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Dan Johnson represents government contractors and other clients in litigation and employment matters.  He has more than 30 years of experience litigating complex disputes and has successfully represented government contractors and other clients in large trade secret claims, contract claims, prime-sub disputes, software development disputes, and various business disputes arising from corporate transactions, joint ventures, sales of commercial goods, construction projects, and government procurements.  Mr. Johnson specializes in representing contractors in multi-million dollar litigation involving the alleged theft of data or the movement of key employees from one contractor to another.  His representation has resulted in multiple bench and jury verdicts in favor of his clients.  He also helps government contractors and other clients resolve a host of other employment issues.

The employee non-competition agreement landscape continues to evolve rapidly, with several states enacting new limits on the use of non-competition agreements between employers and employees.  Once a valuable tool for employers to protect their businesses from unfair competition, loss of customers, or misuse of company confidential information, many states have increasingly limited the enforceability of such agreements.

The federal government is now weighing in on the appropriate use of non-competition agreements between employers and employees.  President Biden’s July 9, 2021 Executive Order asks the Federal Trade Commission (“FTC”) to limit such agreements—signaling a potential expansion of federal regulation of agreements between employers and workers.  And a pending Senate bill would ban most non-competition agreements.  Given these developments, government contractors and other employers should assess whether their use of these agreements with employees is consistent with recent state developments and aligned with the broader trend toward limiting the enforceability of these agreements.


Continue Reading Recent Federal and State Laws Restrict Use of Employee Non-Competition Agreements by Government Contractors and Other Employers

As federal agencies adjust their worksites to the realities of the COVID-19 pandemic, these changes will likely have a direct impact on government contractors and their employees who work at those sites.  If the government closes or reduces operations at a site, a contractor may be forced to furlough or reduce the hours of employees.  Some reduction actions could result in an employee who was exempt from overtime payments under the Fair Labor Standards Act (“FLSA”) being reclassified as non-exempt, which would require the employer to pay the employee overtime wages, with negative long-term repercussions.

An employee may volunteer to reduce her salary for any period of time without any FLSA consequences so long as her decision is completely voluntary.  To the extent the employer must impose involuntary reductions on an exempt employee, the following options are available that should not result in the employee being reclassified as non-exempt under FLSA:


Continue Reading FLSA Considerations In Response to Government COVID-19-Related Directions

A recent Virginia Supreme Court case underscores the hurdles government subcontractors may face when they seek to enforce common teaming agreement terms. CGI Fed’l Inc. v. FCi Federal, Inc., No. 170617 (Va. June 7, 2018). This case of the “disappearing workshare” also illustrates that strategic choices made during teaming agreement negotiations and in litigation may dictate whether the subcontractor has any recourse against the prime contractor.
Continue Reading Teaming Agreement Challenges for Subcontractors

In a case of first impression, a Court of Appeals has held that a government subcontractor’s claim for reimbursement of its actual indirect costs was time-barred. Fluor Fed’l Solns. LLC v. PAE Applied Techs, LLC, No. 17-1468, 2018 WL 1768233 (4th Cir. Apr. 12, 2018) (per curiam) (unpublished). It is the first case to directly address the interplay between the Allowable Cost and Payment Clause of the Federal Acquisition Regulation (“FAR”), 48 C.F.R. § 52.216-7, and a statute of limitations. It highlights the risks government subcontractors face when they choose to wait for a Government audit rather than litigate promptly after a payment dispute arises.

Continue Reading Waiting For the Final Government Audit May Be Too Late

As Congress scrambles in a last ditch attempt to pass a funding proposal to keep the government operating, government contractors face the various employment law implications of potential furloughs caused by a government shutdown. Of particular concern to private employers is how to furlough employees who are exempt from overtime payments under the Fair Labor

Just two days before Donald Trump’s Inauguration, the Federal Acquisition Regulatory Council published a proposed rule to implement Executive Order 13693, Planning for Federal Sustainability in the Next Decade, and certain biobased acquisition provisions of the Agricultural Act of 2014.  The Council characterized the rule as advancing policies put into effect by an interim rule from May 2011, which “established a culture within the Federal acquisition community to. . . foster markets for sustainable technologies and materials, products and services.”  The proposed rule represents a shift in the FAR towards greater alignment with existing government programs that set forth sustainability standards for products and services.
Continue Reading New Policies on Sustainable Acquisition: Among the Last Proposed FAR Rules of the Obama Administration

A new administration will often articulate its approach to the management of executive agencies through the issuance of an executive order.  President Clinton issued E.O. 12866 in the fall of 1993 and set forth both the process of regulatory review and a regulatory philosophy meant to guide executive agencies.  E.O. 12866 placed an emphasis on cost-benefit analysis and data with which the Office of Information and Regulatory Affairs (“OIRA”) was to review agency action.  President Obama, less than two weeks after taking office, announced his intent to adhere to the “fundamental principles and structures governing contemporary regulatory review set out in Executive Order 12866.”  The reinstatement of E.O. 12866 and eventual issuance of the substantially similar E.O. 13563 foreshadowed the Obama Administration’s focus on data and analysis principles that often resulted in industries submitting an ever-increasing amount of information to executive agencies.

A great deal of attention has been placed on agency regulation by President Trump, who has vowed to cut corporate-focused regulations by “75 percent – maybe more.” Although President Trump has yet to release an official approach to managing the administrative state, the new Administration has taken initial steps that seems aimed at reducing regulations.  Further, Congress has taken up the mantle of deregulation by passing two measures in the House that could severely hamper agencies wishing to issue major rulemaking.  However, without an articulated policy of managing executive agencies, it is unclear whether these measures would actually reduce regulation, or simply shift agency focus from major rulemaking to major guidance, leaving industries without a clear sense of the new playing field.
Continue Reading Reining in Regulation: New Year, New Administration, New Confusion

The Labor Department’s Wage & Hour Division (“WHD”) released final regulations implementing mandatory paid sick leave for employees working on federal service, construction, and concessions contracts.  The Labor Department incorporated some changes to the proposed regulations, which we previewed earlier this year, but the final rule still imposes significant obligations on federal contractors and subcontractors.

The costs are likely to come both from the paid sick leave itself (a maximum of seven days per year) and from the layers of complexity on top of contractors’ existing compliance obligations with respect to these types of contracts.  The regulations overlap with WHD’s responsibility for oversight of the Service Contract Labor Standards (commonly known as the Service Contract Act, or “SCA”), which is already a complicated compliance undertaking for employers.  In this post, we summarize the highlights of the final regulations and flag issues for contractors to consider before the regulations take effect in January 2017.
Continue Reading Paid Sick Leave Final Regulations Released

Two years ago, government contractors faced the various employment law implications of furloughs caused by the government shutdown.  Many federal agencies furloughed employees and instructed contractors to implement similar reductions in contract hours.  Despite recent public statements from outgoing Speaker of the House John Boehner that the federal government will not shut down, the continued funding of the government remains an open question, and employers must be aware of the legal consequences of furloughs should a shutdown come to pass.

Of particular concern to private employers is how to furlough employees who are exempt from overtime payments under the Fair Labor Standards Act (“FLSA”).  A misstep could potentially result in an exempt employee being reclassified as non-exempt, which would require the employer to pay the employee overtime wages.  Professional services contractors are particularly at risk, as many of their employees may be working on cost-reimbursable government contracts but be compensated on a salaried basis.

Employers may consider the following potential options for furloughing their exempt employees:

  • Furloughs in full week increments: With certain exceptions, FLSA requires that an exempt employee be paid a full week’s salary in any week in which she performs work. However, there is no requirement that an exempt employee’s salary be paid if the employee has not performed any work for the entire week.  Notably, “no work” must interpreted strictly to preclude any remote work of any kind.  This could even include check e-mail on mobile devices, which could entitle the employee to a full week’s pay.
  • Mandatory leave bank or paid time off deductions: An employer can require its employee to use accrued leave while on furlough.  Once accrued leave is exhausted, the remainder of that furloughed employee’s leave may be without pay, so long as the employee performs no work while on furlough.
  • “Non-temporary” schedule and salary reductions: An employer may reduce an exempt employee’s hours and salary under certain circumstances without converting that employee’s FLSA status to “non-exempt.”  The Tenth Circuit Court of Appeals has opined that an employer may do so if the reduced hours and pay are for a fixed period of at least two months.  See In re Walmart Stores, Inc., 395 F.3d 1177 (10th Cir. 2005); see also Havey v. Homebound Mortgage, Inc., 547 F.3d 158, 166 (2d Cir. 2008) (holding that prospective quarterly pay adjustments did not cause employee to lose exempt status).  However, employers must be mindful that “pervasive manipulation of payments that makes a ‘sham’ of what purports to be salary” may cause loss of exempt status.  In re Walmart Stores, Inc., 395 F.3d at 1188.  Additionally, employers also must ensure that the salary meets the minimum FLSA salary requirements for exempt status (which, in most instances, is $455 per week).
  • Voluntary reduction in hours: An employee may volunteer to reduce her hours and salary. However, her decision must be entirely and completely voluntary.


Continue Reading Beware Of Employment Law Issues Amidst A Potential Government Shutdown

As part of a Labor Day gesture to workers’ groups, President Obama signed an executive order requiring federal contractors to provide their employees with the ability to earn up to 56 hours of paid sick leave each year.  The executive order—the details of which are discussed in this post— could affect some 300,000 workers