Employment Law Challenges and Answers
Employment Law Challenges and Answers
In this, The Faces of Business episode, Eric Sarver, Esq., Employment Law and Business Law Attorney, Law Offices of Eric M. Sarver, Podcast host, Employment Law Today, talks about the current employment law challenges his clients are seeing and some of the ways they are addressing them.
Eric navigates in the complex world of business and employment law, helping businesses ensure that their employment agreements, practices, and business legal fairs comply with and protect the employers and employees as they should. Eric also helps to ensure that business leaders are educated on the latest changes that might affect their businesses.
Eric has been practicing employment and business law in NY State for over 20 years. Eric also hosts the Employment Law Today podcast on TalkRadio.NYC to share high-impact employment topics affecting business owners.
Download our free business valuation guide here to understand more about business valuations and view our business valuation FAQs to answer the most common valuation questions.
Damon is happy to have Eric on his show. The host wants to know about the background of the guest. While answering, Eric says he was born and raised in New York. As a kid, debating and advocacy always fascinated him. When young, he decided to be an attorney.
When he entered law school, Eric realized that the law—which he preferably calls a situational human drama—impacts people’s lives. Eric opted for Employment Law because he wanted to help his community this way.
Damon wishes to know about, in generality, the strangest cases Eric has ever come across.
Do you want to know if your business is ready for your exit or what you should do to prepare? Learn this and more with our business exit assessment here.
At 19, Eric started practicing law. In 2001, at the onset of his legal practice, a “strange case jumped out” at him. It involved a company that paid its employees overtime and kept the proper record. One of the employees had links with the Mob, and his coworkers reported the same. Owing to it, and for a couple of different reasons, the company terminated the man. The guy filed a petition for some apparent reasons. The matter, however, was settled before the trial. To Eric, this was one of his “wildest cases.”
Eric reveals that he spent many years representing the employees exclusively from 1999 to 2000 till 2013. Then in 2013, he changed his mind and now represents the employers. He still represents employees but in a small number, “usually in very high stakes negotiations.” So to say, he lends help on both sides.
He normally deals with such cases in which executives are negotiating their compensation or perhaps negotiating severance.
Get the most value for your business by understanding the process and preparing for the sale with information here on our Selling a Business page.
He tries to select cases involving companies in federal court, state court mediation, arbitration, and as the plaintiff’s attorney.
Moreover, there’s a lot of compliance work that helps business owners follow all the different federal, state, and municipal laws. These laws govern everything from wages and hours to overtime and discrimination, if any.
Eric claims that the quality of his work urges his clients to re-hire him.
Damon seeks Eric’s opinion on the toughest compliance issues.
Eric refers to some “very prevalent” issues during 2020 and 2021. He thinks these prevailing issues are directly or indirectly liked “with the COVID-19 rules and regulations and protocols.”
Firstly, paid leaves, paid family leaves, paid sick leaves and paid bereavement leaves create issues because many states are changing their paid leave laws.
Secondly, to Eric, quarantine leave “has been a big thing for my clients.” Moreover, a complex issue arose due to the Americans Disabilities Act (ADA). Many people suffering from long COVID are claiming to be disabled. “How do you accommodate that?”
Thirdly, there is an issue that has to do with discrimination and compliance. Complainants seek mandate arbitration for sexual harassment claims or gender discrimination.
Lastly, there are issues concerning compliance with different non-compete clauses in different states.
The host wants to learn more about arbitration.
Eric goes into detail, telling the audience that in the last few years, there’s been a rigorous push toward laws. Many states have had laws enacted. Legal questions emerging from this push made an employer ask their employees not to repeatedly take the disputes to court. So, it became a standard practice to take offenses like sexual harassment, sexual discrimination, or gender discrimination into a mandatory arbitration setting.
Similarly, the law offers arbitration through a reputation clause as well. It deals with cases like an initial employment agreement and a severance agreement. Moreover, arbitration comes into play when any matter the parties think they can’t resolve amicably. Instead of going to court, they agree to an arbitration process made with the American Arbitration Association (AAA).
Additionally, different states have different laws. No one can “force people to arbitrate when it comes to sexual harassment, or non-disclosure around those issues.” The reason is that these are issues of public concern. And they want people out in silence and want to be given them a voice too.
Eris goes on to say that there’s a bipartisan bill going through Congress this year, which is said to “repeal arbitration as a mandatory clause.” It’s called the Forced Arbitration Injustice Repeal Act of 2022 (the FAIR Act). This Act empowers employees to take their employment contracts to court after the employs have said “no” to the arbitration.
Eric clarifies some legal issues. During the Pandemic, many employers rejoiced about getting remote and depending solely on technology. And they believed they could get rid of their office lease and equity. “The challenge is that,” he continues, “many of them didn’t realize that they have to follow the laws that govern where the employee lives and works.”
So if they work in New York City, and their employee lives in Connecticut, the employer is bound by New York law.
Moreover, employs and employees have to know different laws governing paid leave. Eric says that he has seen Florida companies where they hire New Yorkers and don’t pay them paid maternity leaves because they are in Florida.
Eric strongly feels the need for companies to get with an employment lawyer to get into compliance. Otherwise, what these companies think they’re saving an office rent, “they’re gonna pay in penalties and or fines lawsuits.”
Damon asks the guest if he has seen employers hit with compensation claims by home-based remote workers. Eric responds that although he hasn’t handled a case like that, he has read and heard about it. He takes the audience through many scenarios. However, he maintains that work-from-home creates compliance issues.
Damon wants Eric to talk about changes in non-compete laws and their impact.
The guest answers that the type of work determines their impact. Different businesses are impacted differently. He explains that many states have passed the minimum salary threshold subject to a non-compete agreement. “So if they’re not making that and you try to give the employer non-compete, that can be considered null and void.”
Secondly, some states are changing the definition of hourly work. Non-exempt professionals cannot be awarded a non-compete agreement in those states.
Lastly, the courts want to reduce the amount of time under consideration.
Damon wants to know how different law enforcement departments are performing, especially when tax collection is low.
Eric says that he sees the Department of Labor come at people with random audits. They take complaints seriously. They properly investigate to see if any industry is committing wrongdoings. Similarly, he critically evaluates the performance of the Workers Compensation Board.
Damon praises Eric for educating business professionals about employment law through Employment Law Today. Damon has been one of Eric’s hosts. He thinks Eric’s endeavors educate employers “so they understand the matter and make informed decisions.”
Before the curtains fall, Damon thanks Eric for providing invaluable answers to employment law challenges.
non compete, employees, laws, employer, people, clients, clauses, compliance, states, arbitration, issues, company, business, contract, damon, case, pay, question, claim, talk
Damon Pistulka, Eric Sarver
Damon Pistulka 00:00
All right, here we go. Take two we started with I thought we were live a minute ago and we weren’t. But hey, I welcome to the faces business. I’m your host, Damon Pistulka. I’m excited for our guests today. We have Eric Sarver here from the Law Offices of Eric M. Sarver. We’re going to be talking about employment law challenges and answers. And, Eric, welcome for me, or thank you for being here today.
Eric Sarver 00:27
Damon, thank you so much. It’s a pleasure to be on your show. As I said, when we were not live, I meant it. And I mean, it now it’s, it was really great to be here. And I’m looking forward to our conversation.
Damon Pistulka 00:36
Yeah, we’re gonna have some fun. Now, I tell you what this is for people that are using stream yard out there because there was an annoying habit in stream yard where it was not mirroring your camera. So if you look right on on in the real world, you look left in the the video world, they have fixed that go into your settings and change the mirror setting because Eric asked me about it, and I hadn’t bothered to look at it. So thank you, Eric, for that tech tip and helping us get this straightened out.
Eric Sarver 01:07
My pleasure. You know, I’m not one, it’s usually just telling you before I actually into my legal analysis, acumen legal skills, but usually the text is not my strong point. But maybe I’m picking up things here and there over the course of my life. So I’m happy to Yes.
Damon Pistulka 01:23
Yeah. So that was a great, great help today. So Eric, I’ve got it. You gotta always like to start out. Tell us a little bit about your background, your background and in in law and employment law, and what really drew you into it?
Eric Sarver 01:37
Yeah, sure thing, David happy to oblige there. Well, so you know, I was born and raised in New York, I was born in Brooklyn, and my parents moved to Milan as a kid. So I grew up in a suburb of New York. And I always gonna have this interest in, you know, in debating and discussion and just in advocacy, as a kid, and I found it very, like, fascinating to me. And, you know, when I got older, I knew I wanted to be an attorney, I had this hunch when I was even a young boy.
And I, you know, I saw on TV and I saw some relatives who did it for a living. But when I got to college and law school, and I saw what types of law you have, that you can practice, implementing already spoke to me, Damon, because it’s very much like a human drama type of situation, you know, it’s an area of law that I think really makes an impact on people’s lives.
You know, we spend so much time either as an employer of building our company building our brand, to work hard to employ people, or on the flip side, being an employee somewhere. So I was drawn to also that the human drama but also just to the, the, the myriad issues that come up, you know, I like Ella Sikka. It’s really allows on a strategy to figure out the best way to comply with the law or defend against a lawsuit. So I just, I think Jordan into it for that. That human interests component. Yep.
Damon Pistulka 02:54
That’s cool. So going through your Career and Employment Law, guess what is one of the strangest cases that that stick out in your mind? That you can I mean, that in generality, right, right.
Eric Sarver 03:11
So yeah, yeah, nothing I was telling me I’m not joking. So yeah, like, you know, a couple I’m trying to keep it as vague as possible. But that, you know, and that’s it goes back away, right, because I started practicing employment law in 19, January 29, and worked a couple small firms started my practice in 2001.
So I think couple of strange cases one that really kind of jumped out at me was when it was a company and they had a bunch of employees they were paying them, you know, overtime and I keeping the proper records. And then like one of them actually, who was a plaintiff in the case ended up having like mob connection ties, and a co worker had to report that and so the person who reported it was getting terminated for different reason.
But it was like involved the pasta whistleblower situation because the person would love connection and as the I guess, the I don’t say informer mod like the sort of like a I don’t say the small mob like like a sidebar, not like the big like mafia, you know? Yeah. So it was it involves like whistleblower issues involving like, it’s possible RICO claim that I don’t really handle that.
So it just and the employer was kind of quite the middle of all this didn’t know, going into it. It actually came out in the midst of discovery. So the case settled before trial, but that was just such a crazy yeah. Oh, yeah. Don’t even talk about that much. You can, you know, I tried to keep it like, but I that was one of my probably wildest cases. It came on and started out as a wage and hour issue and quickly went in other directions. So
Damon Pistulka 04:48
yeah, yeah. On and I’m sure that, as you’ve you know, do you first of all, do you normally represent companies or our employees ease in in your practice?
Eric Sarver 05:03
Yeah, that’s a good question. Thank you for asking as I can clarify. So I spent many years representing the employees exclusively from I’d say, 99 to 2000, maybe 12 or so about 10 years ago. 2013. And then in 2013, I kind of changed my practice a bit to the point where now, I represent most of the employers, they represent the employer about 90% of the time, I represent a handful of employees, usually in very high stakes negotiations. So it’s not quite litigation. Of course, I check for any kind of conflict check.
Yeah, can you say executives who either are negotiating their compensation, or they’re perhaps negotiating severance, or they have a possible claim and they want to explore enhanced severance instead of that claim?
And lastly, if say, executive might be accused of wrongdoing, and instead of being railroaded, I can defend them and keeping their job. So they represent Okay, the company the Management site, yeah. Okay. Cool. And that’s and that I’m sure when you’re doing it that way, you kind of get both sides and helps you on, on to for for defending either side, too, because you can kind of keep the perspective.
Yes, absolutely true. You know, when I talk with employment counsel, the same grade, I have a couple of cases that are representing the employer odds, I’m defending the employer. And, you know, I talked to opposing counsel, often I can, I can either see the direction they’re going in, like, I didn’t kind of read between the lines and tell, you know, do they think they have a strong case?
Or did they think they don’t have a strong case, because I remember, using certain techniques based on you know, if the facts are on my side, and the wall was on my side, or if it was on my side, if I tried to select my cases, you know, range from, you know, very exclusively, but I often, you know,
I find I defend, as I mentioned, companies can be in federal court, state court mediation, arbitration, and like, what I do is I try to get into the mind of the, of the plaintiff’s attorney. And so you know, even times even will tell them, you know, I represented some employees as well, I have many years. And I understand that when you representing someone, this is a big concern.
And so my client’s perspective, is this, so why don’t we talk about, I think it kind of it, it puts them at ease, it doesn’t present it as if, you know, we’re mortal enemies here, we’re just two professionals, you know, doing our jobs. And, you know, I’ve been where they are, and I’m just trying to say that, you know, I can tell when a case might be going south for these reasons, or so it’s helpful.
You know, and it’s also whether it’s defense or compliance, there’s a lot of compliance work, also, which is, you know, the right, that’s sort of the proactive side, that’s the helping business owners to follow all the different federal, state and municipal laws that govern everything from wages and hours to overtime, pay to discrimination.
Because if I can help them to follow the law, and then have those policies in writing and communicate with their employees, and, you know, I can probably spend much less time with them than I do in litigation. Not that I love my clients, but I’d rather see them spend less money on compliance, and then hiring me back for other business law needs or employee handbooks then, you know, be in the trenches with them for, you know, eight months, a year or two years, however long it takes.
Damon Pistulka 08:18
Yeah, yeah, cuz litigate, employee litigation can take an awful long time.
Eric Sarver 08:23
Sure, it can. And it really has an impact on everything from the sale of a business, you know, to due diligence and every process to let’s say, retracting investor, you know, if you’re a startup company, and you’re looking to raise money, and you’ve got, you know, a large racial suit against you that maybe could have been resolved, or a wage and hour see, because the employer didn’t follow the tip pooling or overtime or Commission rules be very problematic. So yeah, I’m happy to help, you know, my clients. If you’re in New York, you know, and even in New Jersey, to some extent, you know, I can help with the, all that stuff.
Damon Pistulka 08:56
Yeah. And when you talk about that, that’s one of the things that a lot of business owners, I shouldn’t say neglect, but don’t really understand that any outstanding litigation, going into trying to sell a business raise money. There’s several instances where you want to just take care of that kind of stuff ahead of time. So you’re not you because you really can’t get it done with that kind of thing, because of its open ended in any way that it’s going to kill a lot of your efforts to do that.
Because of the risk it creates. So as you mentioned a couple of things here, and we’re going to talk about non competes too. But there have been a tremendous amount of changes in the state laws across the United States, dealing with Wage and Hour, especially in contractor kind of situations. And other things. You didn’t talk about compliance. What do you see are the are the toughest compliance issues you’re trying your client Sir trying to, to to do correctly now, you know, what are some of the toughest issues that are they’re dealing with in compliance
Eric Sarver 10:10
in terms of wage and hour overtime situations? Or just
Damon Pistulka 10:13
overall? What are the compliance issues that you get brought to you the most,
Eric Sarver 10:18
I would say, you know, Damon that lived or not one of the ones that was very, very prevalent in all 2020 and 2021, that’s still even prevalent today has to do with the COVID-19 rules and regulations and protocols, you know, you still have a lot of outstanding state laws, and they everyday vary from laws around a contagious infectious contagious disease policies in place to health and safety standards. I get called in a lot for also issues around like paid leave, a lot of states are changing their paid leave laws, you know, paid family leave, paid sick leave, pay grievance leave, right.
And then of course, so I’m getting called in a lot of that, and there’s quarantine leave, that’s now, you know, less of an issue, but has been a big thing for my clients. So definitely, number one, are the COVID related laws, including laws around existing laws around their compliance with the ADA, right with the Americans Disabilities Act with now no COVID Yet people that are claiming that their long COVID is a disability, and it is in fact, and how do you accommodate that?
You know, how do you kind of say you can’t come back to the office when, because of their condition they have that might not normally be deemed a disability.
But that condition plus COVID can be very deadly. So he stopped people with asthma were not necessarily deemed, you know, disabled having this ADA claim. So definitely learned that and then I guess the third issue has to do with discrimination, compliance with the laws around, you know, not being able to mandate arbitration anymore for sexual harassment claims or, or gender discrimination.
I see a lot of clients that get tripped up because they have arbitration claims now still in their employee policies and contracts. And then maybe Lastly, is just the fact that with, like, compliance with different non compete laws in different states, you know, I know we’ll get to that later.
But you’ve got states now saying that, you know, if you have a minimum salary threshold, you need that to have a non compete, or you can have with hourly workers, an orange can’t happen with anyone in California. So really, that all that comes into play, especially with the remote workforce work from home, you know, you’ve got people now working all across the country, and employers have to know how to do comply, what’s the compliance on all those issues in each state that they workers work?
Damon Pistulka 12:34
Yeah. We’ll ask some questions about that. You went back, and you said something here a while back about arbitration. Now, not being not being able to do mandatory arbitration. Explain that a little bit more? Because that’s it sounds like a pretty a pretty prominent change that we need to be aware of.
Eric Sarver 12:55
Absolutely, yeah, sure. I think have you explained that? So, you know, in the last few years, I’d say, probably in the heels, that meaty movement, there’s been a lot of push towards laws, a lot of states actually have had laws enacted, which basically preclude an employer from recurrent requiring that their employees, you know, take the dispute around sexual harassment, sexual discrimination, or gender discrimination into an a mandatory arbitration setting.
So here’s your reputation clause. It might be in initial employment agreement, it might be in a severance agreement, in fact, but it basically says that, you know, the party essentially have a dispute and they can’t resolve it amicably that instead of going to court, they agreed to an arbitration process made with the AAA the American Arbitration Association, or with an employment discrimination with gender and dispute.
So a lot of laws are coming from different states. And the states or states are saying, No, you can’t force people to arbitrate when it comes to sexual harassment, nor can you force them to have like a non disclosure around those issues.
The idea is that these are issues of public concern. And they want people out in the silence and want to be given them a voice too. So this has been picking up a lot of different states. And even in fact, there’s a bipartisan bill, you know, going through the federal government Congress this year, which is said to repeal arbitration as a mandatory clause. It’s called the really the FAIR Act.
And so this is something that we’re seeing a lot more of Now, what happens is that employers don’t realize that they use a lot of times people right reuse or templates, I think, right? I’ve had this employment contract and using it for 20 years now. So when I hire, you know, Susan, or Fred, or given us to sign, but I always encourage my clients to work with me.
Let’s meet every year, Let’s update our employment agreements of the, you know, our non solicitation clauses and our restrictive covenants and our employee handbooks. So that’s the big issue now, you know, really, you’re finding that and it’s the challenge is that an employee may want to arbitrate, go to court and The employer tried to say no, you sign this agreement to arbitrate. And so the courts are starting to invalidate those clauses and saying, you can proceed the court, you know, as is.
Damon Pistulka 15:08
So now, this is a question and you may not be able to answer it, because it could be different situations. But if I have something like that, and an employment agreement, does that make the whole employment decree in agreement? not valid anymore?
If I have one like that, and they throw it out and say, well, that that’s not right. In the employment agreement? We can’t go with that. Does that mean that everything else has gone on at that employment agreement?
Eric Sarver 15:32
That’s good thinking. Good question. Usually not. Because usually, when people do have contracts, they have different sort of missile echo and miscellaneous provisions clauses like and when they say things like, you know, like, say, say, you know, this is a full contract and of itself, and they might say, you know, that this is, the headings are not in any particular order.
But usually as a clause part that talks about how if any one clause or provision of this contract is ever, you know, struck down void enough? Yep. That right, that the other is yo, the other clause in full force, in effect, is it fully? So the short answer is, you know, the only time that might happen, let’s say if if an attorney drafted a contract, didn’t have that, but honestly, I’ve been doing this for a very long time. And every contract I seen, you know, has that. So,
Damon Pistulka 16:19
yeah, I was just curious, as you’re saying that I was like, well, he doesn’t throw the whole thing out?
Eric Sarver 16:23
It’s a good question. You know, and honestly, you know, people are trying to make that argument. Although one could be creative and arguing, one could argue that looked at the contract may have encouraged no pressure, that the whole contract in of itself was one of the hegemon with that people didn’t really fully have the same level of bargaining power.
And they might be able to point that arbitration clause as an example, like, Hey, I was forced into this. And fortunately, other clauses as well. But that’s good, I think, a very high standard of proof in our code burden to show and if the contract language says in paragraph 16, that if this is if the arbitration clause is void, or any clauses will either ask them, so usually a court would say no, is checked out the arbitration clause, and the rest enters
Damon Pistulka 17:06
is okay, okay, cool. You brought up another thing, too. Now. Now we talk about that. So So in those types of situations where you can’t have employees to agree to arbitration basically, doesn’t mean you can’t not use arbitration doesn’t preclude you from using arbitration, but it doesn’t force anyone into using arbitration.
Eric Sarver 17:31
Good point. And it’s usually let regard to certain issues, right, usually regard regarding discrimination or wage and overtime. So if you have to have an employee, and there’s disagreement about saying, you know, their parting pay or their Commission’s you’re allowed to use arbitration, those settings, it’s, it’s the the cases that are a public concern, like, you know, overtime violations, sexual assault and harassment in the workplace, and discrimination.
But you’re absolutely right, you know, and so your excellent point, because my challenge often is to make sure that the language in the contract, makes it clear the parties can voluntarily consent if they so choose, and how you make it clear that, you know, each side was even in that, that once I wasn’t sort of de facto right forced into this.
So often, you know, unqiue clauses, my contracts, my clients that encourage the company and encourages the employee to have this contract reviewed by an attorney. You know, it used to be I noticed the trend years ago, right.
And, uh, maybe you see this too, Damon, I know, you’re a lot of work with businesses, I feel like there was a trend years ago to try to get employees to sign agreements without an attorney, they’ve got an attorney to to push back and cause problems. But now, you know, there’s a big push to an encouraging effect of employees to have an attorney that way, and they can’t claim that they’re forced into any of the causes, you know, or the company.
Damon Pistulka 18:56
Yeah. And I think that that’s a great point. It’s a great, that is a really, really good point. Because if you don’t encourage them to have somebody review an attorney review it, yes. And and getting that third opinion.
You know, at least you’re making your best attempt for them to get the advice that they need. Right. And that’s, that’s really good. So now now we move into a couple other things because you brought up a nother topic but but the remote workers this is this is man, this is a can of worms that I just I don’t know how the heck employees are doing because you can be sitting there today in New York City with people in all other states around the globe, that are that are you know, wage employees, not not just contractors.
What I mean, how what do you see an employer’s really it because it’s just like it’s some mind boggling to me think that I got I’ve now got employees in 27 states when they were all in the city around me. Absolutely four years ago.
Eric Sarver 20:09
Yeah, I’ve seen this a lot, you know, a lot of companies, you know, my clients is agnostic. So they’re everything from technology and advertising to restaurants or to doctor’s offices to. That’s it, my clients can’t go to vote, right? They’re a restaurant, let’s say they’re mostly on the premises, or if they’re a construction company that can construct things. But for my clients, and let’s say marketing, advertisement, business consulting, it is really a can of worms, that’s a great way to describe it to you.
And it’s actually a bit of a Pandora’s box, if you will. What I’m seeing is that, you know, I think a lot of employers rejoice in a sense of, Oh, my God, this is great. We have we all were remote. During the pandemic, we got our technology up to speed, we got zoom, we got live stream with the mirror now and the camera and I’m sitting in kitchen, but you know, the other stuff going on, we can do this.
And they said, We’re gonna get rid of our office lease, save money on a commercial lease, save money on equity and all that stuff. The challenge is that, like, you know, a lot of them didn’t realize that, you know, you have to follow the laws that govern where the employee lives and or work. So if they work in, let’s say, I take an example. I’m in New York City, it’s my office is located right.
So employee lives in Connecticut works in the office periods week in New York. Right? The employer is bound by New York law, right? The employees remote, let’s say the remote or hybrid, they can work entirely where they live in Connecticut. If you live and work there, then you have to follow the candidate sloshing around everything from you know, what is the minimum salary threshold to be an exempt employee, right to not have to pay overtime?
And under that state’s law, or one of the factors? What are the laws around non competes? If I mentioned that I’d come back said a few times it’s an important topic, are you now working with an employee in a state where they can’t give a non compete because their salary is too low? But that’s the threshold.
So you really have to know all these different laws around everything from paid leave. You know, I’ve seen Florida companies where they hire New York people, and they say, Oh, you don’t get, you know, paid maternity leave, because we’re in Florida. Well, it’s not true, you know, persons in New York, it’s a whole different ballgame.
So I really see the need for companies to get with an employment lawyer, you know, get with HR company and really get into compliance. Otherwise, what they think they’re saving an office rent, and you know, they’re gonna pay in penalties and or fines lawsuits. From it could be it could be real, wild success. And if done right correctly, or a total mass have done wrong. That’s where I come in to try to help companies follow those laws.
Damon Pistulka 22:40
Yeah, I get one last question that was brought up to me a while ago about that. Have you seen employers hit with workers compensation claims with home based remote workers?
Eric Sarver 22:56
It’s funny you say that? I haven’t seen it personally when your clients yet. But I’ve certainly been reading about this a lot and seeing it in different cases that it actually very much is a potential liability to be concerned about because, you know, you have an employee, let’s say works for you.
And they’re, if they’re forced to be remote, right? If it’s if it’s, you’re telling them you know, like, employee you know, x you are to work at home fail on, let’s say, like, they chip over some wires that they set up because they have their computer now, with a router and extra wireless, then yes, you can be on the hook there.
I’ve heard stories and colleagues where they said, hey, guess what, we’ve got, you know, someone now when they broke the shoulder, work from home tripped over their own, you know, and it’s question of, well, what is that the workplace, and it’s sort of it is in its infancy, is to new workplace.
So you definitely have to be aware of that. And, and mindful. And, you know, it’s just one one reason Now, the interesting there too, is that how do you make that place demon safe, right? If you’re in a workforce, if you’re in an office, you have people come in and make sure that there’s, you know, the carpets laid out flat and he wires up against the wall.
You really don’t want to be knocking on employees doors, you know, inspection. It’s kind of inappropriate, but that’s an issue. It’s, um, you know, this new work was is like, an issue with a lot of compliance issues that come up. And, you know, we have workers comp unemployment insurance, different states. I’m seeing hearing it all I’m seeing and hearing
Damon Pistulka 24:18
all Yeah, I bet I bet because it’s, it’s opened a lot. I mean, and for some businesses, it’s really been a blessing because they can, you know, you can hire talent outside of your area, which is, I mean, he’s extremely valuable for some of these places. And, and then for some of the employers, the employees as well, because I can be living in Montana working a remote job that’s in you know, Silicon Valley or New York City where you’re at where the wages are much higher for similar position because of the cost of living and I can be making out that much better if I’m, if I’m on all those places.
So yeah, that interesting stuff. So as you as you look at this, we talked about there’s there’s two other subjects and noncompete is one of them, we’re going to talk about the non competes, because I think that is that’s fascinating.
The other one that I’ve seen is the changes in contractor slash w two, employee categorization or whatever you want to call it. Yeah. How much? Is that hitting your your clients? Or is everybody pretty much said, you know, I can only use contractors very limited? Or what are some of the changes you’ve seen that have made it challenging to stay compliant?
Eric Sarver 25:36
Yeah. That actually is a great question. And to answer your question, unfortunately, a lot of my clients gonna get very, very hard on this front, when it comes to independent contractors and employees, right, Miss classification? You know, I say that there actually been different changes the law. I mean, there are certain criteria, daemons certain standards that have been in place for a long time, that different State Department of Labor use the IRS uses to consider if you are an employer or an independent contractor.
And usually, the factors have to do with like, who has been the main, you know, the control, who’s who has the autonomy, direction and control over the persons on logistics and scheduling, their finances, right, who’s calling the shots here, so to speak. And so these criteria have been pretty, pretty fixed for some time.
But now, what’s happening is that certain states have started passing laws that say that, you know, if you are getting a gig economy worker in like this field, right, like, I know, this isn’t, you know, moving towards, you know, drivers and such, that you are in a newer why they’re brought in the class of people who the states, some states are considering to be employees. So California, for example, is, you know, brought in to say, if you work in this type of position, right, you are, must be doing to employee.
And so the bigger companies Lyft, you know, Uber, you know, drive companies are really pushing back in some of these last, I’ve seen laws in Rhode Island, Massachusetts, that are either passing or on the back to the past, that are getting trying to just like broaden the net, and the who’s an employee, even if those workers might have their own choice, and they have their own jobs, they might be like driver competition, maybe they drive Uber twice a month, one month, and six times.
Next, you know, so I’ve seen a lot of clients of mine were very confused, because they don’t know where are their workers stand. And also, we’re seeing much higher levels of enforcement, I think the Department of Labor in various states, you know, lost this my theory, they lost revenue a lot in 2020, and 2021.
And they weren’t out there doing lots of investigations, they weren’t doing inspections, you know, fewer people working means fewer claims. And the low hanging fruit is to do a random audit on companies, or to audit and say, Hey, this company in the store has workers, but I think they should be employees. So it’s a big issue requires a lot of guidance, I think, in my opinion.
Damon Pistulka 27:59
Yeah. Yeah, that’s a great one. I know, we’ve seen clients that that have, you know, gone through their records, they’ve had those challenges. So now, when we come back to the, to the hot topic of non competes, non competes, yes, we in and you do a lot of work with non competes in, let’s talk about some of the changes that have affected employers around non competes.
And then also you you help employers still get some of the benefits of non that were offered by non competes. But another way, so let’s first of all, let’s just talk about some of the changes around non compete agreements for employees that that you seen, that are happening. All
Eric Sarver 28:46
right, Damon, sure thing and by the way, I read how much it impacts what you do. So your way as well, because right, you have clients and you make sure they’re in compliance before you can help them to, you know, turn around and sell business. So it’s great time if anyone out there who might be a business owner and employer. Yeah, but not the Pete’s big topic these days.
Right. It’s something I’ve spoken about and webinars and presentations and having to speak about again. So what I’m seeing is a few things. Right. One, I think you asked me the question, what changes are we seeing in the world of non competes in the standards?
Well, okay, so first off, I know, there’s a number of states have passed sort of minimum salary threshold to say that if an employee is working in that state, I believe it’s a let’s see, I know that. Illinois has I think, Illinois, I think Washington, other states have these have where the employers be making a certain minimum salary like 75,000 In some states, 100,000 other states in order to be subject to a non compete agreement.
So if they’re not making that and you try to give the employer non compete, that can be considered null and void. And when an employee goes work with competition, and you say, hey, not too fast, they’re gonna send you a cease and desist letter. Send it on Vietnam gonna see you. You might have a leg to stand on. So that’s one changes, states that have minimum salary threshold. Okay?
Number two, some states are changing the scope of saying if you’re an an hourly worker, right, someone who’s you know, subject to overtime, non exempt professionals, then you cannot be given a non compete in those states. I know that New York and New Jersey, Maryland are all looking at, you know, like, different classifications of positions that say, certain positions, you know, professional exempt, maybe non compete,
you know, non professional administrative worker, making less than a certain threshold salary, not the piece made soon be unenforceable. So that’s a secondary, right, you’ve got the salary threshold or the type of work of air and then you’ve got states like California, that are altogether banning non compete saying, if you, except for, I think, a very few, I believe it’s an exception for the suit medical fields, where they do medical research is such a highly competitive field,
I believe that, you know, they don’t want to lose people into working on things, they try to sunset that day in certain hospitals. But that’s how often does that come up, you know, in the public and private employment world, right. But most of these states have these laws that say, you know, if you have a non compete, and you it’s not valid, so my so the thing is, if employers are really dead set on Oh, and lastly,
the amount of time that the courts are willing to impose, enforce a non compete has been shrinking from, you know, when I started practicing Wednesday night, it was two years, that 18 months and 12 months now, it’s about 612 months that you can, and by that, I mean, six to 12 months after the date of termination, that they can be barred from working for the competition, I started their own company. Yeah,
Damon Pistulka 31:42
well, that’s good to know, too. Yeah. So you
Eric Sarver 31:45
know, you’ve got all these different, you know, changes in the law. And then, of course, so your people that might want to have a non compete, but make sure that state allows it, you know, if you have remote employees especially, and they remote in California, and you’re in New York, look at California law that governs.
What I’m seeing, though, is that, you know, between that in the court striking down occupations more left and right, it makes others makes sense to find other ways, as you alluded to Damon, to protect your company, right?
So let’s say you have, you know, you can have a very strong, it’s called a non solicitation clause, that’s mean, you know, don’t take our clients don’t take our business, right, you can have clauses that talk about protecting proprietary information right, from being taken and use somewhere else where another company so you know,
if someone’s competing, and you find out that they took some of your business, your senior confidential, you know, trade secrets or marketing, that can be a reason or grounds to seek equitable relief, maybe to get them to stop using that, right that proprietary information, or to sue them for money damages, or both.
And also just, you know, like, you could have clauses that talk about working in a place that when you work here, you know, you devote all your time, effort energy to accompany it’s sort of a no conflict of interest, Nogovitsyn obligations type of clause, so it’s not a non compete, but you can read between the lines that are someone’s working for the direct competition, their attention divided, and that might be a conflict of interest to comp so.
So there are different ways without using the phrase non compete, to have those clauses, you know, there have protections rather than non competes provide, without, you know, all the headaches of following the right, the changes in the law and, and thinking that you’re protected, and then you’re not, you know, a lot of companies think I’m saying now because it’s not in the beat.
And then the employee, you know, spins off of their own startup with their, you know, fine with the workers, and realize that they’re in, let’s say, a state where, you know, the non competes not valid, or they were fired.
And some states say if they’re fired, that the non compete now is not valid, which is a very new thing used to be didn’t matter how you parted ways where I need to look again and see what shape that was, I was reading about this, but I’m blanking on the exact state, but I remember that was a big thing that it used to be you know, the point didn’t matter right?
If you were fired, quit resign mutual taneous parting of ways that it was all about, you know, protecting the competence, the the competitive trade secrets, think of competition. So, yeah, that’s, yeah, I’m really into that. Wow,
Damon Pistulka 34:18
this is great stuff, is great stuff. I mean, especially when you look at if I’m in a state where if you’re non compete Sure, if you’re using a place where you can use it, using it appropriately. But if you’ve fired somebody, that might be the person that you don’t want to go out and and use that stuff. So not being applicable, if they were fired, it’d be a really big deal.
And we’re setting these other ways the non solicitation of you know, customers, employees and using the trade secrets is another thing that’s that’s a good workaround that can help people do this, right. The one thing that we see every time in a business deal every time Yeah, without a doubt, the owners have a non compete, there’s always the buyers always expect a non compete for for the owner from the sale of the business. Yes. Now, I have to feel that that’s a pretty appropriate use of a non compete agreement.
Eric Sarver 35:16
Yes. And along those lines Damon, you know, the laws around employers employees, it usually looks to the question I mean, like are you is not gonna be creating like a hardship, economic or impact on livelihood. And that issue comes up much more, you know, with, say, you know, your standard worker, a middle management employee, who now is let go from a job has no income and can’t work for people in industry.
But when you let’s say, the owner who’s selling the company for, you know, say, seven, or eight, or nine, pick a number, right? And you don’t want and you want the value to go to the buyer, not to have the seller, then just open up a competition, using all their all the goodwill that they cultivated, and all the, you know, different trade secrets they learn.
Absolutely, I think that’s a very appropriate use of non compete. And I also don’t want to give the impression that there’s never a good time, for non competes, there are certainly situations, we have some very competitive industries out there with very, you know, like,
AI being used, or hyper certain, certain super, super high tech issues that if and they’re very competitive, and if someone goes from company to company being with this new wireless information, they can destroy the company that worked at. So you do want to have some, there is a place for them. It’s just that, that they used to be I think, over the years way too broadly.
And I think that, you know, one way to do this is to be more selective. Another thing you can have too, is you can have a paid dog appear. I see this a lot where you agree to pay the employee, I see it’s now a bigger company, the big companies can afford this, right? They say, you’ve got to talk about non compete, and we’re going to pay you for the say, none of those 12 months, right? No pay you like your store your salary was.
So basically, the person can’t claim economic hardship, because they’re getting paid. Now, they might say, I was slowed down from, you know, finding a position that I could have been at for the next 20 years, what’s gonna happen when this runs out, but that really goes a long way. And people less challenge because they go, okay, take my time now, or it goes either six months, nine months, or until you find a new job, whatever comes first. It’s not competitive. So tell me
Damon Pistulka 37:30
Yeah, and that’s a long ways in the companies that I ran in the past, or the investment owners, we always if we use a non compete, it always was it’s basically like saying, You’re gonna, you’re getting paid for that amount of time. Right. And right, and that’s, that’s how we got around it. But that’s it’s been a number of years since we’ve had to have that situation. The Okay. noncompete. So, we talked about the COVID. What other things are, what other things are changing now that you see people dealing with?
Because we talked about COVID? We talked about the noncompetes, remote workers, the 1099 stuff? Are we seeing other compliance issues like it? Could you talk about one thing that was pretty interesting, and I think a lot of people deal with is the enforcement. Are you seeing that over all like the the tax or the these employment compliance are getting more aggressive? Because of could be that tax revenues are down?
Eric Sarver 38:40
I am, you know, I do I say more Department of Labor and with the Workers Compensation Board in different states, mainly just because I don’t really do tax loss, I usually refer my clients to one of my two colleagues might say, a tax lawyer or as a CPA combined. I do so I usually tactic just come up.
But if it’s actual real RS issue, I’m gonna refer to like the law in court, let’s say, you know, or Jack Solomon, are here in New York, in New York. But what I say is that I am seeing a much more aggressive push. Not only am I seeing the Department of Labor and come at people with random audits and with, you know, taking complaints very seriously and just kind of looking at the industry and to see if there’s any wrongdoing.
I’m actually seeing the Department of Labor pick up where they left off two, three years ago, before the pandemic. I mean, some really, oh, yes, I’ve had three clients in the last six months, wait eight months, whatever. Don’t say this is the first since September, since February. Where they they came to me and what is my client have had for like four years now Right? Or five years. I represented him in this situation probably later in 2018 and 19.
And then the trail kind of went blank on the issues of allege on pay Even wage overtime and causes obstruction, which was not even what happened but which very fast effect, they claim that he obstructed audit or domestic inquiry. And it wasn’t true and we had to, but the facts are, they sort of disappeared in 2019. And then COVID hit in March 2020. And the DOL Department of Labor got swamped with as you can imagine, unemployment insurance claims, you know, like unemployment, you know, all kinds of issue attacks left and right.
They lost workers, some people quit, some got sick, and some took off. And so they just lost sight of these things. They’re actually coming back to them with full force and gusto. And it’s really unbelievable, you think there’d be some sort of touch limitations? Right, you know, almost like prime Yeah. Right. You know, if you abandon your case, you can be, can be dismissed for that, you know, bad admin or prosecution, but the Department of Labor is not bound by that.
So I’ve seen situations where the, yeah, requires now a couple of them where, you know, and I remember saying, you ranked me April, and you write to my client certified mail, you’re, you’re assessing penalties for you know, $18,000, and you’re basing on this investigation, that I’m looking back at emails, letters, we haven’t talked in, you know, three years, and so someone’s comparable, and they say, you responded to by April 22. And it’s like, Hold on here, you know, you guys, whenever you and my clients had two weeks, don’t know. So we usually get, you know, more time to investigate and respond.
But, um, so I mentioned that, you know, if you’re a company out there, and I can only really speak for New York a lot, but if you’re, I think a lot of states are seeing this, my colleagues in other states, you know, in Florida and Illinois, you know, in Ohio and saying, you know, what’s going on here, so if you’re accompanying and you had an issue with Department of Labor and and it’s been on the on the on the sort of the back burner, you know, the shelf Don’t be so short over yet.
And I hate to say that in like a scary way, like a scary movie, you know, but just be diligent, make sure you know, you’re following the laws and have counsel help you out with these things.
Damon Pistulka 42:03
Yeah. That is really sell to because it’s a scary thought to think that you got it done and, and come back and come back comes back to haunt you.
Eric Sarver 42:14
Let’s just say the expression of knowing these is good news. Not sure what the Department of Labor, the Workers Compensation Board, you know, for most states, ya know, these things, you know, is they got too busy, and now they’re coming back, you know, to you and, yeah, and the clients know, that my clients, the employer, business owners are understandably pretty upset, because, you know, they’re thinking, oh, yeah, I gotta go back and revisit this.
I don’t even remember these, you know, like, we weren’t there, even though it was to store the records from 2018. You know, are you kidding me? You know, I’m a small business side, you know, your computer system that got trashed. Now, we have a new servers, and I don’t know, if I had the, you know, the schedules for, you know, 11 workers in 2020. That’s the challenge. You know, it’s a challenge. Yeah.
Damon Pistulka 42:57
Interesting. Interesting, because I think that, you know, we’re used to in business, if no, no news for a long time is, is, everything’s okay. And it’s not it’s not in that case. So that’s, that’s a good thing to know. All right. Well, Eric, it’s been awesome talking to you. And And now Now, I want to I want to also tell people you have here on talk radio NYC, where the show, what’s your show called? So we make sure everybody knows what it is? Sure.
Eric Sarver 43:31
My show is called employment law today. In fact, had an excellent guests. We could have a go talked about all these similar issues. Damon Pistulka. Ames on my show. I have the show aired on Tucker to NYC.
It airs on internet radio as the audio and the airs on Facebook Live usually at the station every Tuesday night, from 5pm to 6pm. Eastern Standard Time, I have guests talking about some of those novel issues and challenges, such as we’re just talking about tonight, perfect sample that employers and business owners face today.
So we talked about everything from inflation, to do it to the resignation to the four day workweek when we talk about tax issues and employee morale, employee culture. So I have guests each week. And you know, we have a great exchange. It’s an hour long show. It also does stream live on our weather streams on in, I should say Apple podcasts, Google place, Stitcher, Spotify, Amazon music as well. Yes.
Damon Pistulka 44:34
And that’s the thing I think really is awesome about what you’re doing, Eric, because you’re helping to educate business professionals about employment law and the other issues around it. And that’s, I felt fortunate to be on your show and I really enjoy your show from the standpoint of that the education that you’re giving the given the employers so they can they can figure some of this out and then just really understand make informed decisions.
You know, understand these things better so they can make informed decisions and figure out when it’s time to talk to a lawyer or when it’s time to talk to another professional because a lot of times the business owners are left guessing. And your educational efforts are really helping that. So, thanks so much for that. You have now, yes. Well, how can people get a hold of you if they want to talk to you because you’re you practice law in New York In New Jersey, correct.
Eric Sarver 45:25
I’m in New York, I’ve counseled a few New Jersey firms, so they can certainly practice their weaving and process but i That’s why I mentioned New Jersey, but I’m in New York. And for all intents and purposes, I can do New Jersey with my co counsel out there. So we’re good friends. Yeah. So New York, New Jersey. And how do people get ahold of me? You’re asking right? Yes. Great question. Well, so you can find me. My website is www dot Sarver SS and Sam AR V is in Victor er hyphen, law, a w.com The law is there it goes over and you can find me my email is em s.
So it’s like Eric Mitchell cyber EMS at Sarver law firm.com same spelling and it goes a call me you know best number is 917-930-8684 I’m happy to talk with you you know if you have an issue of compliance employment, business law contracts, what have you, you know, I had a big sauce up my heart for the small and medium business owner in various industries. So that’s how you can reach me David. Yeah.
Damon Pistulka 46:32
Awesome. Awesome. And you know, we got we glossed over your background love, I mean, you and help for over 20 years doing this. I mean, you you you’ve seen a lot you’ve been able to help a lot of people and I really, really appreciate you stopping by today Eric and and help us and, and for those of you that may be joined us late may have just got out we got Eric Sarver here from Sarver Law Group and practicing in New York, but he talked a lot about non competes for time.
We talked about remote workers in the in some of your challenges with that we talked about 1099 or even got into arbitration because I we just like that came up and what you were saying, but a lot of good stuff in here for people that are wondering about compliance and other things. So thanks so much for sharing your knowledge with us today, Eric.
Eric Sarver 47:24
My pleasure, Damon, a pleasure to be on the show. Thank you for having me on the show. I really appreciate it. Great to be here.
Damon Pistulka 47:29
Yeah, well, it’s a pleasure is ours. Thanks, everyone for listening. We will be back again next week with another awesome guest on the faces of business. So keep the questions coming, and we’ll keep the answers going as well. Have a great evening everyone. Have a great night.
Schedule a call to discuss your business goals and answer your questions on growing business value, preparing for sale or selling your business.