This article was published in the Association of Corporate Counsel's Charlotte newsletter.
A phenomenon hit employers across the American economy in 2021: unprecedented levels of employee resignations. During the so-called “Big Quit,” over 4 million employees have been quitting their jobs each month. With 10.9 million current job openings and a 3.8% unemployment rate, retaining and replacing talent is suddenly a significant challenge.
We have identified three key issues emerging from this trend and new strategies adopted by employers to attract and retain workers.
Flexible Working Arrangements
After adapting to remote work by necessity during the COVID-19 pandemic, many employees now place value on having flexible or hybrid working arrangements. We have seen numerous companies adopt flexible and hybrid arrangements as a permanent part of their workplace. Such arrangements have legal ramifications. Employers should emphasize and enforce precise timekeeping by nonexempt remote workers to avoid potential claims of failure to pay overtime and “off the clock” work under the Fair Labor Standards Act. Remote workers located out of state could create a taxable nexus in a different state for the employer. Finally, even those employers who do not allow remote work must still consider whether telework may be a reasonable accommodation for employees with disabilities.
Employer vaccine mandates have been controversial for employees, with many strongly in favor and opposed. With the exception of employers covered by a federal or state vaccine requirement (like the Centers for Medicare and Medicaid Services regulation), each company has the flexibility to adopt a policy that is best suited for its workplace. Given the loosening of COVID-19-related restrictions at both the federal and state level, many employers have decided to relax their vaccination policies. Transitioning to a voluntary vaccination policy removes the administrative burden of evaluating exemption requests and alienating employees and candidates.
The current labor market presents a prime opportunity for companies to recruit talent from their competitors. Hiring companies should be careful to confirm whether job candidates are bound by restrictive covenants with their previous employers and ensure new hires do not bring confidential information from their former employer. Otherwise, employers may face costly claims for tortious interference or misappropriation of trade secrets from their competitors. One of the easiest strategies to protect against this risk is to have new employees sign an acknowledgment certifying that they have disclosed all restrictive covenants and will abide thereby. Likewise, when employees resign, companies should ensure that they return company property and information promptly and are reminded of any restrictive covenants to which they are bound.
Employers also might consider protecting key relationships and confidential information by having key employees sign restrictive covenants. The law regarding the validity of a restrictive covenant varies considerably between states and over time, so in-house counsel should ensure that such agreements are up-to-date and comply with the law of any relevant state.
For more on how employers can manage the changing workplace, click here for a replay on Best Practices for Hiring & Performance Management During the "Great Resignation."
Tory Summey is a partner in Parker Poe’s Employment Practice Group providing employment counseling and litigation. On the counseling front, he helps employers navigate complex and ever-changing federal and state laws and regulations, including those related to the coronavirus pandemic.