We would like to inform you about a verdict obtained by our law firm on November 27th for the multinational company Alcoa who was sued by its European Works Council (hereafter: EWC) in connection with envisaged redundancies at two factories in Spain. The case was handled by our Dutch employment team.

This is the first judgment in the Netherlands on the concurrence of European and national employee consultation for transnational matters.

Alcoa (company producing aluminum) had started a consultation process with its EWC and the Spanish works councils simultaneously in connection with a possible collective redundancy of its employees (approximately 700) from two locations in Spain.

The EWC sued Alcoa and considered that the decision to close the Spanish locations had already been taken and that, as a result, the consultation obligation had also been breached since its advice would no longer have any weight. The central question was whether a decision has already been taken, and when the EWC should be consulted. The court ruled in Alcoa’s favor because it did not breach the consultation obligations by running the European and Spanish consultations in parallel and the court concluded that there was no proof that the decision to close the two locations had been taken.

A summary of the main legal considerations is given below:

  • The Dutch European Works Councils Act must be interpreted in accordance with Directive 2009/38/EC. The Directive concerns the information to and consultation of employees, which is implemented through a EWC. The information and consultation obligation applies to matters of a transnational nature (Dutch law refers to cross-border matters). The judge considers it sufficiently plausible that a cross-border case exists because of the large number of employees (20%) that are likely to be made redundant and the influence it is likely to have on the Shared Service Center in Hungary. Besides that, Alcoa has informed the EWC itself of the intention and it therefore seems that Alcoa itself also assumes that there is a cross-border case.
  • The Judge has established that there is no objective evidence that the decision to close the two Spanish establishments has already been taken. No written evidence to this effect has been submitted, nor has the EWC claimed that Alcoa orally stated this. It is not important in this respect that Alcoa has now started a consultation process with Spanish trade unions and employee representative bodies. It cannot be assumed that Alcoa has violated its legal obligation to inform and consult the EWC in good time. The EWC has also not disputed that various consultations have taken place with it in in the meantime.
  • Alcoa is not obliged to consult the EWC before entering into consultation with the EWC and trade unions. The EWC’s reliance on the Dutch Collective Dismissal Notification Act is incorrect. The trade unions must be informed in good time. Nor does it follow from the EWC agreement that the EWC must be consulted first, nor does the Directive stipulate this. Finally, the court considered that the consultation in Spain is intended for national matters and that the consultation with the EWC is intended for national matters of a cross-border nature. Therefore, there can be no coordination problems.
  • Because the EWC cannot be ordered to pay the costs of the proceedings, the Court will compensate the costs of the proceedings in the sense that each of the parties shall bear the costs of the proceedings.

Do not hesitate to contact us if you have any questions. We will be happy to explain the considerations of the Court of Rotterdam or put you in contact with our Dutch colleagues.

Effective December 31, 2018 the minimum wage will rise across New York. The new minimum wage will vary depending on the location and, in New York City, the size of the business. In order for exempt employees to remain exempt into the new year, employers will need to ensure that their annual salaries meet the new required minimum salary threshold.

Beginning December 31, 2018, the following minimum wages are in effect:

Hourly Employees:

Employers outside of Nassau, Suffolk and Westchester counties or NYC $11.10 per hour
Nassau, Suffolk and Westchester employers $12.00 per hour
New York City employers with 10 or fewer employees $13.50 per hour
New York City employers with 11 or more employees $15.00 per hour

Salaried Employees:

Employers outside of Nassau, Suffolk and Westchester counties or NYC

$832 per week

$43,264 annually

Nassau, Suffolk and Westchester employers

$900 per week

$46,800 annually

New York City employers with 10 or fewer employees

$1,012.50 per week

$42,650 annually

New York City employers with 11 or more employees

$1,125 per week

$58,500 annually

Because overtime exemption is analyzed on the basis of workweeks, rather than years, salary increases must conform to the new requirements by the first day of the workweek in which December 31, 2018 falls. Non-compliant employers risk losing the exemption for that workweek, and may be subject to penalties from local, state or federal authorities.  Employers may not count an employee’s nondiscretionary bonuses, incentive payments, or commissions towards their salary to reach the minimum.

Remember, under New York’s Wage Theft Prevention Act (“WTPA”), employers are required to give written notices to each new hire with the following information:

  • Rate or rates of pay, including overtime rate of pay if applicable;
  • How the employee is paid (hourly, per shift, daily, weekly, by commission, etc.);
  • Regular payday;
  • Official name of the employer and any other names used for business;
  • Address and phone number of the employer’s main office or principal location;
  • Allowances taken as part of the minimum wage (tip, meal, and lodging deductions); and
  • The notice must be in English and in the employee’s primary language if the Department of Labor offers a translation

If any of the above data changes, employers must give the employee a week’s notice, unless the employee’s new paystub carries the notice. However, employers must notify an employee in writing before reducing his or her wage rate.  Employers in the hospitality industry must give notice every time an employee’s wage rate changes.


Effectively immediately, employers who perform background checks on applicants or employees using third party consumer reporting agencies (these background checks are known as “consumer reports”) need to update their background check paperwork under the Fair Credit Reporting Act (“FCRA”) by replacing their old “Summary of Your Rights Under the Fair Credit Reporting Act” forms with a new, revised version, available here. The new version of the form includes information regarding an individual’s right to obtain a security freeze or fraud alert on his or her credit report, consistent with recent amendments to the FCRA.

As background, the FCRA imposes a number of technical requirements on employers and consumer reporting agencies that must be satisfied in order to lawfully obtain a consumer report, including providing an appropriate disclosure and obtaining authorization from the employee or applicant before the consumer report is obtained. The FCRA also imposes certain notice requirements before taking adverse action against an applicant or employee based on a consumer report. Full compliance with these technical requirements is important, as technical FCRA violations can sometimes serve as fertile ground for class actions.

One of the FCRA’s notice requirements is that employees and applicants must be provided with a form entitled “Summary of Your Rights Under the Fair Credit Reporting Act” on certain occasions, including before taking adverse action based on material obtained from a consumer report, or before obtaining an “investigative consumer report,” which is a consumer report which includes information obtained from personal interviews conducted by a consumer reporting agency. Last month, the Consumer Financial Protection Bureau updated this form, and employers and consumer reporting agencies must immediately begin using the newly-revised form or, temporarily, may continue using the old forms but include a separate page in the transmittal of the old form which includes additional information regarding security freezes.

Employers should keep in mind that state law may impose additional requirements. For more information about compliance with the FCRA (or relevant state law) as it applies to background checks or for any other employment matter impacting your business, please contact the authors of this article or the attorney with whom you regularly at Hogan Lovells.

Earlier this week, the New York Governor’s office finalized materials for New York State employers to implement sexual harassment policies and training.  While draft guidance was circulated to the public in August 2018, the finalized policies have some noticeable differences.  Of immediate interest is the extension that employers received to implement their first mandatory anti-harassment training from January 1, 2019 to October 9, 2019, giving employers who were scrambling to conduct a training 10 more months to do so.

Some other noteworthy differences include:

  • Modification of the definition of “sexual harassment” to prohibit harassment against individuals’ “self-identified or perceived sex, [or] gender expression”
  • Removal of language in the model policy language and the model training program that employers must have a “zero tolerance” policy toward harassment
  • Insertion of language that investigations should begin immediately and be kept “confidential to the extent possible”
  • Removal of language in the model training program that investigations should be concluded within 30 days, instead stating that the investigations should be completed “as soon as possible”

The State’s website contains a model sexual harassment policy, model training materials, a model complaint form, and frequently asked questions.

Employers do not have a duty to use the model policies and training, but must be sure that the training and policies are, at a minimum, compliant with the State’s materials.

Hogan Lovells’ employment attorneys have plenty of experience crafting policies and providing sexual harassment training in New York, and are available to help employers take the steps necessary to comply with New York’s new requirements.


The U.S. Department of Labor’s Wage and Hour Division (WHD) issued new FMLA medical certification and notice forms on September 4, 2018.  The forms are available here.  The new forms are substantively identical to the agency’s previous (now expired) forms, but they include the new expiration date—August 31, 2021—in the upper right hand corner.  Employers who use the government forms should start using the new forms, with the new expiration date, immediately.  Employers who use their own customized forms—for example, forms providing notices required under state or local leave laws such as the DCFMLA, or  forms tailored to the employer’s own policies—need not alter the content of their forms in light of the new federal forms, assuming the employer’s customized forms were otherwise compliant, given that WHD did not make substantive changes.

The State of New York recently issued draft guidance for employers regarding the anti-sexual harassment legislation passed earlier this year. As we previously reported, effective October 9, 2018, all New York employers must either adopt or create a policy that equals or exceeds the State’s model policy and training program. On August 23, 2018, the State released its model policy and a set of minimum standards that an employer must meet or exceed if it chooses not to adopt the model policy. A few of the key standards require that an employer’s policy include:

  • Examples of prohibited conduct that would constitute unlawful sexual harassment;
  • A procedure for the timely and confidential investigation of complaints that ensures due process for all parties;
  • A complaint form; and
  • Language that informs employees of their rights and all available forums for adjudicating sexual harassment complaints administratively and judicially.

The State also released its model training script and a set of minimum standards that an employer must meet or exceed if it chooses not to directly follow the model. Notable guidelines require that the training must:

  • Be interactive;
  • Include examples of conduct that would constitute unlawful sexual harassment; and
  • Include information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims of sexual harassment.

Additionally, the Frequently Asked Questions section of the State’s guidelines clarifies that to meet the “interactive” element required by the law, a training may: (1) be web-based with questions asked of employees; (2) accommodate questions asked by employees; (3) include a live trainer made available during the training to answer questions; and/or (4) require feedback from employees about the training and materials presented.

The Labor and Employment Team at Hogan Lovells has extensive experience providing interactive anti-harassment training, and developing anti-harassment policies and complaint procedures. For assistance with complying with these new guidelines or for any other employment matter impacting your business, please contact the authors of this article or the attorney you regularly work with at Hogan Lovells.

Internal Labor Regulations

  • Do you have an Employee Handbook?
  • Do you want to reinforce your policies?
  • Are you going to apply disciplinary actions?

The Internal Labor Regulations (ILR) is a set of mandatory rules for employees and employers for the development of work. Any policy applicable to employees should be included in the ILR to strengthen its enforceability. Disciplinary sanctions must be expressly referred to in this instrument in order to be valid and enforceable.

To file an ILR, the following documents must be prepared and delivered before the competent Local Labor Court:

  1. Incorporation Minutes of the Joint Committee responsible for the ILR.  These minutes must be signed by representatives of the Company (administrative or managerial positions, or a legal representative) and by the employees (e.g. employee within the HR department).
  2. Appointment of Employees’ Representative.  With the purpose of designating their representative in the Joint Committee.
  3. Internal Labor Regulations. It must be signed only by the aforementioned Representatives (employer and employees).
  4. Submission writ.  This document must be signed by the legal representative of the Company evidencing his/her authority through the relevant Power of Attorney (“PoA”).

All of these documents must be presented in 5 execution copies enclosing information in terms of PoA, company’s address, etc.

The Labor Board usually requires that the ILR and its annexes be filed within 8 business days following its signature date.  Therefore, it is advisable to confirm a date of signature that allows sufficient time to have all of the documents in place for its filing.

Should you require further information on the ILR and its implementation, please feel free to contact us.

As we previously reported, New York City Mayor Bill de Blasio signed the “Stop Sexual Harassment in NYC Act” (the “Act”) into law earlier this year.  The New York City Commission on Human Rights (the “NYCCHR”) has now released additional guidance, including the mandatory fact sheet and notice referenced in the Act.

Effective September 6, 2018, all New York City employers must display the anti-sexual harassment notice in a conspicuous location. The notice provides examples of sexual harassment and how to report incidents within an employer’s organization or to the NYCCHR. Additionally, New York City employers must provide the fact sheet to all new hires.  Employers may comply with this requirement by placing the fact sheet in an employee handbook, as long as the handbook is distributed to new hires.

The NYCCHR posted the fact sheet and notice on its new website, which includes additional information on the Act.  As a reminder, beginning on April 1, 2019, New York City employers with at least 15 employees will be required to conduct annual anti-sexual harassment trainings.  These trainings must be “interactive” and explain what sexual harassment is, along with the process of reporting complaints internally and to the respective federal, state, and city administrative agencies.

The Labor and Employment Team at Hogan Lovells has extensive experience providing interactive anti-harassment training, developing anti-harassment policies and complaint procedures, and guiding companies on the best practices for complying with federal and state labor and employment laws. We will continue to keep you updated on the latest developments concerning recent legislation introduced to address sexual harassment in the workplace.

For more information or for any other employment matter impacting your business, please contact the authors of this article or the attorney you regularly work with at Hogan Lovells.

Late last month, California Governor Jerry Brown signed Assembly Bill 2282 (“AB 2282”) into law. The Bill attempts to provide California employers with answers to questions that remained after Assembly Bill 168 (the “Salary History Ban” bill) became law.  As a reminder, AB 168 (1) prohibits California employers from asking job “applicants” for salary history information (and relying on this information), (2) requires employers to provide to applicants a “pay scale” upon “reasonable request”, and (3) prohibits employers from paying individuals of different sexes, races, or ethnicities different rates for competing substantially similar work, without having a justification for the pay disparity.

After AB 168’s passage last October, California employers were often left wondering:

  • What if a current employee asks for a new position—is that current employee an “applicant” and subject to the salary history ban law?
  • What is a “pay scale” and what constitutes a “reasonable request” for one?
  • What questions can I ask an applicant?
  • What factors can I rely on that would justify a wage differential between a male and a female worker?

In response, AB 2282 provides clarification in the following ways:

  • The term “applicant” only refers to external job-seekers seeking a new job with the company, and does not extend to current employees seeking a new position. Therefore the company may seek and rely upon salary information of its current employees when considering the employee for a new position.
  • The term “pay scale” means a salary or hourly wage range and a “reasonable request” is one that has taken place after an initial interview has taken place. Therefore, an employer is not required to provide a bonus or equity range, and must only provide the salary or hourly wage range to an applicant after an initial interview is completed.
  • While employers may not ask about salary information, an employer may ask about an applicant’s salary expectations. Additionally, if an applicant voluntarily discloses his or her salary information, the employer may rely on this information when considering an offer of employment. Therefore, there is still much information that can be deduced about an applicant’s salary expectations, though the employer must be careful not to ask questions that are prohibited by law.
  • Factors to be considered when justifying a wage disparity are: (a) a seniority system (b) a merit system (c) a system that measures earnings by quantity or quality of production or (d) a bona fide reason other than sex, race or ethnicity, such as education, training or experience—so long as this factor is not derived from a sex-based, race-based, or ethnicity-based differential in compensation, is job related, and is consistent with a business necessity. Therefore, wage disparities are not per se invalid; though if challenged, employers must be able to show one of the above factors exist.

Salary history bans continue to appear all across the country. Hogan Lovells’ employment team is especially apt to help employers navigate through these muddy waters as these laws often take time to become clearer through legislative and judicial processes.

An economic development bill passed on August 1, 2018 at the close of the Massachusetts Legislature’s 2018 session sets limits on non-compete agreements after a nearly 10 year debate on non-compete reform. The bill, titled, “An Act relative to the judicial enforcement of non-compete agreements,” expected to be signed into law by the governor, will take effect on October 1, 2018.  The bill’s sponsor says it represents a “consensus” piece of legislation based on discussions with legislators, workers and businesses. The new law imposes new limits on non-competes and codifies existing common law, providing a consistent set of standards for enforcing non-competes and ending practices that overreach. The following are the highlights of the new requirements and restriction imposed on non-compete agreements in Massachusetts.

Who is covered: employees and independent contractors who are residents of Massachusetts or employed in Massachusetts least 30 days prior to termination.

Which agreements are covered: traditional non-competition agreements which prohibit competition after employment ends and “forfeiture for completion agreements” which impose financial penalties for post-employment competition such as forfeiture of benefits. The statute does not cover other types of restrictive covenant such as non-disclosure and non-solicitation agreements pertaining to employees, customers, vendors or clients.  Notably,  excluded from coverage are non-competition terms in separation agreements, provided employees are afforded a 7 day right of rescission (consistent with similar rights for persons over 40 in entering into a release of claims).

New Requirements:

  • Non-competition agreements are limited to 12 months (absent malfeasance such as theft of proprietary information or breach of fiduciary duties)
  • Non-competition agreements entered into at the commencement of employment, must be signed by both the employer and employee and state that the employee has the right to consult counsel prior to signing. The agreement must be provided by the earlier of the time of the formal offer or ten business days before commencement of employment.
  • Continued employment alone will not be sufficient consideration for a non-compete entered into after employment; “fair and reasonable consideration” is required. (The other requirements for non-competes entered into at the time of commencement of employment also apply, i.e., ten business days’ notice, signed by both parties, and notice of the right to obtain advice of counsel.) “Other mutually-agreed upon consideration” is not defined, but must be specified in the agreement.
  • Garden leave (the concept of paying someone during the period that they are restricted by the non-compete) or “other mutually-agreed upon consideration” is required for a non-compete. Garden leave requires at least 50% of the employee’s highest annualized base salary within the preceding two years to be paid on a pro rata basis during the restricted period
  • Non-competes are not enforceable against the following categories of employees:
    • Non-exempt employees under the Fair Labor Standards Act (FLSA);
    • Undergrads and grad students who are not working full time;
    • Employees who are terminated without cause or laid off; and
    • Anyone 18 or younger.

Common Law Principles Codified

The new law incorporates long-standing common law requirements, including that the agreement must be no broader than necessary to protect an employer’s trade secrets, confidential information and/or good will.  A non-compete is presumed to be necessary where these interests cannot be adequately protected through other restrictions.  In addition, the restriction must be reasonable in geographic scope.  If the scope is defined as the areas in which the employee “provided services or had a material presence or influence” during the past 2 years, it will be considered presumptively reasonable.  The agreement also must be reasonable in the scope of the prohibited activities in relation to the interests protected.  It will be presumptively reasonable if it is limited to only the specific types of services provided by the employee during the last 2 years of employment.


All actions to enforce a non-compete must be brought in Massachusetts in the employee’s county or Suffolk County’s Business Litigation Session.

Practice Tip

Massachusetts employers should review their existing noncompetition agreements, hiring documents and separation documents to ensure compliance with the new law before October 1, 2018.