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State snapshot

Key considerations
Which issues would you most highlight to someone new to your state?

New Hampshire’s laws on employees and independent contractors are more restrictive than the federal tests, especially since there are two different New Hampshire statutory tests, and each test requires that all of the factors listed in the applicable statute be met in order for a person to be a bona fide independent contractor for that statute’s purpose. 

The New Hampshire statute on notification of non-compete agreements is unique and impacts on how and when non-compete agreements must be presented to new employees. 

The payment of wages is highly regulated in New Hampshire.

What do you consider unique to those doing business in your state?
 

  • In addition to the non-compete notification statute, New Hampshire has a business and commercial dispute court at the trial level, which publishes its decisions on its website, including decisions regarding non-compete and non-solicitation agreements. The most recent decisions of the business court can be found at www.courts.state.nh.us/superior/orders/bcdd/index.htm. Please note that these orders and decisions are subject to appeal to the New Hampshire Supreme Court.
  • Employers in New Hampshire must pay all wages due to each employee within eight days of the end of each working week, unless the employer has written permission from the New Hampshire Department of Labor to pay less frequently than weekly.
  • New Hampshire employers cannot make withholdings or deductions from any employee’s wages unless such withholding or deduction is specifically allowed under New Hampshire law. If paying an employee on a draw-against-commissions basis, employers must comply with RSA 275:42, VII.
  • New Hampshire requires employers with 15 or more employees to have a written safety plan and a joint management and employee safety committee. Information about these requirements can be found at www.nh.gov/labor/inspection/safety-training.htm.
  • Healthcare facilities must have a written policy addressing drug testing and diversion prevention of controlled substances. The policy, which applies to employees, contractors, and agents who provide direct patient care, must include procedures for drug testing, including, at a minimum, testing where reasonable suspicion exists.
  • From August 5 2016 New Hampshire prohibits contractual restrictions on the right of physicians to practice medicine in any geographic area for any period after the physician’s employment, partnership or other professional relationship with the contracting party ends (see RSA 329:31-a).

Is there any general advice you would give in the labor/employment area?

As New Hampshire is a relatively small state, the administrative agencies that enforce its employment-related statutes are also relatively small. This means that they tend to be accessible and willing to offer information to employers that show a willingness to learn and comply with New Hampshire law. In addition, the New Hampshire legislature has been very active in the employment area. New laws on protection of employees who ask about flexible work schedules, employer access to employees’ social media, and protections on employees’ right to discuss their pay with each other are just a few of the areas in which New Hampshire is changing and staying at the cutting edge of employment law. Therefore, it is important to monitor what the state legislature is doing.

Emerging issues
What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalization of marijuana and privacy?

Under the medical marijuana statute, authorized dispensaries have begun to open in 2016. Therefore, New Hampshire will begin to see how the statute affects workplaces and employers’ ability to require drug tests after that time.

Proposals for reform
Are there any noteworthy proposals for reform in your state?

The state legislature has been active in identifying and protecting employees’ rights in the workplace. The non-compete notification statute—the Paycheck Fairness Act of 2014—and a new law that prohibits retaliation against employees who request flexible work schedules are examples of this trend. There also have been attempts to pass laws on restricting employers’ use of credit histories and criminal background checks, but those have not been successful thus far. There was a bill in the last legislative session that would have provided a uniform state law test for independent contractor classification, but the bill failed. The issue is expected to be revisited in 2016.

Employment relationship

State-specific laws
What state-specific laws govern the employment relationship?

New Hampshire Revised Statutes Annotated (RSA), Chapters 273-282-A and 354-A, are the major employment-related statutes.

The New Hampshire Department of Labor enforces Chapters 273-281-A and has regulations at N.H. Admin. Rules Lab.

The New Hampshire Department of Employment Security enforces RSA Chapter 282-A (unemployment insurance) and has regulations at N.H. Admin. Rules Emp.

The New Hampshire Commission for Human Rights enforces RSA Chapter 354-A (Law Against Discrimination) and has regulations at N.H. Admin. Rules Hum.

Who do these cover, including categories of workers?

The laws governing the employment relationship generally apply to all employees, unless otherwise provided therein. For example, RSA chapter 354-A applies to employers with six or more employees only.

Misclassification
Are there state-specific rules regarding employee/contractor misclassification?

Yes—there are two main statutory tests, both of which are stricter than the federal tests. The first is found in the unemployment insurance statute (RSA 282-A:9, III—the “ABC test”), which is enforced by the New Hampshire Department of Employment Security. The second is in several statutes governing wage protection, minimum wage, and workers’ compensation (RSA Ch. 275:42, II; Ch. 279:1, X; and Ch. 281-A:2, VI (b))—all of which are enforced by the New Hampshire Department of Labor.

The “ABC test” states that services performed by an individual for compensation will be deemed employment (for purposes of being subject to the unemployment statute) unless all three of the following factors are met:

  • The individual is free from control or direction over the performance of such services;
  • Such service is either outside the usual course of the hiring entity’s business or performed outside of all the places of the hiring entity’s business; and
  • Such individual is customarily engaged in an independently established trade, occupation, profession, or business (RSA 282-A:9, III).

For purposes of determining whether an individual worker must be covered by the state’s workers’ compensation law, minimum wage statute, and wage protection law, the New Hampshire Department of Labor applies a seven-factor test (all factors must be met to classify as an independent contractor):

  • The person has a federal employer identification number or social security number or, alternatively, has agreed in writing to carry out the responsibilities imposed on employers under state law.
  • The person has control and discretion over the means and manner of performance of the work, in that the result of the work—rather than the means or manner by which the work is performed—is the primary element bargained for by the employer.
  • The person has control over the time when the work is performed and the employer does not dictate the time of performance. However, this does not prohibit the employer from agreeing to a completion schedule, range of work hours, and maximum number of work hours to be provided by the person and, in the case of entertainment, the time such entertainment is to be presented.
  • The person hires and pays assistants, if any, and to the extent such assistants are employees, supervises the details of the assistants' work.
  • The person holds himself or herself out to be in business for himself or herself and has continuing or recurring business liabilities or obligations.
  • The person is responsible for satisfactorily completing work and may be held contractually responsible for failure to complete the work.
  • The person is not required to work exclusively for the employer.

Contracts
Must an employment contract be in writing?

No. Like most states, New Hampshire recognizes the employment at-will doctrine. The general rule is that in the absence of an employment contract for a definite term, either the employer or employee may terminate employment at any time for any reason not prohibited by law, with or without notice. Terms and conditions of employment are generally found in offer letters, written policies, rules, benefit plans, and employee handbooks. However, courts will construe poorly drafted offer letters, policies, and other written policies as binding terms on the employer (Dillman v. New Hampshire College, 150 N.H. 431 (2003), Butler v. Walker Power, Inc., 137 N.H. 432 (1993) and Panto v. Moore Business Forms, 130 N.H. 730 (1988)).

State law does require that certain terms of employment be provided to employees in a written notice signed by the employee at the time of hire. These terms include the employee’s rate of pay, frequency of pay, day and place of payment, and fringe benefits (see in particular the New Hampshire Department of Labor regulations (N.H. Admin. Rules Lab 803.03) on the requirements of providing written notices www.gencourt.state.nh.us/rules/state_agencies/lab800.html).

Are any terms implied into employment contracts?

There is an implied covenant of good faith and fair dealing, but this has rarely been litigated on as a separate cause of action.

Are mandatory arbitration agreements enforceable?

Yes. New Hampshire has a statute that allows mandatory arbitration agreements (RSA Ch. 542) between employers and employees, provided that the agreement specifically states that it is subject to RSA Ch. 542. It is unclear whether this is necessary to ensure the arbitration agreement is enforceable, since there is no case law on the point; but it is prudent to include a reference to the statute in the agreement.

How can employers make changes to existing employment agreements?

If employment is at will, an employer has discretion to change the terms and conditions of employment within its discretion. However, changes to certain features—such as an employee’s rate of pay, incentive pay plans, and fringe benefits (eg, vacation accruals, holiday pay, and sick leave)—will be effective only prospectively. Changes to these features must be set forth in advance in a written notice signed by the employee. If employment is subject to a written employment agreement, the provisions of the agreement will govern how changes can be made to any terms of employment set forth in the agreement.

Hiring

Advertising
What are the requirements relating to advertising open positions?

No state-specific requirements exist, except actions prohibited by the state’s Law Against Discrimination (RSA Ch. 354-A).

Background checks
What can employers do with regard to background checks and inquiries?

(a) Criminal records and arrests

Employers in New Hampshire are generally free to condition offers of employment on the satisfactory results of a criminal records check and to ask about criminal backgrounds on employment applications and in the recruitment process; however, they may ask only about pending arrests and convictions that have not been annulled. Schools, home healthcare agencies, residential care and treatment facilities (including nursing homes), and other entities that offer personal care services regulated by the New Hampshire Department of Health and Human Services are required to conduct criminal records checks when the position involves services or direct access to a vulnerable individual. The state legislature has attempted to restrict employers’ ability to use criminal background checks, but such bills have not been successfully legislated as of August 2015. It is worth monitoring state legislation to identify whether any new bills are introduced in 2016.

(b) Medical history

It is unlawful for any employer to require an applicant or employee to undergo genetic testing or to affect terms of employment based on genetic testing, except in very limited circumstances (RSA 141-H:3).

(c) Drug screening

No state-specific laws restricting or regulating an employer’s ability to impose pre-employment drug screens exist. However, one statute (RSA 151:41) requires healthcare facilities to have a written policy addressing drug testing and diversion prevention of controlled substances. Healthcare facilities include, without limitation, hospitals, doctors’ offices, home healthcare providers, outpatient rehabilitation centers, ambulatory surgical centers, urgent care centers, nursing homes, assisted living facilities, adult day-care centers, and hospice care facilities. The policy, which applies to employees, contractors and agents who provide direct patient care, must include procedures for drug testing, including, at a minimum, testing where reasonable suspicion exists. While not specifically required, pre-employment drug testing should probably be a part of the drug-testing program.

As of 2013, New Hampshire has a medical marijuana law (RSA Ch. 126-X). The law is completely effective now that special dispensaries have begun to open around the state to make prescription cannabis available to qualified patients. The statute states that the law is not to be construed to require “any accommodation of the therapeutic use of cannabis on the property or premises of any place of employment” (RSA 126-X:3, III (c)). Further, the law does not “limit an employer’s ability to discipline an employee for ingesting cannabis in the workplace or for working while under the influence of cannabis” (id.). While these provisions are seen as helpful to employers’ efforts to maintain a drug-free workplace, no case decisions or administrative guidance exists on whether the statute will limit an employer’s rights to refuse employment or terminate the employment of qualified individuals who test positive on employer-mandated drug tests for marijuana, especially pre-employment drug screens.

(d) Credit checks

No state-specific laws exist that restrict an employer’s use of credit checks in the hiring or employment process. However, there have been attempts in the state legislature to restrict this ability. Such bills have not been successfully legislated as of August 2016, but it is worth monitoring state legislation to identify whether any new bills are introduced.

(e) Immigration status

New Hampshire law requires all employers to comply with federal law (RSA 275-A:4-a).

(f) Social media

In 2014, New Hampshire passed a law, under which employers cannot:

  • request or require applicants and employees to disclose login information to their personal social media and electronic accounts; or
  • compel any applicant or employee to add anyone to his or her personal social media or electronic accounts or reduce the privacy settings on such accounts (RSA 275:74).

There are exceptions under the law to allow employers to:

  • monitor employee use of the employer’s social media accounts and electronic systems;
  • conduct certain workplace investigations;
  • obtain access to accounts that were created by virtue of the employment relationship or that were paid or sponsored by the employer; and
  • obtain information about an employee or applicant that is in the public domain.

The law applies to all employers.

(g) Other

If an employer intends to require a new employee to execute a non-compete agreement as a condition of employment, the employer must provide the new hire with a copy of the agreement before the individual’s acceptance of the offer of employment. See the full text of the law below at section 7.3.1.

Wage and hour

Pay
What are the main sources of wage and hour laws in your state?

The majority of wage and hour laws in New Hampshire are contained in RSA Chapters 273-282-A. The most significant chapters are the state’s statutes on:

  • wage protection (RSA Ch. 275);
  • youth employment (RSA Ch. 276-A); and
  • minimum wage (RSA Ch. 279).

These statutes and their corresponding regulations are found at the New Hampshire Department of Labor website at www.nh.gov/labor/laws/index.htm. In addition, New Hampshire has a statutory process for wage garnishment procedures (RSA Ch. 512).

What is the minimum hourly wage?

The minimum wage is $7.25 an hour for most workers or whatever is set forth under the Federal Fair Labor Standards Act.

What are the rules applicable to final pay and deductions from wages?

Employees who are discharged by the employer must be paid all wages earned within 72 hours of discharge. Employees who voluntarily resign must be paid all wages no later than the next regular payday, unless the employee provides at least one pay period’s notice of his or her intention to quit. In such cases, the employer must pay all wages within 72 hours of the resignation date. Employees who are laid off by the employer must be paid all wages no later than the next regular payday. If an employer willfully and without good cause fails to pay all wages when due, the employer will be liable for the wages not paid, plus liquidated damages up to an amount equal to the unpaid wages (RSA 275:44). Any withholding of or deduction from wages must fall within one of the enumerated provisions listed in RSA 275:48 and meet the requirements of such applicable provision. Careful consideration of RSA 275:48 should be made before initiating any wage withholding. An employer’s ability to make deductions from a salaried employee’s pay is restricted (RSA 275:43-b). The New Hampshire statute is more restrictive than the Federal Fair Labor Standards Act’s salaried pay rules for exempt employees, and the state law applies to all salaried employees, whether they are exempt from overtime requirements or not.

Hours and overtime
What are the requirements for meal and rest breaks?

All employers must provide employees with a 30-minute meal break (which can be unpaid) if the employee is scheduled to work for five or more consecutive hours, unless the employee is allowed to eat while he or she works and is paid for such time (RSA 275:30-a).

What are the maximum hour rules?

New Hampshire generally follows standards under the Fair Labor Standards Act; however, state law prohibits discrimination or discipline against any nurse or nursing assistant who refuses to work for more than 12 consecutive hours, except in certain limited circumstances (RSA 275:67). In addition, employers must provide at least 24 consecutive hours off within six days of any Sunday on which the employee is required to work, with some exceptions (RSA 275:32).

How should overtime be calculated?

Generally, New Hampshire follows the Federal Fair Labor Standards Act on calculation of overtime.

What exemptions are there from overtime?

With limited exceptions set forth in RSA 279:21, New Hampshire follows the Federal Fair Labor Standards Act on exemptions from overtime. 

Record keeping
What payroll and payment records must be maintained?

New Hampshire employers must pay all wages due to employees within eight calendar days of the end of the week in which the work was performed (RSA 275:43). If an employer uses a pay period that is less frequent than weekly, or will result in a payday that is more than eight days from the end of the week in which wages are earned, it must obtain written approval from the New Hampshire Department of Labor. The process to apply for such written approval can be found on the New Hampshire Department of Labor’s website www.nh.gov/labor/forms/non-weekly-payment.htm. If obtained, the New Hampshire Department of Labor’s written approval must be maintained with the employer’s regular payroll records. 

Employers must maintain a record of all hours worked by employees who are not exempt under the Fair Labor Standards Act for at least four years (RSA 275:49 and the New Hampshire Department of Labor’s administrative rules (Admin. Rules Lab 803.03)). Such time records must show the time when work began and ended, including any bona fide meal periods. If the employer alters entries on time records completed by employees, the employee must sign or initial the changed record. Time records must support individual pay sheets; payroll sheets, in turn, must support canceled checks or cash receipts. 

Employers cannot make use of automated or electronic time keeping programs that can be altered by an employer without the knowledge of the employee or that do not clearly indicate that a change was made to the record.

Every employer must—at the time of hiring and before making any changes—notify each employee in writing as to his or her rate of pay or salary (whether by day, week, biweekly, semi-monthly, or yearly), if he or she is to be paid by commission, the day and place of payment, and the specific methods used to determine wages due. The employee must sign such notices. If an employer has any policies or established practices regarding fringe benefits (e.g., paid vacations, holidays, sick leave, bonuses, severance pay, personal days, and reimbursement of employees’ expenses), employees must be provided with a written or posted detailed description of such practices and policies (N.H. Admin. Rules Lab 803.03) on the requirements of providing written notices www.gencourt.state.nh.us/rules/state_agencies/lab800.html).

Payroll records must show all compensation paid to employees, whether in the form of hourly wages, salary, bonuses, commissions, or severance pay. Employers must provide employees with pay stubs that show all deductions made from wages.

New Hampshire’s unemployment insurance rules (Admin. Rules Emp 303.05) require payroll records to be maintained for six years from the end of the calendar year in which the wages were paid or due to the employee.

Discrimination, harassment and family leave

What is the state law in relation to:
Protected categories

(a) Age?

Covered employers may not discriminate on the basis of age against any applicant or employee who is 18 years of age or older (RSA 354-A:7).

(b) Race?

State law follows federal standards under Title VII of the Civil Rights Act of 1964 (RSA Ch. 354-A).

(c) Disability?

State law follows federal standards under the Americans with Disabilities Act (RSA Ch. 354-A).

(d) Gender?

State law follows federal standards under Title VII of the Civil Rights Act and the Equal Pay Act (RSA Ch. 354-A and RSA 275:37 (as amended)).

(e) Sexual orientation?

State law prohibits discrimination based on “sexual orientation,” which is defined as orientation of heterosexuality, bisexuality, or homosexuality (RSA Ch. 354-A).

(f) Religion?

State law follows the federal standards under Title VII of the Civil Rights Act (RSA Ch. 354-A).

(g) Medical?

In addition to the prohibition on discrimination based on disabilities found within RSA Chapter 354-A, employers are required to provide employees who have work-related injuries or illnesses with temporary alternative work duties while the employee is recovering, so that the employee can return to work (RSA 281-A (workers’ compensation law)). Such employees also have a right to job reinstatement up to 18 months from the date of their injury or illness onset.

(h) Other?

RSA Chapter 354-A (also referred to as the Law Against Discrimination) is the main anti-discrimination statute in New Hampshire and is enforced by the New Hampshire Commission for Human Rights. It prohibits discrimination based on:

  • age;
  • sex;
  • race;
  • color;
  • marital status;
  • physical or mental disability;
  • religious creed;
  • national origin; and
  • sexual orientation.

The statute applies to employers with six or more employees, but excludes social clubs and fraternal and religious entities that are not organized for private profit.

In February 2016 the New Hampshire Supreme Court ruled for the first time that individual employees can be held personally liable for aiding and abetting discrimination and harassment in the workplace or engaging in retaliatory conduct under RSA Chapter 354-A. Thus, any employee (executive, manager, or co-worker) can be held liable under the Law Against Discrimination for damages, including the plaintiff’s lost earnings, attorneys’ fees, and compensatory damages which, under RSA Chapter 354-A, are not subject to caps (as are compensatory damages under Federal discrimination laws).

New Hampshire has an equal pay law (RSA 275:37, as amended by the Paycheck Fairness Act of 2014) which is enforced by the New Hampshire Department of Labor.

State law prohibits discrimination on the basis of marital status (RSA Ch. 354-A). As of September 9 2014, New Hampshire law also prohibits employment discrimination and retaliation against an individual because he or she is a victim of domestic violence, harassment, sexual assault, or stalking (RSA 275:71 and :72).

Beginning September 1 2016, retaliation is prohibited against any employee solely because the employee requests a flexible work schedule. While the law does not require any employer to accommodate a flexible work schedule, nor does it impose liability for refusing to provide a flexible work schedule at an employee's request, employers must be careful not to take any negative action against an employee because they have made the request for a flexible schedule. The law is intended to prevent employment-related stigmas attaching to employees who are looking for flexible work arrangements.

Harassment
What is the state law in relation to harassment?

State law follows the federal standards under similar anti-discrimination laws (RSA Ch. 354-A) in connection with what constitutes unlawful harassment in the workplace.

Family and medical leave
What is the state law in relation to family and medical leave?

Covered employers must provide female employees with a leave of absence for the period of temporary physical disability due to pregnancy, childbirth, or related medical conditions (RSA 354-A:7, VI(b)). When the female employee is physically able to return to work, she must be provided with her original job or a comparable position, unless business necessity makes this impossible or unreasonable.

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

Like most states, New Hampshire has a statute regulating wiretapping and eavesdropping (RSA Ch. 570-A) which prohibits the recording or interception of any telecommunication or oral communication unless otherwise allowed under the statute. Unlike certain other states’ wiretap statutes, New Hampshire law requires the consent of all parties to the communication in order for the recording or interception to be legal (provided that it does not meet one of the exceptions set forth in the statute). 

Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

Yes. Under a law passed in 2014, employers cannot:

  • request or require applicants and employees to disclose login information to their personal social media and electronic accounts; or
  • compel any applicant or employee to add anyone to his or her personal social media or electronic accounts or reduce the privacy settings on such accounts (RSA 275:74).

There are exceptions under the law to allow employers to:

  • monitor employee use of the employer’s social media accounts and electronic systems;
  • conduct certain workplace investigations;
  • obtain access to accounts that were created by virtue of the employment relationship or that were paid or sponsored by the employer; and
  • obtain information about an employee or applicant that is in the public domain.

The law applies to all employers.

Bring your own device
What is the latest position in relation to bring your own device?

New Hampshire has no specific laws on this matter. Therefore, generally, employers can establish bring your own device policies.

Off-duty
To what extent can employers regulate off-duty conduct?

Employers are prohibited from requiring as a condition of employment that any employee or applicant for employment abstain from using tobacco products outside the course of employment, as long as the employee complies with workplace policies restricting indoor smoking (which policies are required by RSA 155:64-77)( RSA 275:37-a).

In addition, under a law passed in 2014, employers cannot:

  • request or require applicants and employees to disclose login information to their personal social media and electronic accounts; or
  • compel any applicant or employee to add anyone to his or her personal social media or electronic accounts or reduce the privacy settings on such accounts (RSA 275:74).

There are exceptions under the law to allow employers to:

  • monitor employee use of the employer’s social media accounts and electronic systems;
  • conduct certain workplace investigations;
  • obtain access to accounts that were created by virtue of the employment relationship or that were paid or sponsored by the employer; and
  • obtain information about an employee or applicant that is in the public domain.

The law applies to all employers.

Gun rights
Are there state rules protecting gun rights in the employment context?

No.

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?

New Hampshire has no state-specific rules that deviate from the majority of other states with respect to IP rights on works created by employees. Employers are strongly advised to have employees sign written agreements or acknowledgements that any developments they create in the course of employment or that are related to the employer’s business are “works for hire” and become the employer’s property. Such agreements should also contain an assignment of developments clause in which the employee consents to the assignment of any rights to the development to the employer. New Hampshire also has enacted the Uniform Trade Secrets Act (RSA 350-B) which prohibits the misappropriation of trade secrets.

Restrictive covenants
What types of restrictive covenants are recognized and enforceable?

New Hampshire courts have long held that restrictive covenants are valid and enforceable if the restraint is reasonable, given the particular circumstances of the case (Technical Aid Corp. v. Allen, 134 N.H. 1, 8 (1991). To determine reasonableness, the covenant must meet the following standards:

  • The restriction must be no greater than necessary to protect the legitimate business interests of the employer.
  • The restriction must not impose an undue hardship on the employee.
  • The restriction must not be injurious to public interest.

An employer’s legitimate business interests typically include trade secrets and confidential information. Employers also have a legitimate interest in prohibiting a former employee from competing for actual customers, clients, or patients existing at the time employment ended. However, this interest generally extends only to those areas in which the employee had actual client or customer contact or significant knowledge about such clients or customers. With limited exceptions, New Hampshire courts will find covenants that restrict a former employee from soliciting business from the employer’s entire customer base as overly broad and therefore unreasonable and unenforceable, unless the former employee is a high-level sales executive, senior administrator, or other key employee who had:

  • “unfettered access” to all of the employer’s technical, financial or customer information; or
  • “intimate knowledge” of the employer’s customer base, market trends and opportunities, and pricing structure (Syncom Indus., Inc. v. Wood, 155 N.H. 73 (2007) and ACAS Acquisitions (Precitech) Inc. v. Hobert, 155 N.H. 381 (2007)).

Employers can also protect their relationship with their employees. Typically, non-solicitation of other employees (sometimes referred to as anti-poaching clauses) are deemed reasonable, especially if the solicitation results in the employer losing key employees who possess valuable skills and knowledge and in whom the employer has invested significant costs to train. However, the mere cost associated with recruiting and hiring employees not in a position to appropriate goodwill or sensitive information is not a legitimate interest protectable by a restrictive covenant (National Employment Serv. Corp. v. Olsten Staffing Serv., Inc., 761 A.2d 401 (N.H. 2000)). 

If a New Hampshire court finds that a provision in a restrictive covenant agreement is unenforceable as written, then the court may apply the “blue pencil” rule of partially enforcing or reforming the provision to the extent that it is reasonable, provided that the employer acted in good faith when executing the agreement, and that the agreement was supported by adequate consideration (Granite Investment Advisors, Inc. v. Timm, No. 2013-CV-00094 (March 28 2013)).

Non-compete
Are there any special rules on non-competes for particular classes of employee?

Yes. Under a new law which took effect on August 5 2016, any contract or agreement which establishes the terms of a partnership, employment, or any other form of professional relationship with a physician licensed to practice in New Hampshire may not include any restriction to the right of such physician to practice medicine in any geographic area for any period after the termination of such partnership, employment, or professional relationship. Such restriction will be void and unenforceable. However, the remaining provisions of any such contract or agreement will not be invalidated. The requirements of this new law (found at RSA 329:31-a) apply to new contracts or renewals of contracts entered into on or after August 5 2016.

New Hampshire has a unique statute, which was amended in 2014, requiring notification of non-compete agreements. As originally enacted in July 2012, this statute (RSA 275:70) required all New Hampshire employers, regardless of size, to disclose non-compete and non-piracy agreements before or concurrent with making an offer of employment or change in an employee’s job classification. While the law validated the best practice of making sure to attach any such agreement to an offer of employment letter before a new hire accepts the offer, the wording of the statute caused concern and confusion among businesses and legal practitioners, especially regarding its effect on employers’ ability to impose non-compete agreements on existing employees. Therefore, as of July 28 2014, the statute’s original wording was repealed and replaced with the following: 

“Any employer who requires an employee who has not previously been employed by the employer to execute a noncompete agreement as a condition of employment shall provide a copy of such agreement to the potential employee prior to the employee’s acceptance of an offer of employment. A noncompete agreement that has not been disclosed to an employee as required by this section shall not be enforceable against the employee, but all other provisions of any employment, confidentiality, nondisclosure, trade secret, intellectual property assignment, or any other type of employment agreement or provision shall remain in full force and effect.” (RSA 275:70).

Labor relations

Right to work
Is the state a “right to work” state?

No.

Unions and layoffs
Is the state (or a particular area) known to be heavily unionized?

Overall, New Hampshire is not heavily unionized in the private sector. However, public employees (e.g., police, firefighters, teachers, and other government employees) are unionized.

What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?

New Hampshire has a Worker Adjustment and Retraining Notification (WARN) Act, which is different from the federal WARN Act (RSA Ch. 275-F). 

Separate from the WARN Act, employers are required to report any anticipated temporary or permanent layoff of 25 or more individuals to the New Hampshire Department of Employment Security (RSA 282-A:45-a and Administrative Rule EMP 302.13).

Discipline and termination

State procedures
Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

No state-specific laws on this topic apply to private employers.

At-will or notice
At-will status and/or notice period?

New Hampshire, like most other states, recognizes the at-will employment doctrine. The general rule is that in the absence of an employment contract for a definite term, either the employer or employee may terminate employment at any time for any reason not prohibited by law, with or without notice. Employers that wish to preserve the at-will status should be careful not to require employees to provide any specified amount of notice of resignation, since this would be inconsistent with the at-will rule (i.e., that either party can terminate the relationship with or without notice).

What restrictions apply to the above?

Exceptions to the at-will rule are extensive. In addition to anti-discrimination statutes, New Hampshire recognizes the common law claim of wrongful discharge when a former employee proves that:

  • his or her discharge from employment was motivated by bad faith or malice, or was based on retaliation; and
  • the discharge was contrary to a public policy.

What constitutes a public policy is typically the focus of wrongful discharge cases in New Hampshire. The federal district court for New Hampshire denied an employer’s motion for summary judgment on the plaintiff’s wrongful discharge claim, finding that a rational jury could find that, among other things, public policy encouraged the plaintiff to complain to her managers that their changes to training and staffing procedures had endangered patient safety (Grivois v. Wentworth-Douglass Hospital, Civil No. 12-CV-131-JL, Opinion No. 2014 DNH 017 (Jan. 28 2014)). However, an employee’s disagreement over an internal management decision or established company practice usually will not constitute a matter of public policy (Bourque v. Town of Bow, 736 F. Supp. 398 (D.N.H. 1990); Short v. Administrative Unit No. 16, No. 88-226 (N.H. Aug. 14 1992)). 

New Hampshire also has its own whistleblower protection statute. Employers are prohibited from terminating employees or otherwise retaliating against them because the employee reported what he or she reasonably believed was a violation of any law or rule or refused to engage in any conduct that he or she reasonably believed was a violation of law (RSA Ch. 275-E). Before bringing a claim to the New Hampshire Department of Labor under this statute, the employee must show that he or she first made a reasonable effort to maintain or restore his or her rights through any grievance procedure or similar process available at such employee's place of employment. An employee may also sue an employer in court for violation of the statute.

New Hampshire recently enacted the Paycheck Fairness Act of 2014, which prohibits employers from discriminating or retaliating against employees for disclosing their pay information to other employees. In addition, this law prohibits employers from requiring employees to agree to refrain from disclosing such information. The act will become effective on January 1 2015.

Final paychecks
Are there state-specific rules on when final paychecks are due after termination?

Yes. Employees who are discharged by the employer must be paid all wages earned within 72 hours of discharge. Employees who voluntarily resign must be paid all wages no later than the next regular payday, unless the employee provides at least one pay period’s notice of his or her intention to quit; in such cases, the employer must pay all wages within 72 hours of the resignation date. Employees who are laid off by the employer must be paid all wages no later than the next regular payday (RSA 275:44).