Sophia is a student at Harvard Law School and a member of the Labor and Employment Lab.
In today’s news and commentary, the Michigan Supreme Court grants heightened judicial scrutiny over employment contracts that shorten the limitations period for filing civil rights claims; the California Labor Commission gains new enforcement power over tip theft; and a new Florida law further empowers employers using noncompete agreements.
Michigan law grants workers a three-year limitations period to bring a civil rights claim against their employer. However, some employers deploy a boilerplate employment contract that shortens that window to just six months. On Thursday, in a 5-1 opinion in the case of Rayford v. American House Roseville I LLC, the Michigan Supreme Court held that a boilerplate employment agreement that shortens the statute of limitations period for civil rights claims below three years must be reviewed by judges for reasonableness in addition to unconscionability. The state court also noted that an adhesion contract — a contract where the parties are of such disproportionate bargaining power that the weaker party could not have negotiated changes to the terms — may be procedurally and substantively unconscionable. The decision is a win for workers across the state who feel forced to sign unreasonable employment contracts in order to make a living.
On Wednesday, California Governor Gavin Newsom signed SB 648 into law, which authorizes the State Labor Commissioner to investigate and issue a citation or file a civil action against any employer found guilty of withholding or taking their workers’ tips. Before SB 648 employees were only able to pursue lengthy civil court actions to recuperate stolen gratuities even though Section 351 of the California Labor Code declared “[e]very gratuity” to be the “sole property” of the worker who received the tip. The state labor commission’s new enforcement power over tip theft under SB 648 will hopefully deter employers from violating the law and help workers avoid lengthy and draining litigation.
Florida lawmakers passed the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act, which went into effect on July 1. Under the new law, Florida employers may now restrict their former employees and independent contractors from working for a competitor for up to four years by issuing a covered garden leave agreement or a covered noncompete agreement. The CHOICE Act establishes that these two types of covered agreements are not restraints of trade or attempts to monopolize commerce and even more notably, requires a court to issue a preliminary injunction upon a covered employer’s motion seeking enforcement of an agreement. To get a preliminary injunction, a covered employer no longer has to show that it has a legitimate business interest to protect, that the former employee disclosed confidential information, or that the employer will suffer irreparable harm absent an injunction. This law empowers Florida employers to win preliminary injunctions against former employees on an allegation of breach of a covered agreement alone.
Daily News & Commentary
Start your day with our roundup of the latest labor developments. See all
October 31
DHS ends work permit renewal grace period; Starbucks strike authorization vote; captive-audience ban case appeal
October 30
Sweden’s Tesla strike enters its third year; Seattle rideshare drivers protest Waymo’s expansion in the city.
October 29
9th Circuit rejects challenge to NLRB's constitutional structure; preemption challenges to state labor peace statutes
October 28
Two federal unions oppose CBA cancellations, another federal union urges Democrats to end the government shut down, and Paramount plans for mass layoffs
October 27
GM and Rivian announce layoffs; Boeing workers reject contract offer.
October 26
California labor unions back Proposition 50; Harvard University officials challenge a union rally; and workers at Boeing prepare to vote on the company’s fifth contract proposal.