All Tricks, No Treats — Multistate Practice Toil and Trouble

This Halloween, employers’ greatest fears may not be ghosts, ghouls, or goblins — the
terrifying prospect of being considered a “multistate employer” might be enough to send even
the most well-prepared company into hiding under the covers. Since the COVID-19
pandemic rendered remote work a new reality for many businesses and organizations,
employers have been hesitant to enter in the mysterious labyrinth of laws outside their main
or headquartered state. Even if your company employs mostly Massachusetts-based
employees, remote work performed in nearby states like Rhode Island, New Hampshire and
New York, faraway lands like California and Washington, or anywhere else outside of the
Commonwealth carries with it some potentially fearsome unknown requirements. Though
some employees (and employers!) may view the option to work remotely part- or full-time to
be somewhat of a “treat,” employers must be fully prepared for the “tricky” thicket of various
employment and labor laws across numerous states. We cannot possibly rip the mask off all
out-of-state developments that may impact your business, and this alert does not constitute
legal advice, but we will take a stab at summarizing a few of the more hair-raising
developments.
Mummification of Non-Competes?
Every time we turn around, another state is jumping out from behind the bushes with a
new, complicated law on non-compete agreements. Next time you go to hire an
employee who lives or works outside of Massachusetts, make sure the documents you
use will be valid under all potentially applicable state laws.
For example, employers wishing to hold their employees to non-competition agreements
must tread carefully through the treacherous miasma of the new California non-compete
law. On Friday the 13th (of October), 2023, California Governor Newsom signed a new
law that somehow makes it even more unlawful to impose non-compete clauses on
employees in that state. Under the new law, not only are existing non-compete restrictions
void (under the existing Business & Professions Code §16600), but employers that either seek to maintain them or fail to provide written notice to current and former
employees of the voiding of their non-compete restrictions will be deemed to have
committed an “unfair business practice” under California’s Unfair Competition Law,
Business & Professions Code §17200. Companies with employees in California
subject to a current non-compete agreement must deliver such notices to the last
known address and email address the employee provided to the employer by
February 14, 2024.
This new law gives even sharper teeth to §16600.5, which prohibits enforcement of noncompete agreements “regardless of where and when the contract was signed.” While our
crystal ball has not yet predicted how courts will construe this law with regard to employees
that have recently moved to California while bound by non-competes with companies that
have no presence in California, or remote employees of California-based companies who
live out-of-state, California and multistate employers must tread carefully.
Employers should also be wary of drafting any non-compete agreement with a single
corporate default state. Regardless of such a provision, certain states, including California,
Massachusetts, Minnesota, and Washington require that a restrictive covenant agreement
applying to an employee who works in those states comply with
that state’s highly specific requirements.
Pick Your Poison: Pay Transparency or Fearful Fines?
Employers across the country are currently being haunted by their
previous policies of waiting to disclose information about salary and benefits until a job offer
is on the table. Many jurisdictions have passed Pay Transparency Laws (“PTLs”), which
require employers to disclose certain pay information on job postings and position
descriptions. As of the publication of this alert, eight states (CA, CO, CT, MD, NY, NV, RI,
and WA), as well as eight cities/counties (Toledo, Cincinnati, Ithaca, Jersey City, New York
City, Albany, and Westchester counties) have PTLs in effect or going into effect in 2023.
Massachusetts will soon be on the list. The Massachusetts Senate and House of
Representatives recently passed the new “Francis Perkins Pay Equity Act,” which requires
compensation-related disclosures and reporting. As of the date of this alert, the Act has not
yet been signed into law by the Governor, but we anticipate that is likely to happen soon.
Employers beware— failure to disclose the necessary pay information can carry hefty fines,
some in the hellish range of thousands of dollars. Even further, in some of these
jurisdictions, the mere fact that an applicant could live in the locality, or that one employee is
present in the jurisdiction, renders every advertisement covered by their laws.
Cursed Behavior To (Hopefully) Be Quelled By Training Requirements
Many states and municipalities, seeking to banish ghastly behavior before it has an
opportunity to proliferate, have adopted measures that require employers to provide certain
types of training and specific content to their employees on a regular basis.

For example, California requires all employers with five or more
employees to conduct regular anti-harassment and anti-abusive conduct training to
employees in the state. Both New York state and New York City have training requirements,
with employers being required to maintain a detailed policy and distribute copies of the
training to new hires. Chicago also recently joined New York state in requiring specific
bystander intervention training—so that any employee who witnesses such harassment will
be trained on how to intervene. In addition to training mandates, multiple jurisdictions also
limit the manner in which a separating employee can release claims if the employee has
raised allegations of harassment. So, once more, make sure your severance agreements
comply with the laws of all potentially applicable states.
Handbook Horrors
Amidst all these haunting developments, we encourage our clients to review their employee
handbooks to cast out the skeletons of outdated policies and revise them to include currently
compliant ones (on both the multi-state and federal levels). For example, the National Labor
Relations Board announced a new legal standard this year for determining whether certain
work rules (such as those addressing personal conduct, conflicts of interest, and
confidentiality of harassment complaints) violate the National Labor Relations Act.
Handbooks that contain such provisions (as most often do) should be modified in light of
these new standards. Additionally, dozens of states have created new leave laws or modified
existing ones, and the federal PUMP Act has extended the rights of pregnant employees to
receive break time. An employer without a compliant handbook (containing applicable state
addendums), might receive a scare.

For Questions / More Information
To discuss how these recent multi-state developments affect your organization, and for
assistance in reviewing and revising your workplace policies and practices for compliance,
please contact your HRW attorney or:
• Samantha Halem (shalem@hrwlawyers.com / 781-235-4878);
• Sarah Ruter (sruter@hrwlawyers.com / 781-235-4879);
• Julia Russo (jrusso@hrwlawyers.com / 617-348-4338);
• Alicia Ward (award@hrwlawyers.com / 617-348-4357);
• Pete Moser (pmoser@hrwlawyers.com / 617-348-4323);
• Cathy Reuben (creuben@hrwlawyers.com / 617-348-4316); or
• Any member of the HRW Team.