Practical Advice Regarding FTC’s Non-Compete Ban for Employers

 

Practical Advice Regarding FTC’s Non-Compete Ban for Employers
The National Law Review
by: Labor and Employment Practice Group of Bradley Arant Boult Cummings LLP
April 25, 2024

By now, everyone knows that the FTC issued a final rule that would ban all noncompete agreements entered into after the effective date.
Effective Date of FTC Ban
The FTC’s noncompete ban is not in effect yet. It does not become effective until 120 days after the date the final rule is published in the Federal Register. The Federal Register is expected to publish the final rule next week, likely making the effective date around the beginning of September 2024.

Existing Legal Challenges to Ban
The U.S. Chamber of Commerce has already filed a challenge to the noncompete ban (Chamber of Commerce of the United States of America v. Federal Trade Commission, Case No. 6:24-cv-00148 (E.D. Tex. filed April 24, 2024)). There has been another legal challenge filed as well. We don’t know whether these legal challenges will be successful, but we will provide updates when we know more.

Five Things To Do to Prepare
If the legal challenges are not successful and the rule goes into effect (again, approximately early September 2024), here are steps that employers can take to get ready:

1.    Review existing noncompete agreements to see if .....

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NDAs to Suppress Negative Online Reviews Violates Federal Consumer Review Fairness Act

 

Medical Clinic’s Use of NDAs to Suppress Negative Online Reviews Violates Federal Consumer Review Fairness Act, Washington Federal Judge Finds
by: Eric J. Neiman of Epstein Becker & Green, P.C.
The National Law Review
April 26, 2024

Negative online reviews are a concern for many businesses—but they present a unique challenge for healthcare providers, who are restricted by federal and state privacy laws in how to respond. Is the answer to have patients sign a form agreeing in advance of treatment not to make or post negative comments? According to a recent decision by a federal judge in Washington State, the approach tried by one plastic and cosmetic surgery practice runs afoul of a little-known federal law called the Consumer Review Fairness Act (“CRFA”). The case presents a cautionary tale for doctors and other providers who are looking for ways to protect their image and brand.

In this post, we look at the CRFA and how it was analyzed and applied in the federal court case, and offer takeaways from the decision that went against the medical provider. 

The CRFA
The federal CRFA, enacted in 2016, prohibits the use of gag clauses and .....

 

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Church member sues over $5 million tithe, refund request

 

 

Church member sues over $5 million tithe, refund request raises questions about all religious giving
Says church's commercial investments were not 'the work of the Lord'
By Mark A. Kellner
The Washington Times
April 24, 2024

A brother of former Utah Gov. Jon Huntsman Jr. is suing the Church of Jesus Christ of Latter-day Saints for a $5 million “refund,” accusing the church of misusing his mandatory tithing donations.

James Huntsman, who grew up in a prominent LDS family before leaving the church in 2020, says his donations were used to help finance commercial ventures, not “the work of the Lord,” as a church teaching document stated.

Mr. Huntsman claims the church invested his donations to construct City Creek Mall in Salt Lake City — adjacent to LDS headquarters — and support church-owned Beneficial Life Insurance, which was ailing financially.

The church denies the allegation and says the commercial investments were made using interest earned on tithes held in reserve for future needs.

Other religious groups that filed a brief supporting the 17 million-member church’s position say having a court mandate refunds would insert the legal process into ecclesiastical issues, violating the First Amendment’s guarantee of religious free exercise.

A federal judge in California, where Mr. Huntsman now resides, ....

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FTC Announces Rule Banning Noncompetes

FTC Announces Rule Banning Noncompetes

FTC’s final rule will generate over 8,500 new businesses each year, raise worker wages, lower health care costs, and boost innovation

April 23, 2024
Today, the Federal Trade Commission issued a final rule to promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC Chair Lina M. Khan. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

The FTC estimates that the final rule banning noncompetes will lead to new business formation growing by 2.7% per year, resulting in more than 8,500 additional new businesses created each year. The final rule is expected to result in higher earnings for workers, with estimated earnings increasing for the average worker by an additional $524 per year, and it is expected to lower health care costs by up to $194 billion over the next decade. In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule.
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Banning Non Competes: Good for workers, businesses, and the economy

Noncompetes are a widespread and often exploitative practice imposing contractual conditions that prevent workers from taking a new job or starting a new business. Noncompetes often force workers to either stay in a job they want to leave or bear other significant harms and costs, such as being forced to switch to a lower-paying field, being forced to relocate, being forced to leave the workforce altogether, or being forced to defend against expensive litigation. An estimated 30 million workers—nearly one in five Americans—are subject to a noncompete.

Under the FTC’s new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives - who represent less than 0.75% of workers - can remain in force under the FTC’s final rule, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them.

In January 2023, the FTC issued a proposed rule which was subject to a 90-day public comment period. The FTC received more than 26,000 comments on the proposed rule, with over 25,000 comments in support of the FTC’s proposed ban on noncompetes. The comments informed the FTC’s final rulemaking process, with the FTC carefully reviewing each comment and making changes to the proposed rule in response to the public’s feedback.

In the final rule, the Commission has determined that it is an unfair method of competition, and therefore a violation of Section 5 of the FTC Act, for employers to enter into noncompetes with workers and to enforce certain noncompetes.

The Commission found that noncompetes tend to negatively affect competitive conditions in labor markets by inhibiting efficient matching between workers and employers. The Commission also found that noncompetes tend to negatively affect competitive conditions in product and service markets, inhibiting new business formation and innovation. There is also evidence that noncompetes lead to increased market concentration and higher prices for consumers.
Alternatives to Noncompetes

The Commission found that employers have several alternatives to noncompetes that still enable firms to protect their investments without having to enforce a noncompete.

Trade secret laws and non-disclosure agreements (NDAs) both provide employers with well-established means to protect proprietary and other sensitive information. Researchers estimate that over 95% of workers with a noncompete already have an NDA.

The Commission also finds that instead of using noncompetes to lock in workers, employers that wish to retain employees can compete on the merits for the worker’s labor services by improving wages and working conditions.
Changes from the NPRM

Under the final rule, existing noncompetes for senior executives can remain in force. Employers, however, are prohibited from entering into or enforcing new noncompetes with senior executives. The final rule defines senior executives as workers earning more than $151,164 annually and who are in policy-making positions.

Additionally, the Commission has eliminated a provision in the proposed rule that would have required employers to legally modify existing noncompetes by formally rescinding them. That change will help to streamline compliance.

Instead, under the final rule, employers will simply have to provide notice to workers bound to an existing noncompete that the noncompete agreement will not be enforced against them in the future. To aid employers’ compliance with this requirement, the Commission has included model language in the final rule that employers can use to communicate to workers.

The Commission vote to approve the issuance of the final rule was 3-2 with Commissioners Melissa Holyoak and Andrew N. Ferguson voting no. Commissioners’ written statements will follow at a later date.

The final rule will become effective 120 days after publication in the Federal Register.

Once the rule is effective, market participants can report information about a suspected violation of the rule to the Bureau of Competition by emailing noncompete@ftc.gov

The Federal Trade Commission develops policy initiatives on issues that affect competition, consumers, and the U.S. economy. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.

https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes

Scammers Are Using Fake Job Ads to Steal People’s Identities

 ProPublica - Technology
Scammers Are Using Fake Job Ads to Steal People’s Identities
From Facebook to LinkedIn to Indeed, ads are popping up that promise well-paying jobs — if applicants provide their Social Security numbers and other details up front. Scammers then use the information to apply for unemployment benefits.
by Cezary Podkul
Oct. 26, 2021, 5 a.m. EDT

ProPublica is a nonprofit newsroom that investigates abuses of power.

It has become a ubiquitous internet ad, with versions popping up everywhere from Facebook and LinkedIn to smaller sites like Jobvertise: Airport shuttle driver wanted, it says, offering a job that involves picking up passengers for 35 hours a week at an appealing weekly pay rate that works out to more than $100,000 a year.

But airports aren't really dangling six-figure salaries for shuttle drivers amid some sudden resurgence in air travel. Instead, the ads are cybercriminals’ latest attempt to steal people’s identities and use them to commit fraud, according to recent warnings from the FBI, the Federal Trade Commission and cybersecurity firms that monitor such threats. The U.S. Secret Service, which investigates financial crimes, also confirmed that it has seen a “marked increase” in sham job ads seeking to steal people’s personal data, often with the aim of filing bogus unemployment insurance claims.
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“These fraudsters, they’re like a virus. They continue to mutate,” said Haywood Talcove, chief executive of the government division of LexisNexis Risk Solutions, one of several contractors helping state and federal agencies combat identity theft. (ProPublica subscribes to public records databases provided by LexisNexis.)

This particular mutation is an emerging threat, Talcove and others said. The numbers are small so far, but they’re rapidly increasing. In March, LexisNexis detected around 2,900 ads touting unusually generous pay, using suspicious email domains and requiring that one verify one’s identity upfront. The total had grown to 18,400 by July, and then to 36,350 as of this month. Talcove said these figures are based on a small sample of job ads and that the real number is likely much higher.

This form of scam is surging at a moment when targets for job application fraud abound. Millions of Americans are quitting jobs and looking for new ones. An all-time high percentage of workers — 2.9% — quit their jobs in August, according to the U.S. Department of Labor. Meanwhile, huge numbers of laid-off workers are still looking for work, making for a historic churn in the labor market.
How to Avoid Being Scammed by Fake Job Ads

The ads reflect a tactical adjustment by cybercriminals. A massive wave of unemployment insurance fraud during the pandemic prompted authorities to heighten identity verification requirements. In most U.S. states, cybercriminals can no longer simply input stolen identity information into government websites and frequently collect unemployment insurance aid. Now, applicants whose names are used to apply for unemployment benefits often need to verify on their phones that they’re the ones seeking assistance, a process similar to two-factor authentication.

That means scammers may need help from their victims — and sometimes they go to elaborate lengths to mislead them. Some fraudsters recreate companies’ hiring websites. One fake job application site uses Spirit Airlines’ photos, text, font and color code. The phony site asks applicants to upload a copy of both sides of their driver’s license at the outset of the process and sends them an email seeking more information from a web address that resembles Spirit’s, with an extra “i” (spiiritairline.com). Spirit Airlines did not respond to requests seeking comment.

Other job scams are less elaborate and have more visible signs of inauthenticity. One fake ad for airport shuttle drivers on Facebook was posted by a woman who purported to be working at Denver International Airport. Diligent readers may have noticed that the only location linked from the woman’s Facebook profile was a Nigerian city called Owerri. (A spokesperson for the Denver airport reported the profile to Facebook after an inquiry by ProPublica, and the ad is no longer active.)

In other instances, unsolicited job offers simply land in applicants’ inboxes after they’ve uploaded their résumés to real job search sites, which scammers can access if they pose as potential employers. Jeri-Sue Barron has received a slew of emails since the start of the pandemic informing her that she was preapproved for a variety of jobs she hadn’t even applied for. Barron, a retiree in suburban Dallas, had uploaded her résumé to several job hunting sites in hope of finding some part-time work to supplement her Social Security income. She then received multiple job offers with nary a request for an interview. One email originated from a school in India’s Kerala state; another came from a Croatian website she’d never heard of. “They started coming in from places that were weird,” said Barron. “You almost don’t want to find out the next stage.” She ignored the offers.

As with fake unemployment claims more broadly, the fraud is being facilitated by an underground infrastructure, including online forums where cybercriminals share advice on how to perfect their techniques. A person using the handle “cleverinformation” on a U.K. forum called Carder put together a how-to video that recommends posting fake job ads using a generic job application that can be modified to collect personal data. In September, someone going by “mrdudemanguy” on another forum, known as Dread, offered this advice to a person seeking stolen identities: “Pretend to be a local business and post some job ads. When they send in their résumé, call them and ask some basic job application questions. Make them think they’ve got the job as long as they can do a background check. For the background check request they send you photos or scans of ID documents.”

In response to a query from ProPublica, mrdudemanguy did not answer questions about sharing fake ads and instead focused on explaining the source of his recommended technique and its success. “I have not tried this method myself,” he wrote. “It’s just a method that I know other people do and it does work. It can be done in any part of the world, the country does not matter. As long as the job ad looks legitimate, a person looking for a job will be likely to apply.” Questions sent to cleverinformation yielded a similar response. “It’s effective,” the person said, noting that it’s an underused technique. The person added: “Trying to start a group chat where we share our knowledge.”

The ubiquitous ad for airport shuttle drivers was discussed in a similar forum. One version of it was posted in a Telegram channel of a Nigerian scam group called Yahoo Boys Community, along with instructions on what to tell applicants to get them to share their Social Security number, photographs of their driver’s license and other personal details. The post urged the group’s 5,000 members to ask applicants generic questions via email and offer them the gig — but only if they first shared their personal documents to land the plum job. “Once the client gives you the details, buzz me on WhatsApp and let start work on it Asap,” read the July message, whose initiator could not be identified.

Job application scams have been around in various forms for years. Some entice applicants to buy equipment or software from the scammers in preparation for a nonexistent job. Others try to trick victims into working for free or reshipping goods bought with stolen credit cards. But, according to law enforcement agencies, using fake job ads to steal identities and using them to cash in on government benefits is a new wrinkle.

Alexandra Mateus Vásquez fell for one such scam in December 2020. An aspiring painter, Vásquez was thinking of quitting her sales job at a suburban mall near New York City. She applied for a graphic designer position at the restaurant chain Steak ‘n Shake via the widely used job website Indeed. She was elated when what appeared to be a Steak ‘n Shake representative invited her via Gmail to participate in an email screening test for the job.

Conducting an interview via email initially struck Vásquez as odd, but she proceeded because the questions seemed standard. They included queries like “How do you meet tough deadlines?” according to emails she shared with ProPublica, and she provided earnest answers. Hours later she received an email offering her the job and asking for her address and phone number so a formal offer letter could be dispatched. The offered pay was attractive: $30 per hour. When the letter arrived, it sought her Social Security number, too. Vásquez provided all the requested information.

Soon Vásquez was invited for a background check, via online chat, with a supposed hiring manager. She found herself trading messages with an account that had a blurry photograph of an old man and the name “Iran Coleman” attached to it. (Several other applicants described similar experiences in a discussion about the Steak ‘n Shake job on the hiring site Glassdoor.)

The person claiming to be the Steak ‘n Shake’s hiring manager requested copies of Vásquez’s personal records to verify her identity. She shared photographs of her New York state ID and her green card but grew suspicious when the person asked for her credit card number, too. As Vásquez hesitated, she got a call from ID.me, an identity verification vendor used by 27 states to safeguard their unemployment insurance programs. The company asked if she was applying for jobless aid in California. That’s when she realized she was being scammed. “I was so disappointed,” Vásquez said. “I really believed that that position was real.”

Steak ‘n Shake did not respond to messages seeking comment. (ProPublica was able to reach Iran Coleman, the purported Steak ‘n Shake manager cited in the scam. He said the Louisville Steak ‘n Shake he used to manage is closed and he hasn’t worked there since at least 2014. He said he hadn’t updated his cursory LinkedIn profile, which lists him as a Steak ‘n Shake restaurant manager, in years. Coleman said he now manages three Waffle House restaurants. “I feel for that person,” he said of Vásquez when informed of her experience.)

Vásquez reported the incident to the police and contacted the Social Security Administration, which informed her that it had denied multiple requests to create an account in her name. (A spokesperson for the agency said privacy laws preclude it from discussing individual cases.) She then gave up on her job search. “I started doubting if all the jobs I’m applying for are real,” she said. Vásquez recently launched a website to begin selling paintings online and still hopes to become a design professional.

Blake Hall, chief executive of ID.me, said the company has rolled out language on its systems that informs users when their identities are being used to apply for unemployment insurance benefits and warns them not to proceed if they are being offered a job. Hall said it’s ultimately up to users to heed such warnings. “We will do as much as we can to make it clear that they’ve been scammed,” he said, “but ultimately protecting somebody from themself is a really tall order.” He compared his company to a goalkeeper who also needs help from other members of the team, in this case the job websites where criminals post fake ads.

The Better Business Bureau said in an alert last month that Indeed, LinkedIn and Facebook topped the list of online platforms where users reported spotting fraudulent job advertisements that duped them.

Indeed removes tens of millions of job listings that do not meet its quality guidelines each month, according to a company spokesperson, and it declines to list employers’ jobs if they do not pass those guidelines. In July, the site published a blog post detailing how to spot scam job ads. “Indeed puts job seekers at the heart of everything we do,” the spokesperson said.

LinkedIn removed 10 fake airport shuttle job postings after they were pointed out by ProPublica. A spokesperson said that posting bogus job ads is a “clear violation” of LinkedIn’s terms of service and said the company is investing in new ways of spotting them, such as hiring more human reviewers and expanding a work-email verification system for potential employers.

Facebook took down some of the airport shuttle posts after ProPublica alerted the service, but the company did not respond to questions about its processes for spotting and removing fake ads.

In recent months, the social media platform has also been plagued with fraudulent pages masquerading as state unemployment agencies. Some states complained to the U.S. Department of Labor that Facebook was slow to act on their requests to remove such pages, according to a March email from the department to state workforce agencies disclosed under a public records request. A Department of Labor official said that in March the agency set up a new process for states to report fake unemployment insurance websites to Facebook and that “to date, Facebook has been responsive in taking down fraudulent pages” reported by states.

New ones, however, keep popping up: A fake version of California’s Employment Development Department Facebook page was live as of Oct. 12. The agency confirmed the page was not its own, and it was removed from Facebook shortly after ProPublica’s inquiry.

Even if online platforms clean up their job postings, other identity theft scams are proliferating. On Oct. 15, the FBI issued an alert warning about fake websites that cybercriminals created to resemble the state unemployment websites of Illinois, Maryland, Nevada, New Mexico and Wisconsin. Criminals use the sites to steal victims’ sensitive personal information, according to the FBI.


https://lsisinvestigations.com/blog/f/scammers-are-using-fake-job-ads-to-steal-people%E2%80%99s-identities

Alabama judge who called colleagues ‘Uncle Tom’ removed from bench

Alabama judge who called colleagues ‘Uncle Tom’ removed from bench
New York Post
December 18, 2021
By Conor Skelding

 

An Alabama judge who called her fellow jurists “Uncle Tom” and “heifer,” and who allegedly put her finger on the scales in domestic cases has been yanked from the bench.

A nine-judge panel found that Nakita Blocton, of Jefferson County, Ala., had a history of “inappropriate comments” and, as regarded her staff, a “pattern of abuse,” according to Law & Crime.

That abuse included “excessive, unproductive, and unnecessary nights and weekends” she forced her underlings to work, according to the panel’s Dec. 10 judgment.
Nakita BloctonBlocton called her fellow jurists “Uncle Tom” and “heifer.”Twitter

And when her actions came under investigation by the state Judicial Inquiry Commission, the disgraced magistrate attempted a coverup, “order[ing] employees to allow her to see their private cellphones so that information that might be relevant to the Commission’s investigation could be deleted,” according to the judgment.

Blocton, who was a circuit judge in the Birmingham court’s domestic relations division, also used fake Facebook accounts “to communicate with litigants in a pending domestic-relations case in an effort to affect the outcome of the case,” according to the judgment.

She threatened one party in a divorce case and provided advice to another through the fake accounts, according to the complaint.

“False Prophet How Much Is Your White Judge Paying You,” she wrote to the disfavored party. “THE DEVIL IS WATCHING YOU.”

She used fake accounts to “friend” divorce lawyers and even leak information on other judges, according to the complaint.

Her attorney, Emory Anthony, told Above the Law: “We were trying to keep her on the bench, and we were disappointed they removed her from the bench.”


https://nypost.com/2021/12/18/alabama-judge-nakita-blocton-removed-from-bench/

Cosby Held Liable (Again) for Ex-Lawyer's Press Statements

 

 Cosby Held Liable (Again) for Ex-Lawyer's Press Statements

FindLaw
By Joseph Fawbush, Esq.
August 02, 2019 10:07 AM

The California Court of Appeals recently held that Bill Cosby could be liable for public comments his ex-lawyer made on his behalf. This was the second time the California Court of Appeals took up defamation issues involving Cosby and Janice Dickinson, who accused Cosby of raping her in 1982.

The opinion came out a day after Bill Cosby and Janice Dickenson settled for what Dickinson’s attorney described as an “epic amount.”
Anti-SLAPP Motion Sought to End Defamation Suit

The case didn’t just settle for an epic amount, it also involved an epic amount of legal jostling.

Janice Dickinson filed a defamation lawsuit against Bill Cosby in 2015 for comments his attorney, Martin Singer, made shortly after an interview she gave to Entertainment Tonight where she alleged Cosby raped her.

Singer released statements on November 18, 19, 20 and 21 that stated both explicitly and implied in various terms that Dickinson was lying and making opportunistic claims.

That February, Dickinson’s attorney, Lisa Bloom, sent a letter requesting retraction of the comments made on November 18 and 19. Neither Singer nor Cosby retracted the statements. The original complaint alleged that since Cosby failed to retract his attorney’s statements, Cosby endorsed and ratified those statements.

Cosby then filed an anti-SLAPP motion, alleging that Dickinson could not win because her claims could not be discoverable under attorney-client privilege. Ultimately, the issue went to the California Court of Appeals, who held that her claims were not barred. The court remanded, and further legal action ensued, with Dickinson filing an amended complaint and Cosby again filing an anti-SLAPP motion. The California court of Appeals again weighed in, this time on the comments made on November 20 and 21. The issue was not just whether Cosby was vicariously liable, but also directly liable, for the comments his attorney made.
Attorney-Client Privilege Not Applicable – But Only for Cosby

The court determined that there was enough evidence to support Dickinson’s claim that Cosby is directly liable for his attorney’s claims. While Cosby argued that any relevant discovery would be protected under attorney-client privilege, the California Court of Appeals noted that Dickinson could potentially prove her case by showing that Singer routinely sought approval prior to sending out letters to the press on behalf of clients in his 40-year career.

Further, the court held that there was enough evidence that Cosby ratified the statements that he could be held vicariously liable for the statements. It was enough for the court to deny Cosby’s anti-SLAPP motion in its entirety.

Interestingly, Singer was also named as a defendant in the amended complaint. However, the trial court granted his anti-SLAPP motion, writing that the only way Singer could have known his statements were false were through conversations with Cosby; conversations that are protected under attorney-client privilege and not discoverable. Counsel for defendants can rest a bit easier.

Cosby is currently appealing his criminal conviction for a separate instance involving sexual assault.

 

https://lsisinvestigations.com/blog/f/cosby-held-liable-again-for-ex-lawyers-press-statements