Connecticut Labor and Employment Law Journal

Connecticut Labor and Employment Law Journal

Representing Employers

New Law Overhauls Connecticut’s Treatment of Physician Non-Competes

Posted in Employer Policies

Connecticut employers will soon be rather limited in their options to enter into “non-compete” agreements with physicians.  Public Act 16-95, An Act Concerning Matters Affecting Physicians and Hospitals, makes numerous changes affecting physicians and hospitals.  The new legislation dramatically changes the law pertaining to covenants not to compete involving physicians.  This portion of the legislation is effective July 1, 2016.  The new legislation makes it so difficult to enforce a non-compete against a physician that some employers are likely to abandon their restrictive covenants altogether.

The new law applies to agreements that restrict the right of a licensed physician to practice medicine in any geographic area of the state for any period of time.”  Covenants not to compete are void and unenforceable to the extent they exceed the provisions of this new statute.  Remaining contract provisions remain in full force and effect.  A covenant not to compete is also void if the employment or contractual relationship is terminated without good cause or the contract or agreement expires.  (Note that the reference to “employment or contractual relationship” indicates that independent contractors would also be covered by this statute.)

As is standard for covenants not to compete, the statute prescribes that a covenant not to compete is valid only if:

  • The covenant not to compete is necessary to protect a legitimate business interest;
  • the geographic, time and other provisions of the covenant are necessary to protect such business interest; and
  • the covenant not to compete is otherwise reasonable and not contrary to public policy.

Importantly, the statute prohibits covenants not to compete that “restrict the physician’s competitive activities (i) for a period of more than one year, or (ii) in a geographic region of more than fifteen miles from the primary site where such physician practices.”  The “primary site where a physician practices” is defined as “the office, facility or location where a majority of the revenue derived from such physician’s services is generated.”

The law also limits the available remedies by explicitly prohibiting injunctive relief or specific enforcement, a common means of enforcing non-competition agreement.  Instead, an aggrieved party may bring an action for damages, subject to neutral binding arbitration by a court-appointed arbitrator.  Damages are limited to actual damages suffered.  Further, the party seeking enforcement has the burden of proof, not just by a preponderance of the evidence, but by clear and convincing evidence: (1) that the covenant not to compete conforms to the requirements of this section, (2) that the covenant not to compete has been violated, and (3) the actual damages suffered.  In addition, the bill states that the costs of the action shall be borne by the party bringing the action.

In light of the new legislation, all employers of physicians and physician-owned practices in Connecticut should carefully review the terms of their non-competition agreements, including “boilerplate” language.  Further, consider keeping the term of the non-competition agreement less than one year or the radius at issue less than fifteen miles, avoiding the maximum restrictions, since the employer will be required to show by clear and convincing evidence that “the geographic, time and other provisions of the covenant are necessary” and defaulting to the maximum is likely not going to show a court that the provisions are truly necessary.

To the extent other restrictions, like non-solicitation, exist in the same agreement alongside non-competition language, be sure to apply these restrictive new terms only to the non-competition language; otherwise, employers are yielding even more rights.

The legal landscape is changing rapidly, and our team of labor and employment attorneys can help you navigate new and existing statutory requirements and can help you customize employment agreements and restrictive covenants to meet your unique needs.

Major Overtime Rule Change Effective December 1 – What You Need To Know To Prepare Now

Posted in Wage & Hour

The U.S. Department of Labor just issued its final rule, requiring minimum wage and overtime for some employees who are currently “exempt” from these requirements. Employers need to plan ahead for implementation, as the rule change could lead to seismic shifts in some payrolls.

The federal Fair Labor Standards Act (“FLSA”) requires that employees receive minimum wage and overtime (calculated at one-and-a-half times the regular rate of pay for hours over 40) unless they are “exempt” from one or both requirements. The most popular exemptions are the so-called “white collar exemptions,” which apply to executive, administrative, and professional employees who meet rigorous criteria based on their duties. To be exempt, these employees must be paid a salary of at least $455 per week and the employer must pay on a salary basis (meaning no docking for partial workweeks, subject to limited exceptions). Doctors, lawyers, and teachers can be exempt under the FLSA even if they are not paid on a salary basis and there is no minimum salary for these employees. (The computer professional exemption has special rules under which employees can be paid hourly, but in any event, there is no computer professional exemption under Connecticut state law.)

The rule change more than doubles the salary threshold from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). Further, these thresholds will be subject to inflationary increases every three years. Nondiscretionary bonuses and incentive payments (including commissions) may account for up to 10 percent of the minimum salary level. By contrast, discretionary bonuses do not count toward the minimum salary level.  The duties tests are not changing under this rule. The threshold for the “highly compensated employee” exemption increases from $100,000 to $134,004, but Connecticut does not recognize this exemption, so employers should not rely upon it for employees in the state.

Raising the salary threshold is expected to transform millions of exempt employees into non-exempt employees overnight. Some employers will be able to weather this change better than others. Virtually every employer in the country is subject to the FLSA, even if there is only one employee. This includes non-profits and public sector employers. In Connecticut, where the cost of living is high, the effect of this change may be lower than elsewhere in the country. It is more likely here than elsewhere that employees who meet the duties tests are already earning at least $913 per week. However, non-profit, low-profit, and government employers may find that many of their employees are subject to this rule change and these employers may have more rigid budgets that cannot withstand the impact. Employers with an annual volume of sales or business of less than $500,000 may wish to consult an employment lawyer to see if they are one of the very few employers not subject to the FLSA.

To comply with the rule, employers need to either raise salaries of affected employees to ensure they meet the threshold or begin treating these employees as non-exempt. Raising salaries is straightforward, but remember that the rule is likely to require inflationary increases, so the amount will change going forward. If employers do not wish to raise salaries, the employees must be treated as non-exempt. This means that employers must keep records of their hours worked and they must be paid overtime for hours over 40. It is legally permissible to cap hours at 40 by prohibiting employees from working overtime and some employers may choose to hire multiple employees to do what was once one employee’s job. Collective bargaining agreements may limit employers’ options.

It cannot be overstated how important it is to ensure that employees are properly exempted if they are not going to be paid overtime. Consider the following scenario. A passionate, well educated executive director of a nonprofit organization earns a salary of $912 per week – just one dollar short of the new threshold. She labors with love, working 70 hours most weeks. A disgruntled employee complains to the Department of Labor that he is owed overtime and the agency examines the payroll practices of the entire organization. The Department of Labor finds that the executive director is not exempt. It is not that she is underpaid by fifty-two dollars. It is that she is not exempt at all. She is owed unpaid overtime of more than $20,000 (more if the salary was only intended to cover a certain number of hours) all because she was paid one dollar per week too little to qualify as exempt.  She would likely also be eligible for liquidated damages, doubling the underlying liability. (There are some arguments an employer could make to apply more favorable damages calculations, but these arguments have yet to be successful in the Second Circuit.) That is the legal significance of the salary threshold and why employers must be extremely careful. For that matter, when considering the duties tests as well, employers should recognize how a small mistake in classifying an employee or a group of employees could add up to huge liability.

Employers should take time now to review their payroll practices to ensure they are in compliance with state and federal laws now and in the future. For each employee believed to be exempt, ensure that he or she meets the duties tests for the applicable exemption, is paid on a salary if required by the exemption, and is paid a salary that is high enough to support the exemption. In considering the duties of a position, employers should be concerned not with titles or job descriptions, but with how the employee actually spends his or her time. It is a good idea to update job descriptions to match reality.

Ensure that all non-exempt employees’ hours are being tracked, including time spent offsite performing work, on call, or traveling, to the extent required by law. Ensure that break periods of fewer than 20 minutes are treated as working time.

Now is a good time to change payroll practices without raising alarm that perhaps things were not done properly before. Employers can connect changes with the new overtime rule to minimize suspicion, particularly in cases of misclassification. Internal review of payroll practices should be aided by a competent labor and employment attorney, as the rules can be excruciatingly detailed. Using non-attorney human resource consultants or payroll companies for this activity is not advised, as communications will not be privileged. Changes to payroll practices, hours, or other terms or conditions of employment should be communicated to employees well in advance, ideally at least 30 days.

Our team of labor and employment attorneys can assist employers in adjusting to the new white-collar exemption requirements and ensuring compliance with all applicable labor and employment laws.  Contact us to arrange a wage-and-hour self-audit for your organization.

Public Sector Unions Dodge A Bullet With Friedrich’s Decision

Posted in Municipal Labor

A much anticipated decision was released last week in which the U.S. Supreme Court was deadlocked (4 to 4) on a challenge to so called “service fees” charged to employees who opt out of union membership.  The lawsuit was based upon a lawsuit brought by a number of California teachers who objected to being required to pay the fee (typically almost the same cost as union dues) if they chose not to join the union.  While the plaintiffs have announced their intent to request re-argument once a new justice is appointed replacing deceased Justice Antonin Scalia, for now the decision stands, meaning public sector unions may continue to require that non-members pay a “service fee” in states that allow it, including Connecticut.

Connecticut Supreme Court Bolsters Employee Free Speech Claim

Posted in Employer Policies

In a decision that marks a clear departure from national case law, the Connecticut Supreme Court recently expanded the protection of employees who speak out against their employers.

In Trusz v. UBS Realty Investors the Connecticut Supreme Court rejected the standard set by the U.S. Supreme Court as to the U.S. Constitution, ruling, in effect, that the state constitution affords Connecticut employees broader protection than federal law.  In a case called Garcetti v. Ceballos, the U.S. Supreme Court had ruled that employee statements made as part of their official duties were not protected.  In Trusz the Connecticut Supreme Court rejected that exception as to the Connecticut Constitution.

As such, even statements made by an employee as part of their official duties may be protected under Connecticut law assuming the other requirements for bringing a free speech claim are met, e.g. it must be a matter of public (not private) concern.  This means that as compared to other employers throughout the rest of the Country, a Connecticut employer has less latitude to discipline an employee who speaks out against their employer, even if the statements are associated with their regular job duties.  Connecticut employers seeking to discipline an employee for speaking out against them should think twice and consult with counsel before doing so.

Reminder – Connecticut Minimum Wage Rises to $9.60 on January 1

Posted in Wage & Hour

Connecticut employers must begin paying $9.60 per hour to their employees on January 1, 2016 as part of legislation designed to raise the state minimum wage to $10.10 per hour by 2017.  For restaurant waitstaff who receive sufficient gratuities, the employer must pay $7.82 per hour under the new minimum wage, but the employee must still make at least $9.60 per hour including tips and employers must follow recordkeeping and reporting obligations related to the tip credit.

Employers must also update their workplace posters to ensure they reflect the new minimum wage.  The posters are available from the Connecticut Department of Labor at

Our team of labor and employment attorneys can assist employers in adjusting to the new minimum wage requirements and ensuring compliance with all applicable labor and employment laws.

Are Your Employees Saving for Retirement? The Conversation You Should be Having

Posted in Employee Benefits

As an employer, you’ve worked hard to put together an attractive benefits package – vacation, insurance, retirement benefits, and maybe even some unusual perks.  But many benefits go unutilized or underutilized, and retirement benefits requiring employee involvement are no exception.  As defined benefit plans – pension plans that provide a set amount of income in retirement – are on life support due to economic factors, most private employers have turned to defined contribution plans (such as 401(k) plans) as an alternative, and many public employers are following suit.  A defined contribution plan is one in which a certain amount or percentage of money is set aside each year by an employer for the benefit of the employee, but how much the employee gets in retirement is determined by market forces.  For employees to have a secure retirement on a defined contribution plan, they need to decide early that they will participate, save early, and invest wisely.  Employers can – and often should – encourage employees to make the most of this benefit so employees and their families are more likely to have their money last in retirement.

Retirement planning should be a matter of attention for employees at any age.  Millennials are entering the workforce in larger numbers, often saddled with crippling student loan debt and struggling to live independently and start families.  These employees may feel they have the least opportunity and incentive to save – their earnings are at the low end of the spectrum due to inexperience and retirement is decades off.  But employers can talk to millennials about the importance of developing a habit for saving and the exponential benefits of compound interest.  Mid-career employees have higher incomes, but may be paying off mortgages and putting children through college.  Employers can encourage these employees to consult with a financial planner (sometimes available as part of the 401(k) plan) to discuss balancing these demands and adjusting their investment portfolios to take on the right amount of risk for their life situations.  As employees near the end of their careers, employers may want to remind them that federal law allows those age 50 and over to make “catch-up contributions” to ramp up their savings.  Employers should steer clear of exerting pressure on employees or offering specific investment advice.

Having the retirement conversation can be beneficial for employees and employers alike.  Employers have the opportunity to show their employees that they care about their long-term financial wellbeing and that they are engaged in helping them succeed.  Financial pressures are a major source of stress for employees, so helping them succeed in this area may lead to a healthier and more productive workforce.  If you match employee contributions or offer profit-sharing contributions, make sure to remind employees of this valuable benefit.  A word of caution to those with employees earning around minimum wage or engaged in wage disputes – employees may not take kindly to such shows of concern if they feel they are underpaid or are not paid enough to afford today, much less the future.  Employers should also take care to avoid coming across as paternalistic.  Finally, employers should avoid stereotyping or making assumptions when speaking with employees.  For example, it would be unwise to assume that an older employee with no children has no financial demands and is therefore prepared for retirement.

What if you do not currently offer a retirement plan and cannot or choose not to do so?  Employees can still contribute to individual retirement accounts (IRAs) provided they meet federal eligibility requirements.  In addition, a new federal retirement account called the myRA is available to those without access to a retirement plan at work and can be funded through payroll deductions.  The myRA has no fees, is easy to understand, and carries no risk of loss.  A limitation to the myRA is that while it functions well as a starter account, it is unlikely to be enough for employees to retire in comfort as there are no participant options for investments and the elimination of risk means these investments are not designed for significant growth.  Balance caps provide another limitation, although many employees will become eligible for employer-sponsored plans long before reaching those caps.  Therefore, the myRA may be a good option for employees who value security over growth.  The myRA is a new option designed to deal with an epidemic of inadequate retirement savings.  States are tackling this problem as well.  Connecticut is exploring a program to mandate that most employers offer retirement plans, so employers should stay tuned for new developments.

Employers can help employees become aware of their options when it comes to retirement to help solve this national crisis while boosting employee relations at the same time.  This is an opportunity that should not go to waste.

Rebecca Goldberg, an Associate at Berchem, Moses & Devlin, P.C., is a labor and employment attorney advising employers on all aspects of the employment relationship.  She regularly advises small to large businesses with everyday human resources questions and concerns, providing clients with cost-effective ways to avoid litigation exposure.  She can be reached at 203-882-4105 or


Christopher Sugar Honored at Westfair Communications’ First Annual “Milli” Awards Ceremony at Chelsea Piers

Posted in Uncategorized

Pictured are Honoree Christopher Sugar (left) with Associate Rebecca Goldberg (center) and Senior Partner Floyd Dugas (right) from Berchem, Moses & Devlin P.C.’s Labor and Employment Law Department at the Milli Awards

Millennials in Fairfield and Westchester counties are running their own businesses, making an impact through volunteer work and contributing innovative ideas to transform companies. Westfair Communications celebrated 22 young professionals ages 21 to 34 at the first Milli Awards on Nov. 17 at Chelsea Piers Connecticut in Stamford. Congratulations to Berchem, Moses & Devlin P.C.’s award winner, Chris Sugar!

Chris Sugar is a highly accomplished attorney who is already a leader in his field at the age of 34. He practices in the areas of labor and employment law; litigation; and alternative dispute resolution, with an emphasis on organization, collective bargaining, grievance arbitration and labor and employment disputes. Chris has developed extensive experience representing large Connecticut municipalities, boards of education and housing authorities during labor arbitrations and unfair labor practice proceedings including before the Connecticut State Board of Mediation and Arbitration, the Connecticut State Board of Labor Relations, the Department of Labor, and the Board of Review. He has experience defending a variety of employers against administrative charges and judicial proceedings alleging discrimination and retaliation including before the Commission on Human Rights and Opportunities and the Equal Employment Opportunity Commission. Chris also defends appeals brought under Connecticut’s Freedom of Information Act.

Part of what makes Chris so successful is his effectiveness using social media to inform people about important changes and updates in the law, an area that many older lawyers are afraid to venture into. He has his own Twitter account,, where he communicates regularly with clients, other attorneys, and people who are seeking information about issues they are interested in relating to labor and employment law. Chris also contributes to this blog regularly.

Chris Sugar is a leader in his field. He was recently appointed to the Education Law Executive Committee of the Connecticut Bar Association (CBA), and has been the Chair of the Bridgeport Bar Association Young Lawyers Section since 2013. He volunteers through the CBA’s Young Lawyers Section by reading to elementary school students in the Bridgeport school system every year. He is also deeply involved with homeless advocacy. Chris is a true Millennial Hero!

Click here to read a recent article about the Milli Awards, printed in the Fairfield County Business Journal and Westchester County Business Journal.

Portion of Affordable Care Act Requiring Automatic Enrollment for Some Employer Plans Repealed

Posted in Employee Benefits, Employer Policies

Since the Affordable Care Act’s enactment in March, 2010, employers with 200+ employees have been awaiting the implementation of regulations that would explain the automatic enrollment rule.  Employers with 200+ employees would have had to enroll employees in the company health care plan automatically, while allowing them the option to decline coverage.  Most employer plans work the opposite way – employees must affirmatively elect to participate.  On November 2, 2015, President Obama signed into law a bill that eliminated this requirement for employers.  Employers may, however, choose to automatically enroll employees (subject to state laws governing payroll deductions).  The repeal of this provision of the Affordable Care Act simplifies the administrative process for employers and ensures that employees do not end up with unwanted and/or duplicative health benefits by virtue of their failure to opt out.

Our team of labor and employment attorneys can assist you in designing legally compliant employee benefit plans and other labor and employment law compliance issues

Connecticut Mandates Sexual Harassment Training for Supervisors – Are You in Compliance?

Posted in Employer Policies

Employers with 50 or more employees in Connecticut must provide sexual harassment training to supervisors within six months of the individual assuming a supervisory position.  While other employers are not mandated to provide such training, it is strongly encouraged to do so. Refresher training is encouraged, but not required.  It is also beneficial to provide sexual harassment training to non-supervisory employees, although the content of the training should be tailored to the audience.  Supervisory employees should be told the extent of liability that may be incurred by the employer for successful harassment claims; employers probably do not want to instruct rank-and-file employees how to sue and collect significant damages.

Regulations of the Connecticut Commission of Human Rights and Opportunities require that the sexual harassment training contain certain specific elements.  Therefore, it is best to have a Connecticut employment attorney provide the training, rather than purchasing a generic training program.

Employers may also wish to include content on other types of harassment (such as harassment based on age, race, disability, or religion) and bullying, either as part of the training or as a separate program.  Unfortunately, bullying is a problem in many workplaces.  While it is harder for an employee to successfully sue an employer for bullying or harassment that is not based on a legally protected status, such conduct creates a significant drain on employers due to poor morale, the need to investigate and respond to complaints, and increased absenteeism.  Recently, our practice has seen a rash of requests for leave under the Family and Medical Leave Act and reasonable accommodations under the Americans with Disabilities Act for anxiety and post-traumatic stress disorder purportedly stemming from workplace interactions.

Everyone benefits when the workplace is a civil and safe place to be.  Employers should be sure to meet and preferably exceed the training requirements imposed by law.

Our team of labor and employment attorneys offers training on all topics affecting the workplace and can help customize programs to meet your unique needs.

Two Significant Changes to Law Surrounding Internships

Posted in Employer Policies, Wage & Hour

Connecticut employers need to be aware of two significant changes in the law surrounding internships.

The first is a new state statute including unpaid interns in the protections afforded to employees with respect to discrimination and harassment. Employers should update their handbooks and training materials to ensure that interns receive the same protections as employees with respect to discrimination and harassment.  They should also ensure that internship opportunities are not advertised in a manner that would discriminate against members of protected classes.  (Last year, the New York City Council made a similar amendment to the New York City Human Rights Law.)

The second change is the recent Second Circuit decision in Glatt v. Fox Searchlight Pictures.  This decision makes it easier for for-profit employers to meet the requirements for an intern to be unpaid.  The U.S. Department of Labor has taken the position that an intern may only be unpaid when all parts of a six-part test are met.  The Second Circuit held that this test should be replaced with a more flexible “primary beneficiary test” to assess whether the intern or the employer is the primary beneficiary of the relationship.  The Second Circuit then provided a list of seven non-exhaustive considerations that should be applied by “weighing and balancing all of the circumstances.”  In other words, the test provides some guidelines, but it is not necessary for all of the factors to be met in order for an intern to be unpaid and courts may consider other relevant evidence as appropriate.  The factors are:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands‐on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The Second Circuit’s decision covers New York, Connecticut, and Vermont.  Employers in other jurisdictions are subject to decisions within their jurisdictions and/or the Department of Labor’s six-part test.  Also, until the Second Circuit’s factors are used in more decisions allowing for some level of predictability of outcome, employers should take a conservative approach when determining whether interns must be paid.  If in doubt, paying the intern at least minimum wage and complying with all applicable employment laws is the safest course of action.

While employers must still remain wary about hiring unpaid interns, the Second Circuit decision enhances the options available to employers who desire to use interns.  The new Connecticut statute, while creating a new avenue of liability for employers, is unlikely to have a significant impact on employers’ practices.   Our team of labor and employment attorneys can assist you in reviewing these issues to ensure your use of interns is legal.