Employment Law Updates

Federal Trade Commission’s Final Rule Banning Non-Competes is Published on May 7, 2024

 

After months of input on  a proposed rule, the Federal Trade Commission’s (FTC) final rule banned non-competes for almost all workers beginning 120 days after the rule’s publication in the Federal Register.  If the rule is not successfully blocked through court action, the rule will be effective on September 4, 2024. The rule as published is a ban on “new non-competes with all workers” and it invalidates most non-competes in place except for those who are “senior executives”- which is defined as those workers who earn over $151,164 annually who are in “a policy-making position”.  Multiple legal challenges have already been filed by the U.S. Chamber of Commerce and other groups in Texas and in Pennsylvania, however, if the rule is not successfully blocked from going into effect, then companies or individuals who entered into non-competes with workers other than senior executives, must give notice to the worker by the effective date of the rule on September 4, 2024 that the non-compete will no longer be enforced.

The rule has limited exceptions and does not apply among other listed reasons:

1. When the non-compete involves a person pursuant to a sale of a business entity and that person’s ownership interests in the business entity,

2. When a cause of action related to a non-compete has accrued prior to the effective date of the rule.

There are other situations which might apply differently to each worker’s status and these should be evaluated on a case-by-case basis withf an attorney. The rule also does not eliminate non-solicit, confidentiality and/or non-disclosure agreements between companies and their workers.

The FTC ban on non-competes, assuming it goes into effect, would override current Virginia law regarding non-competes (Virginia has its own ban on non-competes for low wage earners, which is based on a moving salary threshold determined annually, and which as of January, 2024, was an annual salary of $73,320 (Virginia Code § 40.1-28.7:8)).

For questions about the FTC’s or Virginia’s non-compete requirements please reach out to the attorneys at Walsh, Colucci, Lubeley and Walsh, P.C..

 

What Employers Don’t Know About the National Labor Relations Act (NLRA) Can Hurt Them

It is likely that many employers assume that if they don’t have unionized workers that they do not have to pay much attention to talk about the National Labor Relations Act (“NLRA”). However, even for employment sectors with no unionized employees- the NLRA policies apply as they affect most non-supervisory employees.[1] The more recent rulings by the National Labor Relations Board (“NLRB”), which oversees and administers the NLRA, indicate that the Board is more employee friendly than ever before- so employers ignore the potential impact of the NLRA on their business at their peril.

Back in February of 2023, the NLRB issued a ruling in McLaren Macomb, 372 NLRB No. 58 (2023), that determined an employer’s severance agreements, which were offered to furloughed employees, were unlawful because they interfered with, restrained, and coerced employees in the exercise of their Section 7 rights.[2]

These severance agreements (like most I have come across in my legal career) contained a provision prohibiting the exiting employees from making disparaging statements about the employer (a non-disparagement provision) and from disclosing the terms of their severance agreements (a confidentiality provision).

The NLRB determined “a severance agreement is unlawful if its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights, and that employers’ proffer of such agreements is unlawful.”

In August of 2023, the NLRB ruled in Stericycle, Inc., 372 NLRB No. 113 (2023),  that an employer violated Section 8 of the NLRA by maintaining certain rules for its employees that addressed personal conduct, conflicts of interest and confidentiality of harassment complaints.[3]  The NLRB announced a new standard by which to judge whether employers’ work rules and policies violated the NLRA.  Instead of judging the policy from the perspective of the employer (and whether they had a business purpose behind implementing the rule) the NLRB signaled the new standard would be from the perspective of an employee who is economically dependent on the employer (and which employees aren’t?) and whether the employee could reasonably interpret the work rule to have a coercive meaning presuming they were contemplating engaging in protected concerted activity under the NLRA—then the burden would be met from the perspective of the NLRB general counsel (who is responsible for the investigation and prosecution of unfair labor practices under the NLRA) in their efforts to declare the rule unlawful.

Protected concerted activity could mean anything from talking to co-workers about wages and benefits, to participating in a concerted refusal to work in unsafe conditions, or joining with co-workers to talk directly to the employer, the media or an agency about problems in the workplace.  The employer could then counter that presumption of unlawfulness, by proving that the work rule advances a legitimate and substantial business interest, which cannot be advanced with a more narrowly tailored rule or policy. If the employer successfully meets its burden, then the rule stands. However, with little to no guidance to support what each of these burdens actually entails, there is no way to know how easy it might be for an employer to successfully rebut an initial presumption of unlawfulness.

In Stericycle, the NLRB also struck down the long-standing policy of deeming certain work rules to always be lawful, including rules maintaining investigative-confidentiality rules, non-disparagement rules and rules prohibiting outside employment. So at this point, policies related to workplace conduct and expectations are all subject to higher-levels of scrutiny.

To the extent policies or agreements in the employment setting are found to be unlawful by the NLRB, employees might be reinstated, obtain backpay awards if terminated due to violating such a rule/policy or other penalties. The NLRB may order an employer who engages in an unlawful business practice to cease such practice, and formally issue a revised and compliant policy. It is clear the NLRB is investigating unfair labor practice charges with a greater eye toward protecting employee’s rights than ever before.[4] Even if no unlawful policy or rule is found, these types of investigations disrupt the workplace and cause businesses to spend time and money defending their actions.

In the wake of these decisions, employers offering severance agreements to its employees would be wise to utilize counsel to ensure that the agreement can be drafted in such a way that it does not run afoul of the NLRB’s requirements with respect to confidentiality and non-disparagement clauses.  It is also not a stretch to assume that the reasoning in McLaren Macomb might be extended to other types of agreements, including settlement agreements, employment agreements, and restrictive covenant agreements used in the employment setting.

Additionally, employers should have any employment handbooks reviewed by counsel to have them updated to ensure that current work rules and policies are compliant with the new rulings of the NLRB.

The employment attorneys at Walsh, Colucci, Lubeley and Walsh, P.C. can assist with review of severance agreements, non-competes, employment contracts and employment handbooks.

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[1] The NLRA does not apply to federal or state governmental units, domestic or agricultural workers, independent contractors, workers employed by a parent or spouse, employees of railroads or airlines.
[2] Section 7 of the NLRA guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the purposes of collective bargaining or other mutual aid or protection” as well as the right “to refrain from any or all such activities”.
[3] Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the NLRA.
[4] Unlawful labor practice charges were up sharply in 2023 (10% over FY 2022 per the NLRB). See www.nlrb.gov/news-outreach/news-story/unfair-labor-practices-charge-filings-up-10-union-petitions-up-3-in-fiscal.

Walsh, Colucci, Lubeley & Walsh Attorneys Recognized by 2024 Super Lawyers Awards

 

We are thrilled to announce that five members of the firm have been recognized in the 2024 Super Lawyers awards. These firm members were peer nominated and evaluated to be selected into the annual list. Congratulations to Michael Coughlin, John Foote, Andrew Painter, Robert Brant, and Nicholas Cumings on the achievement.

Eminent Domain 

Michael Coughlin – Super Lawyer

 

Land Use / Zoning 

John Foote – Super Lawyer

Andrew Painter – Super Lawyer

Robert Brant – Rising Star

Nicholas Cumings – Rising Star

 

Falls Church Approves Major Senior Housing Project

Regional trends indicate a rising demand for senior housing in Northern Virginia. This is particularly true in the City of Falls Church, where approximately 25 percent of the City’s population is aged 55 and older, making it the largest and fastest-growing demographic group in the city.  

On February 26, 2024, the Falls Church City Council took a major step in addressing the accommodation needs of seniors by approving Quinn Enterprises, LLC’s redevelopment of the Quinn and Homestretch office building complex with a 10-story LEED Gold mixed use senior housing building.  

Located in the City’s S. Washington Street corridor between S. Washington Street and S. Maple Avenue, the site today includes three aging and largely vacant office buildings and associated parking with substantial deferred maintenance.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As approved, the building will comprise approximately 282,500 square feet with 233 senior living units, inclusive of 145 independent living units, 56 assisted living units, and 32 memory care units. The building will also contain approximately 32,600 square feet of medical office uses (which is currently in high demand in the Falls Church area), as well as nearly 15,000 square feet of ground floor restaurant and retail uses. 

Much of the impetus for the project came from Quinn Enterprises co-owner (and longtime City resident), Paul Quinn, who set forth a series of key design drivers for the project. These drivers included the provision of senior housing, opportunities for food and retail, providing space for medical office uses, improved pedestrian mobility, direct access to park space, and acknowledgement of local history. Quinn Enterprises partnered with Andrew Teeters, as well as Homestretch, Inc. to include Homestretch’s land within the proposal. 

 

 

 

 

 

 

 

 

 

In terms of community benefits, the project will provide substantial monetary contributions to address City priorities, including a major $1.9 million to the City’s Affordable Housing Fund. Other contributions include those for bikeshare maintenance, permit parking for nearby residents, libraries, parks, and stormwater. 

The project will provide rent-free space to provide a permanent home for the Tinner Hill Heritage Foundation, which is a local non-profit which raises awareness of the contributions of African Americans and other cultures to the development of Falls Church.  

The project will incorporate a number of green building measures, with a focus on sustainable strategies for heat island mitigation, alternative transportation modes, water use reduction, indoor environmental quality, responsible use of resources, recycling, and wildlife protection. 

The approved landscape design includes trees, plants, flowerbeds, and opportunities for bio-filtration and the maintenance of biodiversity. Vegetation installed for the project will consist of native and non-invasive species, as well as hardy drought tolerant, regionally appropriate, locally adaptive plants.  

One of the major public benefits of the project is its open space approach; it will deliver the most open space (approximately 69 percent) and the most publicly accessible open space (approximately 50 percent) for a mixed-use project in the city.  

Of particular importance, the project will also provide a new 33,000-square foot landscaped park–the largest civic space yet delivered through a mixed-use project in the city. The park will provide space for community events, including markets, festivals, and events celebrating the culture of the Tinner Hill neighborhood. The project will include two pedestrian promenades to provide pedestrian and bicycle linkages in and through the block with distinctive landscaped outdoor areas and connections. 

 

 

 

 

 

 

 

 

 

 

In terms of environmental sustainability, the proposed building will be LEED Gold-certified, with seven percent EV chargers and 50 percent conduit. The project will also reduce stormwater from the site by 20% for the 10-year 24-hour storm.  

Once constructed, the project will help ensure the economic success and viability of downtown Falls Church and surrounding commercial projects. It will also offer opportunities for area residents to age in-place. Residents and workers within the proposed project will be able to walk to downtown businesses, and the project will be a catalyst that anchors the S. Washington Street corridor.  

Walsh Colucci shareholder Andrew Painter represented Quinn Enterprises throughout the process, with assistance by land use planner Bernard Suchicital.

Building perspective images are courtesy of Architecture, Inc.  

Landscaping Plan is courtesy of Red Sketch 

 

Arlington Continues Commercial Initiatives To Battle Office Vacancy

At its April 20, meeting, the Arlington County Board took a major step forward in the implementation of the second round of the County Manager’s Commercial Market Resiliency Initiative (“CMRI”), which seeks to enable the County to better respond to changing economic conditions and consumer trends in the face of increased office vacancy and decreased commercial property tax revenue.  

CMRI was authorized by the County Board in April 2022. The first round of CMRI included the establishment of new commercial uses and a minor restructuring of the Arlington County Zoning Ordinance (“ACZO”). The second round of CMRI focusses on opportunities to alleviate regulatory hurdles that could impede market solutions to commercial resiliency.  

The most recently approved initiatives include the following:  

  • Adaptive Reuse of Obsolete Commercial Buildings: The County Board approved a Request to Advertise (“RTA”) amendments to the ACZO to update the review standards and process for adaptive reuse of obsolete commercial buildings. The RTA recommends potential changes to the Zoning Ordinance in the hopes of creating a more streamlined process for building façade changes, methods for achieving additional density, policies related to community benefits, and the practice of updating older site plan conditions to the current site plan standards. These changes could be adopted as early as September 2024. 
  • Related measures, which are anticipated to be considered later this summer, include consideration of appropriate uses for adaptive reuse projects (e.g., live-work units, self-storage, and residential-hotel units), imbedded carbon savings in rehabilitation projects, and financial incentives for adaptive reuse. Information about this RTA may be found HERE.
  • Increased Rosslyn Density: The County Board approved an RTA to amend the Zoning Ordinance to allow additional density above a 10.0 FAR for existing buildings and approved, but unbuilt, site plan developments in the C-O Rosslyn Zoning District. This effort is primarily geared towards the conversion of already-approved GFA exclusion areas or gross parking areas into GFA in exchange for community benefits. The Planning Commission may consider this as early as July 8, 2024, with the County Board consideration at its July 20th meeting. The staff report for this RTA may be found HERE.
  • Compact Car Parking: The County Board approved an amendment to the ACZO to allow compact parking spaces for hospitals, hospital-related medical and healthcare facilities, medical offices, retail sales, service uses and guest/visitor parking. The amendment also replaces the existing parking requirement for “athletic or health clubs” (one space per 50 square feet of GFA) with that of the more general “retail and service commercial uses” (one space per 250 feet of GFA). Additional information may be found HERE. Further insights are available from firm Land Use Planner, Elliott Young, HERE.

The County Board will continue to consider policy and ACZO amendments in the coming months, and will review the following at its May 18, 2024 meeting: 

  • Shared/Offsite Parking Requirements: The Board will consider Zoning Ordinance amendments to amend share parking and off-site parking in commercial mixed-use districts, alongside changes to definitions, parking/loading standards.  
  • Large Outdoor Media Screens:  The Board will consider Zoning Ordinance amendments to permit such visual display screens in certain large mixed-use developments. The amendment would replace the current Zoning Ordinance definition of “Large Media Screens,” and add definitions and performance standards regarding brightness, hours of operation. Additional information may be found HERE

Additional information on CMRI may be found HERE.

This article was written by Shareholder Andrew Painter.

 

 

 

 

Important Update to Arlington County Parking Regulations

On Saturday, April 20, The Arlington County Board approved amendments to the Zoning Ordinance intended to improve and recodify certain parking provisions of the Zoning Ordinance. These include amendments to § 14.3.7.A, for the removal of existing parking requirements for athletic and health clubs and § 14.3.3.F, to allow compact parking spaces for hospitals, hospital-related medical and health care facilities, medical office, retail sales, service uses, and guest/visitor parking. The Planning Commission public hearing for this Zoning Ordinance Amendment was held on April 10, 2024, where it voted to move for approval, amendment and recodification of the parking provisions mentioned above, with a motion of 9-0. 

The proposed amendments are part of the Commercial Market Resiliency Initiative (CMRI) 2.0, which allows the County to respond to shifts in the economy, market innovations and business practices. The proposed changes offered could have a significant impact on businesses as parking requirements for certain uses become less stringent and demanding. Community outreach for this proposal included two meetings with the Transportation Commission and a single meeting with the Zoning Ordinance Committee, both of which expressed support for the proposed changes.  

Looking closer at the specific changes being made, we can see how current regulations create barriers for businesses by making it difficult to meet parking minimums and fill vacant space. Athletic and health clubs currently are required to provide one parking space per 50 SF of gross floor area (GFA). This standard does not reflect current transportation needs or modern land use practices. With the proposed amendment athletic and health clubs would have to meet the same requirements as general commercial uses, which require one space per 250 SF of GFA. This amendment would also be similar to the requirements of adjoining jurisdictions such as Alexandria, which requires one space per 400 SF or Fairfax County, which requires four spaces per 1,000 SF (equates to one space per 250 SF). 

Another barrier to be amended is the removal of prohibitions on compact car spaces. Currently the Zoning Ordinance does not allow compact car spaces for medical and healthcare facilities, medical offices, retail and service uses, as well as required guest and visitor parking. Although this amendment does not revise the permitted maximum of 15 percent for compact car spaces within a parking area, it does allow for certain land uses to begin utilizing compact car spaces to meet minimum parking requirements.  Uses requiring site plan approval may also request modification of this provision with Board approval of a new site plan or site plan amendment and include a greater percentage of compact spaces. 

Fairfax County Board of Supervisors Approves Tysons Office Conversion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On March 19, 2024, the Fairfax County Board of Supervisors approved a rezoning and proffered condition amendment application to allow the conversion of the existing office building located at 8221 Old Courthouse Road into a multifamily residential building with up to 55 dwelling units.

Walsh Colucci land use attorney Bob Brant and land use planner Bernard Suchicital guided the team through the application process, which included coordination with County staff and outreach to neighboring communities.  In addition to the adaptive reuse of the building, the project will introduce a significant amount of new public and private open space, add significant improvements to the streetscape and pedestrian realm along Old Courthouse Road and Lord Fairfax Road, and decrease the amount of impervious surface on site. 

The project also results in a significant reduction of the existing surface parking lot that surrounds the building, by utilizing the reduced parking rates that are now available following Fairfax County’s approval of Parking Reimagined last year.  Located in the Tysons, residents of the new building will have convenient access to the growing number of retail destinations, dining options, and other amenities in the area. 

The approval represents the latest in a series of recent approvals involving the conversion of aging commercial buildings.  In January 2024, the Walsh Colucci team secured the necessary approvals to allow the conversion of the former Tysons Sheraton Hotel to residential use.   Please contact us regarding any of your land use needs in Fairfax County, or throughout the region.  

In Memoriam: Jerry K. Emrich

On April 8, 2024, Walsh, Colucci, Lubeley & Walsh, P.C. lost a beloved member of its family, Jerry K. Emrich, a founding member of the firm. Jerry was Arlington’s first County Attorney and represented the County during an eight-year period, 1973 to 1981, when the County experienced its most active development and implemented unique land use regulations. From 1983 to 2013, Jerry was in private practice at Walsh Colucci representing numerous clients in litigation, land use and condemnation cases. He has handled development cases in most Northern Virginia jurisdictions as well as in other parts of Virginia. Among Jerry’s most complex cases were private development of county owned land in both Arlington and Fairfax counties.  

Jerry was a devoted husband to his wife Lilienne, prior to her death, and a loving father to his daughters Leith and Amanda. Jerry grew up in the Midwest and attended Iowa State, which led to his lifelong love of dog sledding and Iditarod racing. He will always be remembered for his love of long walks, cigars, dog sledding, his dry sense of humor, his upbeat personality, his generous nature, and for caring deeply for his friends and colleagues, many of whom are proud to call him a mentor.  

Jerry will be deeply missed as both a friend and colleague, and his passing is an immense loss to all who knew him. Our thoughts and prayers are with Jerry’s family during this difficult time. 

Firm Shareholder, Andrew Painter, Set to Moderate BISNOW’s The Future of Arlington County

On April 17th, BISNOW will be hosting the Future of Arlington County: Exploring National Landing, Rosslyn, Ballston, and Clarendon speaker panel. Firm Shareholder, Andrew Painter, will moderate a discussion entitled “Beyond the Bridge: Rosslyn and Ballston’s Asset Class Diversity and Forward-Thinking Strategies” amongst colleagues from Insight Property Group, Skanska USA Commercial Development, Monday Properties, and the Arlington County Board of Supervisors.  Andrew works in the firm’s Land Use and Zoning practice group, where he focuses on securing zoning entitlements across Northern Virginia, including Arlington County, Fairfax County, Loudoun County, the City of Falls Church, the City of Fairfax, and the Town of Leesburg. A native of Northern Virginia, Andrew has spent much time traveling and writing about the region’s land development history and received an award from the Virginia Chapter of the American Planning Association for his review of enduring rural landscapes in Fairfax County.

At the panel, you can expect to learn:

  • What does Arlington County have in store for its 2024 development pipeline? How are developers and investors taking lessons learned in 2023 and applying them to their future project investments?
  • Why are new residents, tenants and businesses being drawn to neighborhoods like Clarendon, Rosslyn, and National Landing? How are developers and investors selecting neighborhoods for their projects? What factors are being considered?
  • What is in store for Arlington’s mixed-use development pipeline in terms of bringing in multifamily, retail and other projects? What are current resident and tenant demands and how are developers meeting them while staying within budget?
  • How are the challenges of the economic downturn impacting construction and development in Northern Virginia? What solutions have developers and investors come up with to overcome these obstacles?
  • How is the area working together to build a competitive live-work-play community compared to other NoVa counties?
  • As the county continues to grow, how is the area strategizing to improve infrastructure, transportation, labor force and much more?

You can register to attend the event hosted at the Hyatt Regency Crystal City HERE.

 

 

 

 

 

 

 

 

 

 

 

Board of Supervisors of Louisa County, VA v. VHOV

On February 27, 2024, the Virginia Court of Appeals ruled in favor of a landowner and held that the BZA erred in refusing to issue the landowner a variance. In Board of Supervisors for the County of Louisa v. Vallerie Holdings of Virginia, LLC, the landowner purchased a two-story home bordering Lake Anna (the “Property”). The prior owner commenced, but never finished, remodeling work on the Property. After purchasing the Property and without applying for a building permit, the landowner attempted to repair and complete renovations. It then applied to the BZA for a variance to rebuild the staircase and deck, which extend into the Property’s five-foot setback. The BZA denied the variance because it determined that the landowner created its own hardship by spending on remodeling work before getting a building permit. The landowner appealed the BZA’s decision. On appeal, the Court of Appeals agreed with the trial court that the BZA erred when it denied the variance because the strict application of the zoning ordinance unreasonably restricted the landowner’s use of the Property and the landowner did not create its own hardship.  

Here are some key takeaways from the decision: 

  • Expanding the Availability of Variances: The Court of Appeals held that the General Assembly intended to expand the availability of variances in its 2015 amendments to Virginia Code § 15.2-2309. For example, the Code now requires the BZA to issue a variance when the required elements are met. 
  • Self-Inflicted Hardship Considerations: The Court held that under the facts of this case, the issues created by the prior owner could not be considered a self-inflicted hardship on the landowner who applied for the variance.  

 

This article was written jointly by the litigation practice group of our Prince William office.