning of 2025.

What Louisiana Businesses Should Do in Preparation for the FTC’s Nationwide Ban On Non-Compete Agreements

By: Jude C. Bursavich

The Federal Trade Commission (“FTC”) issued its final rule on April 23, 2024, banning all future non-compete agreements between employers and workers. The rule also bans all existing non-compete agreements between employers and workers, except those existing agreements with senior executives, earning greater than $151,164 annually, in policy-making positions. These senior executives with existing agreements are excluded from the ban. Future agreements with such senior executives, however, are included in the ban.

“Worker” is broadly defined as an employee, independent contractor, extern, intern, volunteer, apprentice, or a sole proprietor, whether paid or unpaid, who provides a service to a person.

For existing non-compete agreements that are subject to the ban, the rule requires notice be given to each worker no later than September 4, 2024, the effective date of the final rule. The notice requires the person who entered into the non-compete agreement with the worker to provide clear and conspicuous notice that the worker’s non-compete clause will not be and cannot legally be enforced. The FTC rule requires that the notice be provided by hand delivery to the worker, or by mail at the worker’s last known personal street address, or by email to an email address belonging to the worker, or by text message to a mobile telephone number belonging to the worker. Employers must be diligent in meeting the notice requirements in the form required to workers with existing non-compete agreements prior to September 4, 2024.

While the ban is being challenged in court and may never take effect, what should a Louisiana business do if the rule becomes effective on September 4, 2024? La. R.S. 23:921, the single statute in Louisiana controlling the validity of non-compete agreements, allows an employer to enter into both, or either, a non-compete agreement or non-solicitation of customers agreement. While the FTC’s nationwide ban on non-compete agreements prohibits future non-compete agreements in Louisiana, it does not appear to prohibit non-solicitation agreements between employers and employees. While a non-compete agreement prohibits an ex-employee from competing in the industry, a non-solicitation agreement allows an ex-employee to compete, but not to solicit their former employer’s customers in doing so. Louisiana businesses need to seriously consider protecting their business by using non-solicitation of customers agreements with their employees to avoid the FTC’s nationwide ban.

Louisiana Senate Bill No. 165 Limits the Use of Non-Compete Agreements with Physicians

By: Jude C. Bursavich

Louisiana Senate Bill 165, recently signed by our Governor, limits the use of non-compete agreements with most physicians. The new law is effective January 1, 2025. For “primary care physicians”, any provision restraining them from practicing medicine shall not exceed three years from the effective date of the initial agreement. This is being commonly referred to as a “burn down” provision. If the primary care physician remains with that employer for three years, the non-compete provision is no longer enforceable. Any subsequent agreement between that employer and the primary care physician after the initial three-year term cannot include non-compete provisions.

If the agreement is terminated by the primary care physician, however, prior to the initial three-year term, the non-compete provision can be enforced against that physician for the standard two-year period from the date of termination of employment. It can only be enforced, however, in no more than three parishes, including the parish in which the primary care physician’s principal practice is located, and no more than two additional contiguous parishes in which the employer carries on a like business.

Caution: It appears from the language in the Bill that current agreements may need to be re-written to recognize the three or five-year “burn down” of the non-compete provision in physician contracts as well as the three-parish limitation.

“Primary care physician” is defined as “a physician who predominantly practices general family medicine, general internal medicine, general pediatrics, general obstetrics, or general gynecology.

For those not meeting the definition of a “primary care physician”, Senate Bill 165 also limits the use of non-compete agreements for these physicians. The limitations are exactly the same as those of a “primary care physician”, except the burn down period is five years. Neither of these provisions containing either a three or five-year burn down period apply to certain other physicians specifically listed in Senate Bill 165. Those include physicians employed or under contract with a rural hospital, or any physician employed or under contract with a federally qualified health care center. These physicians are subject to the standard rules for non-compete agreements.

While Senate Bill 165 applies to all contracts entered into after January 1, 2025, it additionally affects current contracts. The three and five-year burn down periods for current contracts with physicians, as well as the three-parish geographical limitation, begins to run as of January 1, 2025, the effective date of the Act.