Webinar Recap | Make or Break for Overtime & Non-Competes

Our August webinar explored the future of new overtime regulations and the evolving landscape of noncompete agreements. Adams Keegan advisors Charles Rodriguez and Brandon Roland also discussed the shifting legal landscape of noncompete agreements and reviewed the latest developments in state-specific leave laws and what they mean for employers operating in multiple states.

Didn’t catch the conversation on August 28? Click here to view.

U.S. Department of Labor’s minimum salary rule
The U.S. Department of Labor (DOL) has been under scrutiny recently as the Fifth Circuit Court in Texas heard oral arguments on the validity of imposing a minimum salary requirement for executive, administrative, and professional exemptions. This ongoing case challenges the DOL's authority to require any salary level.

The argument is rooted in the fact that the Fair Labor Standards Act (FLSA) does not explicitly require a minimum salary level. The implications are significant, especially with the upcoming increase on January 1, 2025, where the minimum salary is set to rise to $1,128 per week. This underscores the need for employers to stay vigilant and adaptable as the legal landscape continues to evolve.

Federal Trade Commission’s rule on non-competes
In a parallel legal challenge, the Federal Trade Commission’s (FTC) rule on non-competes was set aside by the U.S. District Court for the Northern District of Texas. This decision has effectively blocked the regulation’s enforcement nationwide, as the court found it to be unreasonably overbroad and beyond the agency's authority. 

For employers, this means that non-competes remain enforceable, though they must be narrowly tailored to protect legitimate business interests without being punitive or overly restrictive. They should also be mindful of state laws, as several have their own regulations regarding non-competes, which may impose further limitations.

Tipped work and tip credit rule updates
The Fifth Circuit Court recently vacated the 2021 tip credit rule, often referred to as the "80/20 Rule," which previously limited the amount of time a tipped employee could spend on non-tip-producing work. The court pronounced that the FLSA allows the tip credit for any employee engaged in an occupation that customarily and regularly receives more than $30 a month in tips, regardless of the specific tasks performed. 

This simplifies compliance for employers, allowing them to apply the tip credit more broadly across occupations without worrying about time spent on non-tip-producing activities. However, they must remain cautious and consider state-specific statutes, as some may have stricter regulations.

Social media and workplace harassment
With the rise of online platforms, the potential for harassment outside of traditional work settings has amplified. Employers must address this issue proactively by establishing clear social media policies that outline acceptable behavior and the consequences of misconduct. This includes addressing harassment that occurs outside of the workplace but affects the work environment. By creating a culture of respect and enforcing policies consistently, employers can mitigate the risks associated with social media and protect their employees from harassment.

Tune in to the full discussion and give yourself about 30 minutes to become fully immersed in the conversation.