Monthly Archives: February 2017

February 25, 2017

Utah’s Non-compete Research Study Results Released: No New Non-compete Legislation in 2017

By Bryan Benard

The results from an unprecedented research study seeking input from 2,000 Utah employees and 937 Utah employers about the use of non-compete agreements has just been released and can be viewed on the Salt Lake Chamber of Commerce website here:

http://slchamber.com/noncompetestudy/

Initial Reactions

Some interesting results jump out immediately. Based on the responses, 18% of Utah employees currently have a signed non-compete with their employer. 35% of the employee respondents indicated that at some point in their careers, they had been asked to sign a non-compete. 96% of employee respondents stated that they were aware that they were signing a non-compete when they signed the agreement. 40% of employees with current non-competes in Utah believed their non-compete agreement was fair, while another 34% believed that their non-compete was moderately fair. 26% of employees did not believe that their current non-compete was fair. 51% of responding employees indicated that they were ok signing a non-compete if the terms were fair.

The study seemed to confirm that last year’s non-compete bill, limiting non-competes to one year in duration, was an appropriate duration. 90% of employer respondents, and surprisingly, 74% of employee respondents, responded that Utah law should allow non-compete agreements if they are supported by consideration/value and are reasonable in scope and duration. Most employee and employer respondents indicated that they believed it was rare that a non-compete agreement dispute resulted in a court case.

Through focus group research, in addition to the survey question results, some areas of overlapping agreement appears likely between positions held by employers and employees.  Some themes indicate that there could be some consensus relating to not allowing usage of non-competes with lower wage earners and perhaps requiring more notice to employees about non-competes at the beginning of employment.  The survey results are extensive and impressive, and will require significantly more review and consideration.

Legislative Response

Good information should drive good policy decisions. Speaker Greg Hughes, Representative Mike Schultz, and Representative Tim Hawkes have been very committed to the research-first process. They have supported this unprecedented effort at collecting Utah-specific information that will then drive their policy decisions.

With only 9 business days left in this legislative session, thoughtful legislation based on these results would be very difficult, if not impossible, to propose, debate, and consider. Hours after the results were released, Representative Schultz indicated that rather than pursuing legislation on non-compete agreements this year, he and Representative Hawkes remain committed to working with the working group and other stakeholders to utilize this research and take sufficient time to consider further legislation. Here is his statement. As a result, it looks like there will be no further legislative action on non-compete agreements this session but continued work will take place before the 2018 legislative session.

Research Study Process

During the 2016 Legislative session, a working group was formed to try to reach a compromise on the 2016 non-compete bill. The working group consisted of the legislators proposing the non-compete legislation, business leaders (Randy Shumway, Vance Checketts, Jeffrey Nelson, and Dan Sorenson), the Salt Lake Chamber (Lane Beattie, Abby Osborne and Michael Parker), the Governor’s Office of Economic Development (Val Hale, Aimee Edwards), and Bryan Benard of Holland & Hart LLP. After the session, the working group discussed the concept of a Utah-specific research study of Utah-based employees and employers, related to the use of non-competes in Utah. The Cicero Group was tasked with conducting the research study and the study was funded 50/50 by the Legislature and the business community.

The survey questions were developed by Cicero group in conjunction with two employment law lawyers who donated their time, Jaqualin Friend Peterson (employee-side) and Bryan K. Benard of Holland & Hart LLP (employer-side). Input was then sought from each legislator, the business community, and the public, with all comments and suggestions reviewed, discussed, and addressed through several revisions to the study questions. Hundreds of hours were spent in this process to prepare a comprehensive, unbiased survey—one tailored to employees and one for employers that covered the same issues.

The survey was conducted over several months with 2,000 employees and 937 employers responding. Employees from a broad variety of private companies (both large, medium and small in size) were eligible. Employers of diverse industries and sizes were also eligible. Focus groups were also conducted by the Cicero group as were interviews of potential investment firms. The full methodology is set forth in the survey results.

Next Steps

Digesting and understanding the research results will be a large task given the comprehensive and unique nature of the survey itself. While there is academic research and writing on this topic, this type of specific employee/employer responses seems unique and provides a fascinating perspective. And it is certainly full of important information for Utah legislators to absorb and consider. The Salt Lake Chamber will also host two open houses with the Cicero research team on February 28 and March 1, 2017, from 2-4 p.m. at the Chamber.

The study results also provide helpful information for employers to consider and assess with respect to their own practices. Given this large undertaking, it is likely that the information will be discussed, and potential legislation may arise on this topic, for years to come.

Finally, the exceptional work by the Cicero Group should be commended and recognized. Also, the leadership of the Salt Lake Chamber was the driving force to this process and was invaluable.

February 23, 2017

Nevada Non-Compete Agreements Under Attack in Legislature

By Dora Lane

Non-compete provisions in employment contracts will be vastly limited if a new bill recently introduced in the Nevada Assembly is enacted into law. AB 149 would make a non-compete restriction void and unenforceable if it prohibits an employee “from pursuing a similar vocation in competition with or becoming employed by a competitor of his or her employer for a period of more than 3 months after the termination of the employment of the employee.”  (emphasis added.)

Reasonableness Restricted To Three Months

Under current Nevada law, an employer may enter into an agreement with an employee that prohibits the employee from competing with the employer or becoming employed with a competitor for a specified period of time. (NRS 613.200). The Nevada Supreme Court has held that such restraints of trade must be reasonable to be enforceable. According to the Court, a non-compete agreement is reasonable if the restraint is not “greater than is required for the protection of the person for whose benefit the restraint is imposed” and does not impose an undue hardship on the person restricted by the non-compete. In determining whether a specific non-compete restriction is reasonable, Nevada courts look at the duration of the restriction, the territory in which the employee is restrained from employment, and the type of employment that the employee is restrained from pursuing.

The new bill would set a concrete limit on the reasonableness of post-employment competitive restrictions by limiting the duration to three months or less. Any non-compete seeking to restrict competitive activity by a former employee for more than three months would be against public policy, void, and unenforceable. The bill states that a longer restriction necessarily imposes a restraint greater than necessary for the protection of the employer and creates an undue burden for the employee.

Fines and Penalties For Longer Non-Competes

AB 149 would impose penalties on persons, associations, companies, corporations, agents, or officers who negotiate, execute, and enforce agreements that are not compliant with the bill’s mandates. In other words, if an employer willfully enters into a non-compete agreement that restricts post-employment competition for longer than three months, it may be subject to fines and penalties. Parties who willfully prevent a former employee from obtaining employment elsewhere beyond the three-month restriction would be guilty of a gross misdemeanor and subject to a fine of up to $5,000. In addition, the Labor Commissioner could impose against each responsible party an administrative penalty of up to $5,000 for each violation as well as investigative costs and attorney’s fees incurred in any associated proceeding.

Stay Tuned

As proposed, the non-compete limitation would become effective July 1, 2017. The bill was referred to the Committee on Commerce and Labor after its introduction by Assemblyman Richard Carrillo. We will continue to follow this bill as it is considered by the Nevada legislature.

February 17, 2017

Utah Non-Compete Bill Fails To Pass The House

By Bryan Benard

The first attempt to further revise the new Utah law on post-employment restrictive covenants (non-competes) has failed.  House Bill 81, by Representative Greene from Utah County, would have further limited the use and viability of non-compete agreements in Utah.  On Friday afternoon February 17, 2017, the House rejected the bill (22 voted “yes” and 49 voted “no”).  Consequently, there is no current non-compete bill in play at the Legislature.

Much of the floor debate focused on waiting for the results of the non-compete study that is being conducted by the Cicero Group (and with which Holland & Hart’s Bryan Benard spent hours assisting with the drafting of the questions).  The study was part of the compromise with House Leadership brokered by the working group created by the Salt Lake Chamber and the Governor’s Office of Economic Development (of which Mr. Benard was a member).  The research study results will come out February 24, 2017.

After the results come out, it is likely that Representative Schultz (and Speaker Hughes) will propose a bill related to the results, so please stay tuned.

Other Utah bills to watch:

HB238 has revisions to the Payment of Wages Act and passed the House earlier this week and is now in Senate committee.

HB242 proposed extending Family and Medical Leave Act requirements to employers with 30 or more employees (rather than 50 or more under federal law).  This bill is currently being held in committee and rumor is that it will not proceed.

HB213 has significant revisions to Utah’s Antidiscrimination Act which could be harmful to Utah employers.  Currently the bill is headed to the House Business and Labor Committee for hearing.

February 16, 2017

Court Overturns $1.3 Million Trade Secret Award Because Design Isn’t Secret

By Mark Wiletsky

Businesses often go to great lengths to protect the secrecy of an essential product design or valuable manufacturing process. But if that design or process is commonly known in the industry, it isn’t actually secret and won’t be protected under trade secret law. One business recently had a $1.3 million jury award for trade secret misappropriation overturned when the Colorado Court of Appeals ruled that its sealed bearing pack design was not a trade secret. Hawg Tools, LLC v. Newsco Int’l Energy Servs. USA, Inc., 2016 COA 176M.

The Design of Sealed Bearing Packs For Mud Motors

Hawg Tools supplies and rents equipment used by oil and gas drilling companies. One of the tools supplied by Hawg Tools is called a mud motor, which is inserted into an oil well hole for drilling operations. One of the components in the mud motor is a bearing pack that allows a tubular shaft to turn the drill bit without friction. Bearing packs can be either wash bearing packs, which leave the bearings exposed to the surrounding drilling fluid, or sealed bearing packs, which are sealed to prevent fluid from entering the bearing assembly. Sealed bearing packs last for days whereas wash bearing packs last only a few hours. Consequently, the sealed packs permit drilling to continue longer before maintenance is required.

In 2008, Daniel Gallagher, the owner of Hawg Tools, arranged for a designer, Joe Ficken, to design the sealed bearing packs to be used in mud motors for one of Gallagher’s prior businesses. Gallagher did not request any special features or customizations for the sealed bearing packs. Ficken stated that the design was simple and took him only two days to complete. Through a series of assignments, all rights in Ficken’s design were assigned to Hawg Tools.

Hawg Tools Files Lawsuit For Misappropriation of Trade Secrets

In 2011, Ficken accepted a job at Newsco, an oil and gas drilling operation that also uses mud motors, where he was asked to design sealed bearing packs for Newsco’s use. In 2013, Gallagher discovered that Ficken had designed a sealed bearing pack for Newsco that was similar to the design he had assigned to Hawg Tools. Gallagher filed a lawsuit against Newsco and Ficken for misappropriation of a trade secret, as well as other claims, based on Newsco’s use of the similar sealed bearing pack design.

The case went to trial and a jury returned a verdict of $1.3 million in favor of Hawg Tools on its trade-secret claim, with additional damages awarded on other claims. The trial court denied defendants’ post-trial motions and the defendants appealed to the Colorado Court of Appeals.

Step One: Is It A Trade Secret?

The Court of Appeals determined that Hawg Tools had provided ample evidence at trial to establish that Newsco’s design of its sealed bearing pack was essentially the same as its own design. But the appellate court also found that Hawg Tools failed to provide sufficient evidence that its design was in fact a trade secret.

The Colorado Uniform Trade Secret Act defines a trade secret to include “the whole or any portion . . . of any . . . design . . . which is secret and of value.” The Court of Appeals thus looked at whether the design of Hawg Tools’ sealed bearing pack was in fact secret and not a matter of public knowledge or of general knowledge in the trade or business.

The Court acknowledged that a design may be a protectable trade secret if it includes a combination of elements in the public domain that is unique and the unified design or operation of those elements provides a business with a competitive advantage. However, if the design is not unique to the business, the publically known elements typically will destroy an attempt to characterize it as a trade secret.

In examining the evidence regarding the design of the sealed bearing packs, the Court found that Hawg Tools did not show that its design was different from other designs that were publically available at the same time. In fact, the Court noted that sealed bearing packs had been around since 1971. Evidence in the record showed that Hawg Tools’ design was “of public knowledge or of a general knowledge” in the mud motor manufacturing business. Therefore, the Court ruled that there was insufficient evidence that the design was secret. The Court overturned the jury’s verdict on the misappropriation claim, depriving Hawg Tools of the jury’s $1.3 million award. It is unclear whether Hawg Tools will seek review at the Colorado Supreme Court.

Lessons Learned

Trade secrets must be truly secret to be protected under trade secret laws. Businesses may utilize various legal means to protect confidential information that may not rise to the level of a trade secret, including using non-disclosure agreements and other contractual restrictions. But in order to allege a claim of misappropriation of a trade secret, the design, process, or formula at issue must not be in the public domain or known within the industry.

February 7, 2017

SEC Targets Severance Agreements That Impede Whistleblowers

By Mark Wiletsky and Brian Hoffman

The U.S. Securities and Exchange Commission (SEC) is cracking down on severance agreements that prohibit former employees from contacting regulators or accepting whistleblower awards under threat of losing their severance payments or other post-employment benefits. More and more, the SEC’s Enforcement Division has announced new cases filed against, and settlements made with, companies which restrict former employers from blowing the whistle through severance agreement clauses. Many of the scrutinized companies are not in the securities industry, and the problematic contract language is not as obvious as you may think.

Dodd-Frank Act Established Whistleblower Programs

The 2010 Dodd-Frank Act established whistleblower programs for the SEC as well as the Commodity Futures Trading Commission. Under the SEC’s whistleblower program, eligible whistleblowers who provide unique and useful information about securities-law violations to the SEC can collect significant awards of 10-to-30 percent of a penalty that exceeds $1 million.

Essential to the program, however, are the anti-retaliation provisions, which prevent whistleblowers from suffering adverse actions as a result of their whistleblowing activities. In addition, an SEC rule, Rule 21F-17, prohibits any action that impedes an individual from communicating with the SEC about possible securities violations. Rule 21F(h)(1) of the Dodd-Frank Act prohibits employers from taking retaliatory actions against whistleblowers who make protected reports.

Award Waivers, Confidentiality, and Non-Disparagement Clauses

Severance agreements often contain boilerplate language, occasionally including clauses that restrict a former employee from disclosing any confidential company information and disparaging the company or its officers and managers. Agreements also sometimes require that a former employee agree to waive any awards or monetary recovery should he or she file a complaint with a governmental agency. These severance provisions are exactly the type of restrictive language that the SEC has been targeting.

In its first whistleblower protection case involving restrictive language, in 2015 the SEC charged a global technology and engineering firm with a violation of Rule 21F-17. The company had required witnesses involved in internal investigations to sign confidentiality agreements that stated that the employee could face discipline or termination if they discussed the matter with outside parties without the prior approval of the company’s legal department. Because the investigations could involve possible securities-law violations and the clause prohibited employees from reporting possible violations directly to the SEC, the SEC found that the restrictive language in the confidentiality agreements impeded whistleblowers. The company agreed to pay a $130,000 penalty to settle the charges and voluntarily amend its confidentiality statements to add language to inform employees that they may report possible violations to the SEC and other federal agencies without company approval or fear of retaliation.

Recent SEC Cases Targeting Severance Agreements 

Additional whistleblower severance agreement cases highlight other clauses targeted by the SEC. In mid-2016, the SEC charged a building products company with using severance agreements that required former employees to waive their rights to a monetary recovery if they filed a complaint with the SEC or another government agency. The clause stated that the departing employee was required to waive possible whistleblower awards or risk losing their severance payments and other post-employment benefits. The company did not admit liability, but agreed to settle with the SEC for a $265,000 penalty.

Also in mid-2016, the SEC charged a financial services company for using language in agreements that restricted employees’ ability to disclose information to government agencies. Problematic wording included restricting any disclosure of confidential information, except when disclosure is required by law, in response to a subpoena, or with the company’s permission. (See also our prior client alert on the above three cases.)

Read more >>

February 3, 2017

Wyoming Legislature Convenes And Employment Bills Are On Deck

By Brad Cave

The Wyoming Legislature convened its general session on January 10, 2017. A bunch of interesting employment-related measures have been filed for the Legislature’s consideration. Some make good sense; others not so much. Employers can follow the progress of these proposals through the Legislature’s website at legisweb.state.wy.us, and we will update you as the session progresses.

Unemployment and Workers Compensation

House Bill 71 would permit the Unemployment Insurance Division to establish an Internet-based communication system to transmit determinations, decisions or notices when the claimant or the employer agree to receive those documents through the system. The bill would establish rules for determining when documents are delivered using such a system and acknowledgement of delivery under the system. No action has been taken on this proposal.

House Bill 84 would authorize the Department to enter into installment payment agreements with employers who are delinquent on the payment of workers compensation premiums, lowers the interest rate on delinquencies to 1%, and gives the Department some discretion on whether to sue or shut down an employer who is delinquent in paying premiums. The House Labor, Health and Social Services Committee unanimously adopted a “do pass” recommendation for this bill.

Similarly, House Bill 85 authorizes the Department of Workforce Services to enter into agreements with employers for the repayment of delinquent unemployment contributions of up to twelve months in duration. The bill would also reduce the interest rate for delinquent contributions from 2% to 1%. This bill has been referred to the House Labor, Health and Social Services Committee for consideration, but no action has been taken by the committee.

Senate File 101 would exempt seasonal employment from unemployment benefits and premiums. The measure would define seasonal employment as employment limited to 20 weeks in any 12 month period, and exclude seasonal employment and wages earned from such employment from unemployment insurance purposes. This proposal has been referred to the Senate Labor, Health and Social Services Committee.

Wages 

In 2015, the Legislature changed Wyoming law to permit employers to make final wage payments to employees on the employer’s regular payroll schedule, regardless of the reason for termination. House Bill 92 amends that schedule to require employers to comply with any time specified under a collective bargaining agreement between the employer and its employees’ union. The bill passed the House without opposition, and is presently awaiting action by the Senate.

House Bill 140 is a perennial offering to raise the minimum wage. The amount of the proposed increase has changed from year to year. This year’s bill calls for a minimum wage of not less than $9.50 per hour, and a training wage for the first six month’s of employment of $7.50. Under the measure, tipped employees would receive a minimum wage of $5.50, not considering tips, and at least $9.50 per hour with tips. Tipped employees would also be able to file a claim for three times the amount the employer owes if the employer fails to make up the difference between the general minimum wage and the tipped employee minimum wage, when the employee’s tips do not cover the difference. The bill is awaiting action by the House Labor, Health and Social Services Committee.

House Bill 209 would require the Department of Workforce Services to update a 2002 study about gender wage disparity in Wyoming. The bill would require the study to analyze disparities on the basis of county and occupation, and to opine on the causes, impacts, solutions and benefits of resolving any such disparities. This proposal has been introduced, but no action or committee assignment has been made.

Veterans, Military Service and Military and Veterans Spouses

The Joint Transportation, Highways and Military Affairs Interim Committee proposed a trio of veterans’ preference measures:

Senate File 53 would require that all public employers, and all private employers hiring for public works projects, give veterans a “preference prior to the interview process.” The measure would amend current law to direct that, if a public employer uses a numerical scoring system for applicants, veterans shall be granted a 5% advantage over any nonveteran, and, if the veteran has a service-connected disability, a 10% advantage. If no scoring system is used, a qualified veteran shall be given preference over any equally qualified nonveteran candidate.  This file would define veteran as any honorably discharged service member or a serving spouse of any deceased service member. After several attempts to amend the proposal, it passed the Senate by a large majority and is awaiting action in the House.

Senate File 54 would create a preference for the hiring of military spouses by all public entities and private employers with contracts on public works projects. A military-spouse applicant would be preferred for appointment if the applicant possesses the business capacity, competency, education or other qualifications for the position. If a public entity uses a numeric scoring system, the military spouse shall be allowed a 5% advantage over any competitor-applicant. If no numeric scoring system is used for a position with a public entity, the military spouse shall be given preference over equally qualified candidates. This file passed the Senate by a narrow five-vote majority, and is waiting for consideration by the House.

Senate File 55 would have amended the Wyoming Fair Employment Practices Act to prohibit discrimination against an applicant or employee because that person is a military spouse. A military spouse is an individual married to an active uniformed military member or member of the national guard or any guard reserve or auxiliary component. The Senate defeated this measure by a vote of 11 to 19.

Finally, House Bill 101 would permit, but not require, school district boards to create a hiring preference for veterans and surviving spouses of veterans. This bill would also clarify that the current law requiring veterans’ preferences does not apply to school districts. The House Education Committee gave this bill a unanimous “do pass” recommendation, and it is working its way through the process on the House floor.

Franchisor Protection 

Senate File 94 appears to be a reaction to the National Labor Relations Board’s efforts to treat the employees of franchisees, most notably the employees of various McDonald’s franchisees around the country, as employees of the franchiser corporation. The measure declares that franchisee employees could not be deemed an employee of a franchiser for any purpose under Title 27 of the Wyoming Statutes, which would include unemployment, workers’ compensation, fair employment, and the wage payment statutes. The measure has been assigned to the Senate Corporations Committee for consideration.

Waiver of Governmental Immunity for Health Care Whistleblower Claims 

Wyoming law currently prohibits discrimination against employees of licensed health care providers who report any violation of state or federal law to the Wyoming Department of Health. However, most hospitals in Wyoming are operated by governmental entities which are immune from liability under the Wyoming Governmental Claims Act for any claim unless the claim is specified as an exception under that Act. House Bill 142 would amend the Governmental Claims Act to create an exception for discrimination against whistleblowers who are employed by public hospitals. This bill passed the House with a strong majority, and is waiting for action in the Senate.

Early Retirement for State Employees 

Senate File 95 would create a one-time early retirement program  for eligible state employees. The program will apply only to employees who elect to accept the benefit between April 1 through June 30, 2017. Eligible employees would be defined as those between 52 and 55 years of age, with 15 to 18 years of services, such that their age and years of service total at least 70. Eligible employees who accept the offer will receive an enhanced monthly retirement benefit until age 65, and other insurance related benefits. The measure would also restrict the ability of the various state agencies to fill any position vacated by an eligible employee who accepts the early retirement benefit. The measure is currently waiting for consideration by the Senate Revenue Committee. 

Resistance to Federal Workplace Safety Regulations 

House Bill 70 is an effort to resist efforts by the United States Occupational Safety and Health Administration (OSHA) to regulate in certain areas. The measure contends that OSHA has “expanded its regulations of highly hazardous chemicals on questionable authority.” This measure would authorize the Governor and the Attorney General to defend the interests of Wyoming citizens against regulations proposed by federal OSHA in areas of “questionable” federal authority. The measure does not specify those areas. The House passed this bill with a strong majority, and it is waiting for consideration in the Senate.

Civil Rights

House Bill 135 would create the Government Nondiscrimination Act, which would prohibit any government employer from discriminating against any person because the person believes or acts based on a religious belief or moral conviction that marriage is a union of one man and one woman, and that gender is a person’s biological sex as determined by anatomy and genetics at the time of birth. The measure would have far-reaching implications in various areas of state law beyond employment protections, and would also prohibit any employment-related actions for those prohibited reasons. The measure would create a legal claim for violation of the statute, with broad remedies including compensatory damages, and would eliminate the immunity of governmental entities for violations of the proposed statute. This bill has been referred to the House Judiciary Committee for consideration.

Joint Resolution SJ0001 has been proposed to create an individual right of privacy in the Wyoming Constitution. The amendment would read that the “right of individual privacy . . . shall not be infringed without the showing of a compelling state interest.” The resolution does not explain how the amendment would apply to the relationship between governmental entities and their employees with respect to internal investigations, drug testing or other aspects of the public employment relationship. This resolution was received for introduction in the Senate, but no action has been taken on it since introduction.

Joint Resolution SJ004 has been proposed before the Senate to put a resolution before Wyoming voters to amend the Wyoming Constitution. The constitutional amendment would prohibit discrimination or preferences  in public employment, contracting, education and a variety of other public services and activities on the basis of race, sex, color, ethnicity or national origin. The amendment would apply to all public entities. This resolution was received for introduction in the Senate, but no action has been taken on it since introduction.

Bottom Line 

We encourage Wyoming employers to keep tabs on these bills, and contact your Senator or Representative if these impact your organization or industry. The legislative session adjourns in early March, so additional measures may be introduced. We will continue to update you as the session continues over the next month.

February 1, 2017

Workplace Implications of the President’s Immigration Executive Order

6a013486823d73970c01b8d1be606f970c-120wiBy Roger Tsai

On January 27th, President Trump signed an Executive Order titled “Protecting the Nation from Foreign Terrorist Entry into the United States” immediately suspending the entry of citizens from Syria, Iran, Libya, Somalia, Yemen, Iraq, and Sudan, as well as the entry of new refugees. Employers with immigrant employees in the affected countries are encouraged to suspend work-related travel into the U.S. for the time being, as they may be unable to enter the U.S. Where possible, immigrant employees currently in the U.S. from the affected countries, even those with valid immigration documentation, such as H-1B visas, should avoid international travel for the next 90 days unless there is more clear indication of enforcement activities, a change to the Executive Order, or court-related clarity.

Who Does The Executive Order Impact?

  • Foreign nationals from the seven affected countries will likely be temporarily prevented from entry at U.S. airports and ports of entry by U.S. Customs and Border Protection for a 90-day period. Similarly, U.S. Embassies abroad are expected to suspend the issuance of temporary nonimmigrant visas and immigrant visas to foreign nationals of the seven countries. The issuance of visas or entry into the U.S. of dual citizens of affected countries will also likely be temporarily suspended. To prevent unnecessary travel, the Department of Homeland Security (DHS) is working with airlines to prevent the selected travelers from boarding international flights. Because the Executive Order also orders DHS to suspend “visas and other immigration benefits” to the citizens of the affected countries, immigrant employees in the U.S. seeking extensions of existing visas through U.S. Citizenship and Immigration Services may potentially be impacted.
  • U.S. permanent residents who are citizens of the affected countries will be allowed to enter the U.S. based on recent updates issued by White House Chief of Staff Reince Priebus and DHS. Initially, the Executive Order only permitted the entry of U.S. permanent residents “when in the national interest” on a case-by-case basis. On January 29th, DHS clarified that lawful permanent resident status will be a dispositive factor in the case-by-case determinations, absent derogatory information indicating a serious threat to public safety and welfare.
  • Newly admitted refugees from any country will be suspended for a 120-day period under the Executive Order. Current employees under refugee status should be permitted to travel internationally but may face additional scrutiny at Customs if they are from the seven affected countries. The entry of new Syrian refugees is indefinitely suspended.
  • Immigrants seeking renewal of their visas through the Visa Interview Waiver Program (VIWP). Previously, the VIWP allowed visitors and other visa holders to renew visas without a consular interview if the immigrant was applying for the same visa category within 12 months of the initial visa expiration. Applicants could simply drop off their application, passport and payment and obtain a renewed visa stamp without undergoing a visa interview. The Executive Order immediately suspends the VIWP and most nonimmigrant visa applicants will be required to attend an in-person interview to renew their visas. The VIWP is separate from the Visa Waiver Program which allows citizens of 38 countries to enter the U.S. as visitors for 90 days without a visa.

Over the course of the next 30 to 120 days, the Department of State and DHS will provide reports to the President regarding the public-security concerns, and we will provide additional alerts as the policy evolves.