Noncompete Ban Could Make ‘No-Poach’ Agreements Harder to Enforce: Polsinelli

McKnights Home Care | By Adam Healy

The Federal Trade Commission’s ban on noncompete agreements threatens to undermine common tactics used by home care agencies to prevent client poaching, experts at law firm Polsinelli warned during a recent webinar.

The rule does not explicitly forbid documents such as nondisclosure agreements (NDAs) and no-poach agreements, which are often used by home care and hospice providers. However, FTC included a “functional equivalence” test to measure whether such provisions would in practice act as a noncompete, Polsinelli’s attorneys noted. As a result, these kinds of contractual provisions could be undone if they are applied too broadly.

“If you have an NDA that’s so broad that it would be seen as the functional equivalent of a non compete, you may have trouble,” Polsinelli attorney Scott Gilbert said during the webinar Tuesday. “If you have a super-broad NDA, it may not be enforceable.”

Furthermore, the FTC could throw out any contract provision that applies to workers after their employment has ended, explained Polsinelli shareholder Emma Scheuring. This includes no-poach clauses that prohibit caregivers from being hired directly by their patients after their employment by a home care agency ends.

“If you’re asking your caregivers not to go work for their clients — your clients — after they stop working for you, that’s a noncompete under the rule,” Scheuring said. “Anything that says, ‘Employee, once you leave working for me, you can’t go work for XYZ,’ that’s going to be problematic under the rule.” 

Other types of contractual obligations, including direct-hire clauses, were not addressed directly in the FTC’s rulemaking. But experts have previously stated that the use of these kinds of provisions may also be limited once the rule goes into effect.

Broad application

Against many providers’ wishes, FTC did not grant a blanket exemption for healthcare businesses. This means that for-profit home care, home health and hospice providers are subject to FTC’s ban, Polsinelli’s experts said.

And while the FTC generally does not have jurisdiction over nonprofit entities, the agency indicated in the rule’s comment section that it intends to look more closely at whether some businesses actually qualify as nonprofits. If “presented with an appropriate test case,” the agency may try to assert its jurisdiction on a nonprofit engaged in “relatively commercial activities,” according to law firm JD Supra.

Meanwhile, the Internal Revenue Service also recently suggested that it would be investigating whether some entities fit their nonprofit status, according to Gilbert.

“It wouldn’t surprise us at all to see collaboration between the FTC and the IRS in evaluating [whether a business is truly not-for-profit],” Gilbert said…

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Breaking: DOL Final Overtime Rule Increases Minimum Salary Threshold for Exemption

The National Law Review | Ny Kelly K. Ballentine of ArentFox Schiff LLP

Effective July 1, employers must pay employees a salary of at least $844 per week (equivalent to $43,888 per year) to qualify for the Executive, Administrative, Professional, Outside Sales, and Computer Employees exemptions from minimum wage and overtime under the Fair Labor Standards Act (FLSA).

As we have previously reported, this change comes as part of the US Department of Labor’s (DOL) highly anticipated final rule on standard salary levels, which it announced on April 23. The final rule also increases the Highly Compensated Employee exemption total annual compensation threshold to a minimum of $132,964 per year, including at least $844 per week paid on a salary or fee basis, and further includes a mechanism providing for future updates to these earnings thresholds to reflect current earnings data.

Looking to next year, employers should be prepared for another increase on January 1, 2025, which raises the standard salary level to $1,128 per week (equivalent to $58,656 per year) and the Highly Compensated Employee total annual compensation threshold to $151,164 per year, including at least $1,128 per week paid on salary or fee basis. Beginning on July 1, 2027, and every three years thereafter, the final rule empowers the DOL to make future updates to the pay thresholds to reflect current earnings data.

For context, the current rule (effective before July 1) requires a salary minimum of $684 per week (equivalent to $35,568 per year) for the Executive, Administrative, Professional, Outside Sales, and Computer Employees exemptions, and $107,432 per year for the Highly Compensated Employee exemption. Employers are reminded that an employee must meet the minimum salary threshold under both the FLSA and any state statutory scheme to qualify for exemption.

Companies should evaluate their current compensation practices and employee classifications to avoid violations of the FLSA’s minimum wage and overtime regulations and associated penalties,

Home Health: A Solution to Skyrocketing Healthcare Costs

MedCity News | By Andrew Molosky
 
A great deal of healthcare can take place in the home, leaving valuable bandwidth available for specialized facilities when they are needed.
 
A great deal of healthcare can take place in the home, leaving valuable bandwidth available for specialized facilities when they are needed.
 
As the 2024 presidential election draws nearer, nearly 75% of Americans report healthcare costs as a primary financial worry according to a new study from KFF. Americans have every reason to feel this way: over the last five decades per capita healthcare spending has increased from $353 in 1970 ($2,072 adjusted for inflation) to $13,493 today. But care quality has not increased by the same rate – rather, patients are simply paying more today for the same “one-size-fits-all” treatments. 
 
Rising costs and poor quality, however, are not the result of this administration or that one. They are a function of deeper problems endemic to the American healthcare industry itself. 
 
Added attention to the cost of care gives healthcare stakeholders the opportunity to step back and evaluate American healthcare as a whole. It is incumbent on us to think through system level changes and reshape the future of care delivery in this country.
 
Munck Wilson Mandala Partner Greg Howison shared his perspective on some of the legal ramifications around AI, IP, connected devices and the data they generate, in response to emailed questions.
 
Fortunately, home-based healthcare paradigms like hospice, that have long been recognized as the least institutionalized and profit-driven segments of the healthcare industry, offer a model for a return to healthcare sanity. 
 
American healthcare is beset by skyrocketing costs that force many patients to choose between their health and their financial stability. The statistics are staggering: Healthcare is the primary reason that Americans file for bankruptcy. Over half of Americans––57%––report having had some medical debt over the last five years.
 
What’s more, the United States spends much more on healthcare per person than peer nations; some studies suggest we spend twice as much. As the most prosperous, innovative country on Earth, our healthcare system should be the best. Instead, it’s one of the worst amongst wealthy countries…

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EEOC Releases Final Guidance on Workplace Harassment

SESCO Management

The U.S. Equal Employment Opportunity Commission (“EEOC”) has released its Enforcement Guidance on Harassment in the Workplace (the “Final Guidance”).

Guidance Clarifies the Scope of Sex Discrimination and Harassment.

The Final Guidance:

• Clarifies that Title VII’s protections extend to LGBTQ employees. Specifically, it clarifies that workplace harassment includes “misgendering” employees or denying access to bathroom facilities that align with their gender identity.
• Reminds employers that discrimination and harassment based on “sex” includes harassment based on pregnancy, childbirth, and “related medical conditions,” which include employees’ decisions related to contraception and abortion.

Guidance Addresses Harassment in a Remote Work Environment.

The Final Guidance:

• Clarifies that conduct in a virtual work environment, including electronic communications using private phones, computers, or social media accounts can contribute to a hostile work environment if they impact the workplace. The EEOC states that, for example, an employee who is the subject of ethnic epithets posted on a coworker’s personal social media page could be subjected to a hostile work environment if the employee is directly exposed to the post or other coworkers see the post and discuss it at work.
• Clarifies that conduct occurring outside the workplace, including on social media, which does not target the employer or its employees and is not brought into the workplace generally will not contribute to a hostile work environment.

Guidance Updates Anti-Harassment Policy Requirements.

The Final Guidance states that a harassment and discrimination policy should be widely disseminated, comprehensible to workers, and include:

• A definition of the prohibited conduct;
• A requirement that supervisors report harassment;
• Multiple avenues for reporting harassment;
• A statement that clearly identifies accessible points of contact for reporting purposes, including contact information; and
• An explanation of the complaint process, including adequate anti-retaliation and confidentiality protections, and prompt and effective investigations and corrective action.

The Final Guidance also includes a “non-exhaustive” list of the elements of an effective training: an overview of the employer’s anti-harassment policy and complaint process; examples of prohibited harassment; information on rights for those who witness, experience, or report harassment; and clear instructions for supervisors and managers on how to prevent, identify, stop, report, and correct harassment.

If you are not a retainer client, [of SESCO Management] contact us to learn about our services by calling 423-764-4127 or click here.