Showing posts with label Mark Fijman. Show all posts
Showing posts with label Mark Fijman. Show all posts

Wednesday, August 16, 2017

JURY VERDICT IN “TOP CHEF” UNION EXTORTION TRIAL “TAKES THE CAKE”



"If the law supposes that," said Mr. Bumble, squeezing his hat emphatically in both hands, "the law is a ass - a idiot".
Oliver Twist – Charles Dickens (1838)

In a surprising turn of events, a federal jury in Boston has found members of the Teamsters Union not guilty on charges of extortion in an ugly case of union hardball tactics against the production crew and cast of the television show “Top Chef” while the show was filming in Boston in 2014.

I first wrote about this case in 2016 following the federal indictment of members of Teamsters Local 25 and one member entering a guilty plea to extortion.  Prior to finding the union members not guilty of extortion in attempting to force the show to hire non-union workers, the jury had been instructed by U.S. District Judge Douglas Woodlock that the prosecution had the burden of proving that the four Teamsters didn’t just want to replace non-union workers with union workers, but were instead trying to force Top Chef to hire Teamsters for truck-driving work the show neither wanted nor needed.  The judge further instructed jurors that replacing non-union workers would be a legal and legitimate labor objective.  Attorneys for the Teamsters had argued to the jury that the union members could not be convicted on federal extortion charges, even if they had made threats, if they had legitimate labor objectives in mind. To put this in perspective, let’s look back at my original post on the case, in which the Teamster Union’s tactics were described:

From the picket line outside the Milton restaurant, the members of Local 25 screamed racist, sexist and homophobic threats and slurs for hours as production crew and cast came and went.  Some of the worst conduct was directed toward the show’s host. When Lakshmi arrived at the scene, one of the union members rushed her car and screamed “We’re gonna bash that pretty face in, you f***ing whore!”  Local 25 members picketed the restaurant, physically roughed up members of the production crew, and slashed the tires of fourteen production workers.   In responding to local media reports of the incident at the time, a Local 25 spokeswoman stated, “As far as we’re concerned, nothing happened.”

U.S. Attorney William Weinreb expressed disappointment in the jury’s verdict. “The government believed, and continues to believe, that the conduct in this case crossed the line and constituted a violation of federal law. The defendants’ conduct was an affront to all of the hard-working and law-abiding members of organized labor. We will continue to aggressively prosecute extortion in all its forms to ensure that Boston remains a safe and welcoming place to do business.”

It bears mention that prior to the trial, an indicted official of Local 25 pled guilty to federal extortion charges in connection with union threats of physical violence and production disruption against the cast and crew of the top-rated culinary reality show.

In light of the egregious and undisputed facts of the union’s conduct, and the apparent strength of the government’s case at the time of the indictment, the not guilty verdict comes as a surprise.  The Northeast is a more union-friendly environment, and it is possible that may have had some influence on the jury.  As noted in my original post, there also was a local political angle.  However, if the existing labor law, as given to the jury in their instructions,  permits the type of thuggish behavior shown in this case, it begs the question of what conduct would be not be permitted?



Sunday, August 6, 2017

The Ugly Truth: Are Your Employee Handbook Policies and Non-Compete Agreements a Recipe for Litigation?


    I.     INTRODUCTION
    A question often asked by employers is whether they are legally required to have an employee handbook, and the answer is “no.”  A much better question to ask is whether it is a good idea for employers to legally protect themselves with a well-drafted and up-to-date employee handbook, and the answer to that question is a clear and definitive “yes.”  
    A good employee handbook provides a road map for your company, and introduces employees to your culture, mission and values.  It should clearly and concisely communicate your policies, procedures and expectations to your employees and provide guidance to your supervisors.  In the event of employment litigation, what you have in your handbook as far as reporting harassment or discrimination, accommodating disabilities or religious beliefs, granting leave under the FMLA, or wage and hour issues, could make the difference between prevailing in a lawsuit, or having to pay an adverse judgment.
    However, recent changes in how federal agencies interpret existing employment law, combined with outdated, poorly drafted or “boilerplate” policies, can turn your employee handbook into a recipe for costly litigation.  Likewise, a poorly drafted non-compete agreement that is found to be unenforceable, can result in the loss of business, customers and trade secrets.  Learning the “ugly truth” about these issues can go a long way in avoiding even uglier litigation. 
    II. EMPLOYEE HANDBOOKS
    A. Ugly Truth #1:  The Best Employee Handbook in the World Will Not Prevent a Lawsuit (but a Bad One Could Help the Plaintiff Win).
    Every business is different, and there is no “one-size-fits-all” employee handbook.  Your handbook should directly reflect how your company actually operates, its culture and its expectations. As such, avoid using a handbook you found on the internet that contains provisions and policies that have nothing to do with your business or contains rules you will not actually follow or enforce. Revise or replace outdated handbooks.  Keep your handbook concise, avoid legal terminology and use language that your employees will understand.  The basics of what you should include are as follows:
    Include an At-Will Disclaimer.
    Mississippi is an at-will employment state, as is the case in most states.  At-will employment means the employee works for the employer at the employer’s will.  The employer may terminate the employment relationship for good reason, bad reason, or no reason at all.  Likewise, the employee can terminate the relationship at any time.  However, in the case Bobbitt v. The Orchard, Ltd., 603 So. 2d 356 (Miss. 1992), the Mississippi Supreme Court held that if a handbook contains detailed policies and procedures to be followed when terminating an employee, it can create an employment contract, destroy the at-will relationship, and expose an employer to a breach of employment contract claim if the employer did not follow its own procedures in terminating the employee.  However, if the handbook disclaimer expressly provides that the employment relationship is at-will and can be terminated at any time, the employer has not waived the right to unilaterally terminate the employee by setting forth a grievance process in the manual.
    The disclaimer should be clear and conspicuous. Disclaimer language should also be included in all other documents given to the employees, such as job applications, profit sharing plans, and memoranda regarding employment benefits.
    The language should make clear that the employee’s employment is terminable at will, and that nothing in the handbook should be construed to alter the at-will relationship.  Avoid “contract-like” language.
    The disclaimer should express that nothing in the handbook should be construed as creating a contractual relationship or as implying a guarantee of continued employment or benefits.  Use “may” and avoid “will” or “shall” or any language that suggests the company is promising to do something or confer specific benefits.  
    The disclaimer should make clear that the employee handbook provides only general guidelines as to company policy and should not be read as including the fine details of company policy or procedure.  The employee should be directed to appropriate management personnel for more information regarding particular policies.  
    Handbook language should reserve the company’s right to change, modify, supplement or revoke its policies at any time, with or without notice to the employee.  Although employers should keep employee handbooks up to date to accurately reflect company policy, disclaimer language should caution employees that changes in policy are not dependent upon the changes being reflected in a revised handbook. 
    Equal Employment Opportunity Statement and Anti-Discrimination / Harassment /Retaliation Policy.
    Statement that employer will comply with applicable federal and state law and provide equal employment opportunity without regard to race, color, religion, gender, sexual orientation age, national origin, disability, sexual orientation, veteran status or any other protected category.
    Definitions of discrimination, harassment, retaliation.
    Requirement that employees report to his/her supervisor or HR any complaints of unlawful conduct, without fear of retaliation.
    Specific reporting instructions, that allow employee to bypass supervisors who may be the source of the unlawful conduct.
    Statement as to company’s investigatory process for complaints and corrective/disciplinary action for unlawful conduct.
    Effective policy can provide valuable legal defense.
    Include policy regarding consensual workplace romantic relationships.
    Americans With Disabilities Act (“ADA”).
    Prohibits discrimination and ensures equal opportunity and access for persons with disabilities.  The ADA also requires employers to provide reasonable accommodations, i.e., changes to the workplace or job -- to allow employees with disabilities to do their jobs.  The ADA, like other federal employment statutes, anticipates an interactive process between the employee and the employer to reach a reasonable accommodation, and for this reason, it needs to be in your handbook so that your employees are made aware of the need to initiate the process with their employer.
    Pregnancy Discrimination Act (“PDA”).
    The PDA amended Title VII of the Civil Rights Act of 1964 to "prohibit sex discrimination on the basis of pregnancy."  The Act covers discrimination "on the basis of pregnancy, childbirth, or related medical conditions."
    Family Medical Leave Act (“FMLA”).
    The FMLA entitles eligible employees of covered employers to take up to twelve weeks of unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.
    Fair Labor Standards Act (“FLSA”).
    The FLSA establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.
    Uniformed Services Employment and Reemployment Rights Act (“USERRA”).
    Protects the right of employees to be reemployed in their civilian job if they leave that job to perform service in the military service and protects service members from employment discrimination and/or retaliation based on their military service.
    Code of Conduct / Discipline Policy.
    Outline acceptable workplace conduct, and unacceptable conduct that will result in disciplinary action, up to and including termination.  In listing examples of unacceptable conduct, e.g. theft, false reporting of time worked, threats of violence, make it clear that it is not an exclusive or complete list.  While the policy should retain the right to use warnings or progressive discipline at the discretion of the employee, it also should state that an employee may be subject to immediate termination for inappropriate conduct or violations of workplace policies.   
    Benefits.
    Outline policies and eligibility regarding vacations, 401(k), health insurance, paid leave or other benefits to employees. 
    Include Handbook Acknowledgment Form.
    A common claim by plaintiffs in employment litigation is that they were unaware of the workplace policy that they violated, or that they had never seen or been given a copy of the employee handbook.  Every handbook should include an acknowledgment form to be signed by the employee, attesting that they have received a copy of the handbook, acknowledging their responsibility to read and comply with the policies contained in the handbook, including any future revisions, and acknowledging their at-will employment status.  This can be done using a hard copy form to be put in the employee’s personnel file, or in the case of a handbook that is on-line or on the company’s intranet, it can be a digital form which the employee electronically signs.  A signed copy of an acknowledgment form can be a valuable exhibit when a plaintiff claims in a deposition that he was never given a handbook or had no knowledge of the policy which he violated and which resulted in his or her termination.
    Train Your Managers / Inconsistent Enforcement Can Result in Discrimination Claims.
    Don’t assume that your managers and supervisors will always act in accordance with the policies in your handbook.  Make sure they receive regular training on handbook policies so that they are implemented correctly and effectively.  Once trained, management and supervisors should periodically review handbook policies to assess whether they are being applied consistently.  Inconsistent enforcement of policies could result in claims of discrimination. 
    B. Ugly Truth #2:  Many Commonly Utilized Handbook Policies Now Expose Employers to Liability Courtesy of the National Labor Relations Board (“NLRB”).
    The National Labor Relations Board (“NLRB”) is the federal agency responsible for enforcing labor law in relation to union election, collective bargaining agreements between unions and employers, and unfair labor practices.  Unbeknownst to many employers, the National Labor Relation’s Act’s (“NLRA”) prohibition against unfair labor practices also extends to non-union employers. 
    In recent years, the NLRB has taken a highly aggressive position against many commonly utilized employee handbook policies.  The NLRB alleges that overbroad employment policies could have a chilling effect on employees’ concerted activities protected by Section 7 of the NLRA. Generally speaking, there is protected concerted activity when two or more employees act together to improve their terms and conditions of employment.  Employees have a right to advocate in this manner even where there is no union involved.  Under the NLRB’s recent interpretive guidelines, an employer’s policy will violate the NLRA if it could simply be “construed” as restricting Section 7 rights. 
    On this basis, the NLRB has been asserting unfair labor practice complaints against employers across the country for handbook policies that are commonly utilized.  Examples of handbook policies that the NLRB finds could be construed as restricting Section 7 rights include the following:
    Policies against “personal business” on company property and “while at work.” 
    [NLRB Position:  The prohibition against conducting “personal business” on company property and “while at work” can reasonably be read to restrict the communications of employees with each other about union or other Section 7 protected rights in non-work areas and on non-work time.]
    No "[d]efamatory, libelous, slanderous or discriminatory comments about [the Company], its customers and/or competitors, its employees or management.
    [NLRB PositionEmployees have the Section 7 right to criticize or protest their employer's labor policies or treatment of employees.  Thus, rules that can reasonably be read to prohibit protected concerted criticism of the employer will be found unlawfully over broad.]
    Policies against employees discussing or disclosing wages.
    [NLRB PositionEmployees have a Section 7 right to discuss wages, hours, and other terms and conditions of employment with fellow employees, as well as with nonemployees, such as union representatives.]
    "You must not disclose proprietary or confidential information about [the Employer, or] other associates (if the proprietary or confidential information relating to [the Employer's] associates was obtained in violation of law or lawful Company policy)."
    [NLRB Position:  “Although this rule's restriction on disclosing information about "other associates" is not a blanket ban, it is nonetheless unlawfully overbroad because a reasonable employee would not understand how the employer determines what constitutes a "lawful Company policy."]
    On the same basis, the NLRB also has been filing unfair labor practice complaints against employers’ because of their social media policies that impose discipline on employees for disparaging comments made about their employers or supervisors on their personal Facebook pages or other social media.
    There has been an expectation among employers that with a new administration, and with the NLRB soon to have its full complement of Republican members, that the Board might relax its position.  However, as recently as late April 2017, an NLRB judge ruled against Verizon Wireless, ordering it to strike ten of its employee handbook policies on the basis that they violated the NLRA because they could be construed in such a way to “chill” an employee’s right to engage in protected concerted activity.
    In another recent case, the United States Court of Appeals for the Second Circuit in New York affirmed the NLRB’s controversial ruling against Whole Foods’ policy against employees from making workplace recordings.  The Second Circuit agreed with the NLRB’s position that the rule could be construed as blocking workers from recording activity protected by the National Labor Relations Act.
    The NLRB has published guidelines to assist employers in drafting handbook provisions that will withstand scrutiny, but the difference between what the NLRB considers a lawful handbook policy and what it considers an unfair labor practice is fairly subtle.  Some points to consider:
    Have your policy acknowledge the law.  One way to ensure that your handbook/social media policy is not considered invalid on its face is to include protective language which states the policy will be applied and enforced consistent with the NLRA and any other applicable local, state or federal laws.
    Avoid overly broad language.  While employers may want to have a policy that would address every conceivable situation that might arise, such a strategy runs the risk of being considered invalid under the NLRA.  
    Have handbook policies reviewed for legal compliance.
    Review Internet/social media policies yearly.  Social media and its technology is constantly changing, and the statutory and case law governing its use in the workplace is also evolving.  It is wise to make sure employment policies keep pace.
    C. Ugly Truth #3:  Not Reasonably Accommodating the Religious Beliefs of Employees Can Be Unreasonably Expensive.
    In any handbook, there will always be some generally applicable rules, such as dress and grooming policies or work schedules, that have the potential to raise a conflict with an employee’s religious belief or practice.  Title VII of the Civil Rights Act of 1964 places a duty on the employer to engage in an interactive process with the employee, to reach a reasonable accommodation that does not impose an undue hardship on the employer.  For this reason, a handbook should contain language stating that reasonable accommodation for religious beliefs or practices may be sought, and the procedures for making such a request.  Generally, these issues are relatively easy to address.  When not handled correctly, they can be costly.  This is illustrated in two recent cases.
    In EEOC v. Consol Energy, Inc., (N.D. W.Va) an employer’s use of a high-tech device to stay in compliance with the Fair Labor Standards Act (“FLSA”) resulted in a large dollar jury verdict in a religious discrimination case brought by the EEOC. 
    Consol operated a coal mine in West Virginia, and utilized a biometric hand scanning system to track employee work hours for purposes of payroll and FLSA compliance.  One employee, Christian Beverly Butcher, told his supervisor that he could not comply with the hand scanning policy because he believed the technology has a connection to the “mark of the beast” and the Antichrist, as alluded to in the Book of Revelation in the New Testament of the Bible.
    As a proposed reasonable accommodation, the company offered to allow Butcher to scan his left hand with his palm up, which he declined. Butcher resigned, stating that he was doing so involuntarily. He brought his complaint to the EEOC, which filed suit on his behalf against the company, alleging that Consol had violated Title VII by failing to reasonably accommodate Butcher’s sincerely held religious beliefs.
    A federal judge in West Virginia denied Consol’s effort to have the lawsuit dismissed, and a jury later ruled in Butcher’s favor and awarded $150,000.00 in compensatory damages.  The EEOC later filed a post-trial motion seeking an additional $413,000 in front and backpay. 
    The other case involves a very expensive flu shot.  In EEOC v. Saint Vincent Health Center (W.D. Pa.), the EEOC sued a Pennsylvania hospital on behalf of six employees over its mandatory seasonal flu vaccination requirement.  The lawsuit alleged that the employees were terminated because the hospital refused to accommodate their religious objections to the vaccinations.  The case did not go to trial but the hospital ended up paying a $300,000 settlement and entering into a consent decree requiring changes to their policies and requiring mandatory training for supervisors as to accommodating religious beliefs.
    D. Ugly Truth #4:  Gun Policies Can Be a Loaded Legal Issue.
    In light of incidents of workplace violence nationwide, many employers have handbook policies that ban employees from having firearms on company property, including in their vehicle in the parking lot.  However, in Mississippi, this creates a tension with a state law, and it already has resulted in litigation.  Miss. Code Ann. § 45-9-55 provides in part, that:
    [A] public or private employer may not establish, maintain, or enforce any policy or rule that has the effect of prohibiting a person from transporting or storing a firearm in a locked vehicle in any parking lot, parking garage, or other designated parking area.
    The law does provide an exception where: 
    A private employer may prohibit an employee from transporting or storing a firearm in a vehicle in a parking lot, parking garage, or other parking area the employer provides for employees to which access is restricted or limited through the use of a gate, security station or other means of restricting or limiting general public access onto the property. (emphasis added).
    However, employers need to be aware that courts have taken a very strict interpretation of this statute, and that to have such a policy under the exception, the employer has to strictly comply with the access restrictions described in the statute.
    It bears mention that it is completely within an employer’s rights to prohibit employees from having guns on their persons in the workplace.  The lesson here for employers, is that if you want to have a handbook policy prohibiting employees from having access to firearms in their vehicles, you have to have or build the restrictive structures required under the statute.
    E. Ugly Truth #5:  Prepare for the Inevitable Cyber-Breach!
    It is now common to read news stories about big companies being hacked, and the personal information of customers and employees being stolen.  The reality is that any size company can be a target and the result can be costly.  So what does this have to do with employee handbooks?  The cyber security firm Experian Data Breach Resolution estimates that about 80% of the breaches they service can be traced to employee negligence.  Employees need to be made aware of your company’s internal network security.  Some points to include:
    Employees should use strong passwords that are not shared and regularly changed.
    Phishing -- Employees should not trust emails asking for sensitive information even if an email appears to come from a reliable or authoritative source and unknown attachments or links should not be opened.
    No downloading of unauthorized software or apps on company computers or devices.
    USB and other non-company devices should be prohibited or screened for security issues before being plugged into a company machine.
    Parameters for accessing and sharing of company data. 
    Dangers of unsecured networks/public Wi-Fi.
    BYOD policies should reflect employer’s cyber security policies.
    Any suspected breach should be reported immediately and reporting protocols should be clear.
    While not something that needs to be included in an employee handbook, employers should be aware that many states have laws that require the reporting of cyber breaches if it results in the compromise of the personal information of customers, employees or others.  For example, in Mississippi, notice requirements are governed by Miss. Code. Ann. § 75-24-29 (Persons conducting business in Mississippi required to provide notice of a breach of security involving personal information to all affected individuals), and in Louisiana, it is governed by RS 51:3071 (Database Security Breach Notification Law).  
    DTSA Whistleblower Language.
    In 2016, President Obama signed into law the Defend Trade Secrets Act of 2016 (“DTSA”), allowing businesses nationwide to file suit in federal court to protect their trade secrets from unscrupulous former employees and dishonest business competitors. The law passed with strong bipartisan support in Congress.  Prior to the enactment of the DTSA, companies were limited to seeking relief in state courts, where the law can vary from state-to-state. DTSA contains an immunity provision to protect individuals from criminal or civil liability for disclosing a trade secret if it is made in confidence to a government official or to an attorney for the purpose of reporting a violation of law.
    However, to take full advantage of the protections provided employers under the law, the DTSA places an affirmative duty on employers to provide employees notice of the new immunity or “whistleblower” provision in “any contract or agreement with an employee that governs the use of a trade secret or other confidential information.”  Failure to provide this notice will prevent a company from being able to recover exemplary damages and attorneys’ fees in any lawsuit brought under the DTSA. In anticipation of the future need to exercise rights under the DTSA, employers should immediately begin integrating such language into company documents such as, but not limited to, employment agreements, independent contractor agreements, employee handbooks, offer letters, non-compete/non-solicitation agreements, non-disclosure/confidentiality agreements, invention and assignment agreements, and return of property agreements.
    III. NON-COMPETE AGREEMENTS
    F. Ugly Truth #6:  A Completely Unenforceable Non-Compete Agreement Can Be Effective . . . Right Up Until It Actually Needs to Be Enforced.
    A non-compete agreement is pretty self-explanatory.  It’s an agreement between an employer and an employee, where the employee agrees not to work for a competitor or start his own competing business for a set period of time after leaving his employment with the company.  Employers often require employees to sign non-compete agreements at the start of their employment to protect against a former employee gaining a competitive edge through inside knowledge of their former employer’s trade secrets, customer lists, marketing plans or other confidential information.  It’s estimated that 40% of American workers have been subject to a non-compete agreement at some time in their work history.  
    Non-compete agreements usually also contain non-solicitation provisions, where former employees agree not to contact their former customers, or try to hire their former co-workers for a set period of time.  Non-compete agreements also usually contain confidentiality agreements, where the former employees agree to not disclose or utilize their former employer’s trade secrets or other confidential or proprietary information.
    The dirty secret of non-competes is that even unenforceable agreements can be effective, because the average employee who signs one at the beginning of their employment, along with the other pile of papers they are handed, assumes it is enforceable, and abides by its terms.  The real trouble occurs when a valuable former employee, who can do real damage to your business and customer base, quits and goes to work for a competitor.  That is a bad time to find out whether or not you can enforce your non-compete agreement.
    In Mississippi and most other states, these type of “restrictive employment covenants” are generally not favored, because they are a restraint on free trade, but will be enforced by the courts if the terms of the agreement are reasonable under the particular circumstances.  Generally, there are three requirements:  (1) the employer has a valid business interest to protect; (2) the geographic restriction is not overly broad; and (3) a reasonable time limit is given.  The employer bears the burden of proving the reasonableness of the agreement.  The reason these types of agreements are construed very narrowly is that most courts recognize that an employer is not entitled to protection against ordinary competition from a departing employee.”
    So what is a “valid business interest” that an employer is entitled to protect with a non-compete agreement?  In Mississippi, examples of protectable business interests include trade secrets, confidential information, proprietary information, customer lists, vendor relationships, business practices, and the employer's investment in training and education of an employee.  Mississippi courts have enforced covenants not to compete when former employees who, like Banks, have peculiar knowledge of and relationships with the employer's customers and vendors. 
    When is a geographic restriction reasonable and when is it overly broad?  It depends on the business and the circumstances.  For some companies, restricting a former employee from competing in a three county area may be a reasonable restriction to protect the company’s valid business interests, and restricting the former employee from competing anywhere in the state of Mississippi would clearly be unreasonable.  However, in the instance of an internet-based tech company that has a nationwide customer base, a much larger geographic restriction might be reasonable under the circumstances.  In Mississippi, time restrictions from one to two years will almost always be enforceable.
    Non-compete agreements are typically governed by state law, which can vary depending on where you live or operate a business.  For instance, in the state of Georgia, a non-compete agreement will be enforced only if the employee possesses selective or specialized skills, abilities, customer contacts, customer information, and confidential information that that they have obtained as the result of working for the company. In Tennessee, Texas and Maryland, such agreements are enforceable only against employees who had access to or were entrusted with the employer’s trade secrets or other confidential or proprietary information.  In other states, such as California, non-compete agreements are generally unenforceable.
    Courts are reluctant to enforce non-compete agreements if they deprive a former employee of the ability to make a living, especially if the employee is a low level employee without any access to trade secrets or confidential information.  This was illustrated a few years ago by the sandwich shop chain Jimmy John’s.  Jimmy John’s attracted some unwelcome attention by requiring low-level employees to sign two-year non-compete agreements as a condition of employment.  After the story first broke nationally, Congressional Democrats sent a letter to the Federal Trade Commission (“FTC”) and the U.S. Department of Labor (“DOL”), describing the restrictive covenants as “clearly anti-competitive and intimidating to workers.”  The House Democrats asked for the FTC and the DOL to investigate the sandwich chain.
    The Attorney General of Illinois subsequently filed a lawsuit against Jimmy John’s, alleging the sandwich maker’s non-compete agreements were illegal under Illinois law “[b]y locking low-wage workers into their jobs and prohibiting them from seeking better paying jobs elsewhere, the companies have no reason to increase their wages or benefits.”  Under Illinois law, non-compete agreements must be premised on a legitimate business interest and narrowly tailored in terms of time, activity and place.  The State of New York was apparently about to take similar legal action, however, Jimmy John’s reached an agreement with New York’s Attorney General, in which the sandwich chain agreed to stop including sample non-compete agreements in the hiring packets it sends to its franchisees.  In addition, the company subjected itself to a lot of bad publicity.  Illinois’s Governor subsequently signed into law the “Illinois Freedom to Work Act”, which went into effect on January 1, 2017.  The Act prohibits employers from requiring employees to sign non-compete agreements if they make less than $13 per hour.
    In most matters involving the successful enforcement of non-compete agreements, the employees in question were either highly trained individuals in technical or creative fields, with direct access to their employer’s trade secrets, or were high level sales people with similar access to confidential customer information.  It is a very unlikely scenario where a fast food employer would legitimately need to have a crew worker enter into a non-compete agreement, no matter how good the sandwich.  So, in crafting an enforceable non-compete agreement, here are some points to remember:
    Be realistic.
    Pointless to have a low level unskilled employee sign a non-compete.
    Non-compete agreements should be confined to key employees, sales people or executives whose knowledge of trade secrets and other confidential information, or their relationships with customers, could cause serious damage if they went to work for a competitor.
    “What is our business, and what are we really trying to protect?” – Narrowly tailored non-compete agreements are more effective and more likely to be enforced by the court.
    Articulate valid business interests to be protected in a way that is rational and reasonable as opposed to vindictive retribution against former employees.
    Non-solicitation provisions and who owns social media?
    Pay attention to differences in state law.
    Non-compete / trade secret litigation very expensive – Actual damage?
    G. Ugly Truth #7:  Ignoring a Non-Compete Agreement Can Get You Sued.
    Not surprisingly, when a company finds out that a competitor has hired a former employee, they want to take legal action in support of the non-compete agreement signed by the former employee.  However, oftentimes, those very same companies can be very casual about wanting to hire top performers who formerly worked for their competitors, and who also are subject to a non-compete agreement.  This can expose the company to a lawsuit for tortious interference with contract.  To prove such a claim, the other company would have to show (1) the acts were intentional and willful; (2) their acts were calculated to cause damage to its lawful business; (3) the acts were done with the unlawful purpose of causing damage and loss, without right or justifiable cause; and (4) actual damage and loss resulted.”  Before you hire that employee, here are a few important steps to take:
    Expressly ask the prospective employee if they are subject to a non-compete agreement or any other restrictive covenant from their former employer, and obtain a copy for legal review.
    Any offer letter or employment contract to be signed by the employee should contain a statement attesting that they are not bound by a restrictive covenant.
    A statement attesting that they have not retained any confidential information from their former employer and will not utilize or disclose any such information during the course and scope of their employment with your company.
    IV. CONCLUSION
    Employee handbooks and non-compete agreements are valuable tools in effectively running your company and protecting your valid interests.  Careful attention to tailoring both to your particular business is the best way to avoid a recipe for litigation.

Tuesday, June 27, 2017

Employers Welcome the Return of DOL Wage and Hour Opinion Letters



The U.S. Department of Labor has announced it will reinstate the issuance of opinion letters by its Wage and Hour Division. The announcement by U.S. Secretary of Labor Alexander Acosta is a welcome development for employers, who had previously relied on these interpretive opinions in deciphering and complying with the oftentimes confusing requirements of the Fair Labor Standards Act (“FLSA”).
An opinion letter is an official, written opinion by the Wage and Hour Division of how a particular law applies in specific circumstances presented by an employer, employee or other entity requesting the opinion. The letters were a Division practice for more than 70 years until being discontinued in 2009 by the Obama administration, and replaced in 2010 by more generalized interpretations, as opposed to the highly fact specific opinion letters. 
“Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” said Secretary Acosta. “The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities so employers can concentrate on doing what they do best: growing their businesses and creating jobs.”

The Wage and Hours Division has established a webpage where employers can request an opinion letter or review other agency guidance regarding FLSA compliance.

Friday, February 17, 2017

Smells like a Lawsuit . . . Odor Sensitivity under the ADA


An Illinois federal judge has rejected an employee’s disability discrimination lawsuit, in which the employee claimed her employer failed to reasonably accommodate her odor sensitivity as required under the Americans with Disabilities Act (“ADA”).  While employers have a legal duty to reasonably accommodate such a disability, this case highlights that there is a limit.
As noted in the U.S. District Court’s opinion in Alanis v. Metra, Plaintiff Elda Alanis had worked for the company for approximately ten years, when she experienced difficulty breathing in the workplace, and claimed not to be able to speak, and would only communicate via text message or on handwritten notes. 
Alanis took FMLA leave and following a psychological evaluation, ultimately returned to the workplace with a diagnosis of fragrance sensitivity.  Among Alanis’s multiple accommodation requests was for “a fragrance-free workplace.” 
 In response, the company agreed to take actions to reduce workplace odors, which included changing the cleaning solutions in the restrooms, instructing staff to use only the approved cleaning solutions, instructing staff to refrain from wearing strong fragrances, and moving Alanis’s workspace to a cubicle farther away from the refrigerator and microwave (one source of the odors she was complaining about). Alanis also was instructed to promptly notify the company if any other fragrance issues arose.  The company also granted Alanis’s requests for a relaxed dress code, not having to talk while symptomatic, and rest breaks away from her work station, but did not agree to all the accommodations sought by Alanis. 
 In dismissing Alanis’s ADA failure to accommodate claim, the District Court noted that the ADA only requires an employer to make reasonable accommodations to a disabled employee’s limitations, and employer are not required to provide the particular accommodation that an employee requests. Instead, the employer may choose what accommodation to provide, so long as it effectively accommodates the employee’s limitations.  The District Court held the company’s accommodations in regard to Alanis were reasonable:
 
Once Metra learned that the changes it made to accommodate Alanis did not eliminate her symptoms, Metra invited Alanis to notify it of any odor issues contemporaneously so that the source could be investigated. When Alanis did report an issue, Thomas intervened on Alanis’s behalf and reminded the relevant staff member of the fragrance-free workplace requirement. The record shows that Metra made reasonable efforts to provide (and police where necessary) the accommodations it agreed to provide Alanis. That Metra could not guarantee a fragrance-free environment for Alanis does not constitute an adverse action

The District Court’s ruling is line with similar cases around the county in which ADA claims were dismissed because a an employee’s request for a fragrance-free or odorless workplace was held to be unreasonable and not feasible.
Fragrance or odor sensitivity clearly qualifies as disability.  The Equal Employment Opportunity Commission takes the position that under the ADA, an employee may be disabled if a workplace odor causes asthma or causes an otherwise normal reaction or allergy to become severe.  Finding a reasonable and realistic accommodation is best accomplished through engaging in an interactive discussion with the employee. 
·         Depending on the position and job responsibilities, allowing the employee to telecommute or work from home might be a reasonable accommodation.
·         For employees who are sensitive to certain workplace odors, changing their workplace/office locations to an area of less exposure could be a reasonable accommodation. Workplace odors triggering a medical condition also may be more generalized, such as the odors from copy machines or printers or from cleaning products.
·         A perfume/cologne free policy can be a reasonable accommodation. While other employees may find it unreasonable, wearing perfume or cologne in the workplace is not a protected right.






Wednesday, January 4, 2017

THE $300,000 FLU SHOT


While getting a flu shot may result in a temporarily sore arm, a Pennsylvania hospital is feeling some significant financial pain in its bank account after settling a lawsuit over its mandatory flu shot policy. 
As first reported here back in October 2016, the Equal Employment Opportunity Commission (“EEOC”) has filed lawsuits nationwide against healthcare facilities which require that their employees receive seasonal flu vaccines.  The EEOC’s position is that such policies violate Title VII of the Civil Rights Act (“Title VII”) by failing to accommodate the religious beliefs of healthcare employees.
 
As previously reported, one of the hospitals being sued by the EEOC was Pennsylvania-based Saint Vincent Health Center.  On December 23, 2016, Saint Vincent agreed to settle the EEOC lawsuit for $300,000, which includes back pay and compensatory damages to six former employees who were fired for failing to comply with the hospital’s policy.  The settlement also requires offers of reinstatement to the six employees, and includes a consent decree requiring injunctive relief.
To recap the facts of the lawsuit, the EEOC alleged that in October 2013, Saint Vincent implemented a mandatory seasonal flu vaccination requirement for its employees unless they were granted an exemption for medical or religious reasons. Under the policy, employees who received an exemption were required to wear a face mask while having patient contact during flu season in lieu of receiving the vaccination. Employees who refused the vaccine but were not granted an exemption by the Health Center were fired. 

From October 2013 to January 2014, the six employees identified in the EEOC’s lawsuit t requested religious exemptions from the flu vaccination requirement based on sincerely held religious beliefs, and the Health Center denied their requests. When the employees continued to refuse the vaccine based on their religious beliefs, they were terminated. In its lawsuit, the EEOC stressed that during the same period, the hospital granted fourteen (14) vaccination exemption requests based on medical reasons while denying all religion-based exemption requests.

Under the consent decree, if Saint Vincent chooses to require employee influenza vaccination as a condition of employment, it must grant exemptions from that requirement to all employees with sincerely held religious beliefs who request exemption from the vaccination on religious grounds unless such exemption poses an undue hardship on the Health Center's operations, and it must also notify employees of their right to request religious exemption and establish appropriate procedures for considering any such accommodation requests.
The decree also requires that when considering requests for religious accommodation, the Health Center must adhere to the definition of "religion" established by Title VII and controlling federal court decisions, a definition that forbids employers from rejecting accommodation requests based on their disagreement with an employee's belief; their opinion that the belief is unfounded, illogical, or inconsistent in some way; or their conclusion that an employee's belief is not an official tenet or endorsed teaching of any particular religion or denomination. The decree further requires that Saint Vincent provide training regarding Title VII reasonable accommodation to its key personnel and that it maintain reasonable accommodation policies and accommodation request procedures that reflect Title VII requirements.

Does this mean mandatory vaccination policies at healthcare facilities are prohibited?  According to the EEOC’s Philadelphia District regional attorney, Debra M. Lawrence:
While Title VII does not prohibit health care employers from adopting seasonal flu vaccination requirements for their workers, those requirements, like any other employment rules, are subject to the employer's Title VII duty to provide reasonable accommodation for religion.  In that context, reasonable accommodation means granting religious exemptions to employees with sincerely held religious beliefs against vaccination when such exemptions do not create an undue hardship on the employer's operations.

However, reasonably accommodating healthcare employees who have direct contact with patients may be easier said than done.  According to the Centers for Disease Control and Prevention, the flu is highly contagious and people with flu can spread it to others up to about 6 feet away. Most experts think that flu viruses are spread mainly by droplets made when people with flu cough, sneeze or talk. These droplets can land in the mouths or noses of people who are nearby or possibly be inhaled into the lungs. Less often, a person might also get flu by touching a surface or object that has flu virus on it and then touching their own mouth or nose. 
While the effects of the flu on most people are not life-threatening, the CDCP notes that severe cases of the flu can result in death for some people, such as the elderly, young children, and persons with certain health conditions, including weakened immune systems.  The consent decree does allow Saint Vincent to adopt on-the-job precautions to avoid the transmission of the flu to its patients by employees who have been granted a religious exemption.




Monday, November 28, 2016

SURPRISE RULING ON FLSA OVERTIME RULE


It continues to be a season of surprises in American politics . . . and in employment law.  Who would ever have thought that a federal judge, appointed by President Obama, would throw a money wrench in a key initiative of the Obama Department of Labor?  Not me.  As I incorrectly predicted in my November 18, 2016 article, I fully expected U.S. District Judge Amos L. Mazzant III to shoot down an injunction aimed at blocking the December 1, 2016 implementation of the DOL’s Final Rule, bumping the minimum salary level for white collar exemptions under the Fair Labor Standards Act ("FLSA") from $23,660 annually ($455 per week) to $47,476 annually ($913 per week).

What instead happened was that Judge Mazzant entered a nationwide preliminary injunction on November 22, 2016, blocking for now the U.S. Department of Labor (“DOL”) from implementing significant changes to the overtime rules applicable to white collar employees.  The ruling out of the U.S. District Court for the Eastern District of Texas held that the DOL most likely exceeded its authority by doubling the salary requirement, which would have rendered essentially meaningless the duties test, which is actually written into the FLSA.

The issuance of an injunction means that implementation and enforcement of the Final Rule by the DOL is just on hold until further notice by the Court.  The DOL has not yet announced whether it intends to appeal the ruling, and it remains to be seen if the Trump administration would have any interest in trying to implement a Rule so unpopular within the business community.  Another potential option might be a revised Rule that would include a smaller increase in the minimum salary requirement.

What I think I did get correct was my observation that “[i]f the unlikely actually happens, I expect an enormous sigh of relief from many employers, tinged with annoyance and aggravation over six months spent preparing for a rule that never went into effect.”  Annoyance aside, what should employers do at this point? 

In expectation of the December 1, 2016 deadline, many employers had bumped employee salaries to meet the new requirement, and many more had simply adjusted hour wages and work schedules in an effort to reduce overtime or keep actual wages approximately the same.  As reported in the Wall Street Journal, businesses are now faced with the difficult decision of either walking back pay increases they had already put in place, resulting in angry employees, or eating the expense of changes made in anticipation of a now uncertain requirement.

There is no right or wrong answer, and employers will have to look at a number of factors in making their decision for their particular business.  These factors include, but are not limited to: (1) whether the employer has already begun implementation of salary/exemption changes, (2) whether the employer has already communicated planned salary increases or changes even if it hasn’t actually put them in place, (3) whether the changes impact or potentially impact the company’s benefit plans, (4) the overall economic impact of the change to the client, (5) the workforce morale issues that may be implicated, (6) the temporary nature of the injunction and the fact that it could be appealed and, if so, potentially reversed on appeal.  This is an odd situation where those employers who planned ahead are faced with more issues than those companies that procrastinated and did nothing.


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