Minimum Wage, Personnel File, Non-Compete, and Free Speech Changes Being Considered by Connecticut Legislature

The Connecticut legislature is currently considering a number of bills that would impact state employers.  Among those under consideration are bills that would increase the minimum wage; place a 3 day deadline on employers to provide employees with a copy of their personnel file; provide employees a 10 day period to obtain legal advice before signing a non-compete agreement, and expand legal remedies when a non-compete violates the law; and greatly expand employees’ free speech rights regarding workplace issues.

The minimum wage bill contemplates raising the current rate of $8.25 per hour to $9.00 on July 1, 2013, and to $9.75 on July 1, 2014.  Beginning July 15, 2015, the bill would require the Labor Commissioner to calculate a new rate each July 15, based on the prior years’ rate of inflation, with the newly calculated rate taking effect January 1, 2016, and each January 1thereafter.  This would eliminate periodic battles over raising the minimum wage, and would permanently tie the rate to the rise in inflation.

The personnel file bill would require employers to permit current employees to inspect and/or copy their personnel file within 3 business days after a written request to do so is received by the company.  The current law provides for a “reasonable” period, which many employment attorneys felt was too imprecise. In addition, the bill would require employers to permit former employees to inspect and/or copy their personnel file within 10 business days of receipt of a request, provided the request comes within one year following the termination of employment.  Again, the 10 day limit replaces the current “reasonable” period requirement. A new provision would require employers to provide an employee with a copy of any disciplinary documentation not more than one business day after the date on which the documentation is issued. Also, employees would be entitled to immediate written notice of termination. Finally, employers would have to add a statement to any disciplinary notice, termination notice, or performance evaluation, that the employee has a right to submit a written statement contesting any aspect of the notice or evaluation, which shall be added to the personnel file, and disclosed to any third party to whom the file is transmitted or disclosed.

The new non-compete bill would impact employers seeking a new non-compete agreement, or an extension of an existing non-compete agreement.  All employers would be permitted to enter into non-compete agreements with their employees if the agreement is reasonable in its duration, geographical scope, and protectable interest.  This is similar to current law, with the exception that courts currently also consider any restraint on an employee’s ability to pursue his/her occupation, and the extent of interference with the public’s interest.  More importantly, employers would now have to provide at least 10 business days for the employee to seek legal advice prior to signing the agreement.

Perhaps most troubling is a newly proposed provision that would allow employees to bring a civil action to recover damages, plus costs and reasonable attorneys’ fees if the employer violates the law.  Violations could arguably include unreasonable duration, scope, and interest provisions, or a failure to provide adequate consideration time. These could lead to monetary damages, attorney’s fees, and modifications to the non-compete as the bill also authorizes courts to “blue pencil” overly broad agreements to make them more reasonable and enforceable.

Finally, a proposed free speech bill to modify Conn. Gen. Stat. § 31-51q would eliminate a key employer defense in free speech cases.  Currently, employees do not have free speech rights to speak out on workplace matters. Further, even when speaking out on non-work related matters, the speech cannot substantially or materially interfere with the employee’s bona fide job performance or working relationships between the employee and employer.  To read more about free speech rights in Connecticut, click on a previous article written in July 2012.

The purpose of the bill is to override two important Connecticut Supreme Court cases issued last year, Schumann v. Dianon Systems, Inc. 303 Conn 585 (2012) and Perez-Dickson v. City of Bridgeport, 304 Conn. 483 (2012), which together made clear that public and private sector employees’ free speech rights do not extend to matters concerning their workplaces.  

The proposed bill would eliminate an employer’s right to discipline an employee for objectionable speech directed toward the employer, unless it could show an adverse effect on job performance or working relationships.  In essence, employers who previously could get a claim dismissed by showing the speech related to workplace issues, would no longer have that defense available, and must meet the more difficult burden of proving adverse effects related to the speech.  

As fellow employment lawyer Daniel Schwartz reported in his Connecticut Employment Law Blog, this bill could have the greatest impact on employee relations in a generation.  He went on to provide some excellent examples:

“Imagine if a shoe salesman told customers not to buy shoes because he thought the company does not pay its overseas workers sufficient wages. Should that “free speech” prevent the employer from taking action? What about a cook at a fast-food restaurant who refused to serve hamburgers because he thought such food contributed to obesity? What then?

The Court in Schumann recognized these potential absurdities and stated:

“precluding the application of Garcetti to private employers in an action brought pursuant to § 31-51q would render the statute “an absurdity” … because “[v]irtually every workplace dispute involving a …worker would become a free speech case . . . with every employee serving as a roving ombudsman free to overrule her employer.”

To avoid these situations, the Connecticut Supreme Court in Schumann and Perez-Dickson unanimously held that free speech claims do not apply to comments made about workplace matters.  Because this bill would overturn the Court’s ruling, it should be carefully monitored.