Over the weekend, The New York Times ran a surprising (at least to me) article about how Idaho has implemented a legal framework that gives employers a great deal of flexibility in an area getting a good deal more publicity of late: Non-compete agreements. (H/T to a post by Suzanne Lucas in Inc. too.)

When everyone has a non-compete agreement, what problems does that cause? Lots, according to the article:

For the most part, states have been moving toward making it easier for people to switch teams, but Idaho went the other direction with legislation that was friendlier to employers. The resulting law was particularly strict because it put the onus on employees to prove that they would not harm their former employers by taking the new jobs.

Proponents note that the statute applies only to “key employees” who tend to have more responsibility and better pay. But employment lawyers say Idaho companies tie down all levels of workers, not just top executives, with tough employment contracts.

Contrast that with California, which bans nearly all types of non-compete agreement, and lately, Massachusetts, and suddenly, Connecticut’s laws on non-compete agreements look downright moderate.

Indeed, for now at least, Connecticut employers have a good deal more flexibility on non-compete agreements that in other areas of employment law.

In fact, I was reminded of this when I looked back on a post from 2014 that noted the same thing — also in response to an article from The New York Times. It seems back then, the newspaper was also bemoaning the increasing use of non-compete agreements. Hmm.

In any event, employers in Connecticut should be mindful of this edict from the courts from 40 years ago that still rings true today:

In order to be valid and binding, a covenant which restricts the activities of an employee following the termination of his employment must be partial and restricted in its operation “in respect either to time or place, … and must be reasonable—that is, it should afford only a fair protection to the interest of the party in whose favor it is made and must not be so large in its operation as to interfere with the interests of the public. The interests of the employee himself must also be protected, and a restrictive covenant is unenforceable if by its terms the employee is precluded from pursuing his occupation and thus prevented from supporting himself and his family.

Back in May, I talked about how data privacy was becoming a bigger issue for companies. Included in that, is the notion that human resources will play a key role in protecting information.

Today comes work of a massive coordinated effort by Chinese hackers to seek personal information on tens of thousands of government workers.  The New York Times lead article for today states:

Chinese hackers in March broke into the computer networks of the United States government agency that houses the personal information of all federal employees, according to senior American officials. They appeared to be targeting the files on tens of thousands of employees who have applied for top-secret security clearances.

The article goes on to note that private companies, particularly those in the defense industry, have continued to see an increase in cyber attacks on items such a personnel data.

In Connecticut, there are hundreds of government contractors and subcontractors who work on defense contracts.  But there are many more that remain a target as well.

There should be little doubt now that the personal information about your employees remains an at-risk area for companies.

I’ll have details soon on a symposium coming this fall on data privacy and workplace issues. For now, save the date of October 16h and watch this space for more information.

 

The New York Times this morning has an article that suggests that non-compete agreements are being used increasingly in a broader array of jobs.

Pick your fights carefully

His evidence? Well, the article doesn’t cite that.

Though, to the reporter’s credit, in noting the discussion going on in Massachusetts over legislation on the topic, he cites to a trade group’s executive vice president who said, “The ban to noncompetes is legislation in search of an issue.”It quotes one professor as saying “There has been a definite, significant rise in the use of noncompetes, and not only for high tech, not only for high-skilled knowledge positions.”

Connecticut went through this same discussion last year. Indeed, a watered-down bill restricting the use of non-compete agreements passed the Connecticut General Assembly last year.  But Governor Malloy vetoed it stating that the bill left “certain key terms undefined or unclear.”

“As a result” he added, “this bill has the potential to produce legal uncertainty and ambiguity in the event of a merger or acquisition. If I signed into law, costly and time-consuming litigation would likely be required to provide necessary clarity.”

Thus, Connecticut is still following the “common law” when it comes to non-compete agreements — that is, the law that has been developed through court cases over the years.  Even the Connecticut Law Tribune suggested that such a path may be the right one for the state:

Noncompetition agreements have a valid place in today’s economy, but their growing use to stifle healthy marketplace competition, their theoretical underpinnings as a strained corollary to the employment at-will rule and the disproportionate bargaining strength often used by employers to obtain them have infected these contracts with a taint of inherent unfairness and commercial impropriety. There is a need for reform—reform carried out through the process of common law evolution.

The governing principles of noncompete agreements in Connecticut have been fairly well-settled.  As one court stated nearly 40 years ago:

In order to be valid and binding, a covenant which restricts the activities of an employee following the termination of his employment must be partial and restricted in its operation “in respect either to time or place, … and must be reasonable—that is, it should afford only a fair protection to the interest of the party in whose favor it is made and must not be so large in its operation as to interfere with the interests of the public.  The interests of the employee himself must also be protected, and a restrictive covenant is unenforceable if by its terms the employee is precluded from pursuing his occupation and thus prevented from supporting himself and his family.

What does that mean for employers? Ultimately, it means creating a non-compete that is narrowly tailored to protect a legitimate business interest. Having all employees — from your senior vice president to the mail clerk — sign the same agreement with the same restrictions may prove to be its undoing.

There are, of course, exceptions to the rule — security guards, for example. California bans them.  Other states, like Georgia, have statutory restrictions on them.

So before you seek to enforce your non-compete agreement, check with local counsel first to make sure it’s going to pass muster.

 

Over the last few weeks, I’ve been seeing more tweets from human resources types and mainstream reporters using the phrase “wage theft”.  Two recent examples? William Tincup (who runs the popular online DriveThruHR show that I appeared on a while ago) recently tweeted:

And The New York Times labor reporter, Steven Greenhouse yesterday tweeted:

Yes, even The New York Times Editorial Board is beginning to use the term with surprising carelessness suggesting “law enforcement officials” (a term typically reserved for police officers, not Department of Labor officials) routinely use it.

It’s time for employers to beware this phrase and fight its usage because, in my view, it’s really an attempt to turn something often unintentional, into something nefarious and intentional.

Or as Mandy Patinkin’s character in The Princess Bride said: You keep using that word. I do not think it means what you think it means.

What DO I mean? Well, think of the word, “theft” and most of us think of the intentional taking of something that belongs to someone else. Like your jewelry, or your iPhone. Even your company’s trade secrets.

Continue Reading “Wage Theft”: The Trendy Phrase That May Not Mean What You Think It Means

For those of us that have been practicing for a while, it had seemed that the days of the big settlements for race discrimination cases were behind us.

After all, when the Coca-Cola and Texaco settlements were announced back in the late 1990s and 2000, many companies took notice.

But the news today is a reminder for employers that the risks still remain.

The New York Times reported this morning that Merrill Lynch has agreed to pay $160M to settle claims of race discrimination.  The monies will reportedly be available to all black brokers and trainees employed at the company since May 2001.

It is one of the largest settlements for a discrimination case ever reported.  (The Texaco and Coca-Cola suits reportedly settled for $176M and $192.5M.)

There is little doubt this case will be analyzed in the weeks and months ahead for the facts and legal theories presented.

For now, however, the case ought to serve as a reminder to employers that race discrimination claims are not yet behind us as a society and that employers need to be vigilant in ensuring that its anti-discrimination policies are followed.

Merrill Lynch has such a policy, but as the settlement shows, a policy is only as good as the enforcement behind it.

 

In Tuesday’s The New York Times, an article (that, as of Monday evening was one of the lead pieces on the NYTimes.com website) argues that age discrimination continues to exist in society and that it is hitting the baby boomers particularly hard.  (Indeed, the article’s tag is “for-laid-off-older-workers-age-bias-is-pervasive”.)

I do not challenge the assertion that age discrimination continues to exist in certain parts of society.  The statistics quoted in the article do undermine the article’s assertion though because the unemployment rate for 55-64 year olds is 5.4 percent (compared with 7.4 percent) for the general population.  I’ll leave it for others to debate what the statistics mean.

But the article does make one blind assertion that should not go unchallenged.

First, the background: The U.S. Supreme Court in 2009 changed the standard of proof needed to establish an age discrimination case to a “but for” standard.  As I noted back then, however, I didn’t think we’d see a huge shift in age discrimination cases.  Yes, it might make it a little more difficult for an employee to prove his or her case, but it wouldn’t change how many cases are handled — particularly in states that have their own anti-discrimination statutes.

Indeed, a recent article suggests that courts haven’t made much of a shift in how they handle ADEA claims in the wake of the Supreme Court’s ruling.  And another article for an ABA conference suggests that the practical impact of the decision has been “vastly overstated.”

But try telling that to the Times. Indeed, it goes on to make a remarkable, uncredited assertion: “Since the Supreme Court ruling, most lawyers won’t even take age discrimination cases.”

Most lawyers? From where does the Times get this assertion? It fails to say. It provides no statistics, no cite, no quote to support this.  Nothing.

A look at the EEOC filing statistics doesn’t support this. Indeed, the statistics fail to show any significant drop off of age discrimination cases after the Supreme Court’s ruling.

In Fiscal Year 2009, there were 22,778 charges filed. In the next year, there was actually an increase to 23,264 claims filed.  By FY 2012 (the last available statistics), there were still 22,857 claims filed — a lesser amount is, in part, to be expected as the economy improves.

Now, admittedly, the charges don’t account for claims that were filed with an attorney’s assistance. But if “most lawyers” won’t take age discrimination cases anymore, wouldn’t you expect to see a significant dropoff?

NELA – the National Employment Lawyers Association — continues to put forward CLE programs discussing how to advance ADEA claims even with the Supreme Court’s decision.  So, even the group that represents employees the most isn’t throwing in the towel.

So, where did the Times get this assertion from? I’ve hunted for a source but have yet to find one.

So, I turn to you readers.  What do you think? Is The New York Times correct in its assertion? Or is this a case for the Times’ Ombudsman?

 

Yesterday, The New York Times — about a gazillion years after this blog and other employment law blogs talked about it ad nauseum — wrote their definitive piece entitled on how “federal regulators” are “ordering employers to scale back policies that limit what employees can say online.”

The headline?  “Even If It Enrages Your Boss, Social Net Speech Is Protected.”

Are you scared yet? Hopefully not, because if you’ve been following this blog at all, you know that such pronouncements are misguided and overblown.

That’s not to say that you shouldn’t review your policies to make sure that they are appropriately tailored. And that’s not to say that you shouldn’t exercise caution before firing an employee who just said something about someone at work on Facebook. 

But, it is far past the time when we should treat each pronouncement or each article on social media as this huge development that requires employers to change everything time and again.

Social media — like the telephone, fax machine or e-mail before it — is now just another communications tool that is here to stay in one form or another.   If you don’t get it yet or look at those who use it with disdain, you’re simply missing out on a tool that can be useful to your employees and to you.   The one billion people who use Facebook aren’t suddenly going to wake up tomorrow and decide that its not useful.    

Let me give you a real-world example outside the workplace and how I’m convinced that social media is for everyone now.

Continue Reading The Last Post About Social Media & Employment Law Ever. (Maybe.) (Not Really.)

Back in 2010, at the same time the U.S. Department of Labor was making a big publicity push on its interpretation of rules regarding unpaid interns, the New York Times ran piece noting how employers were skirting the law when it came to internships:

The Labor Department says it is cracking down on firms that fail to pay interns properly and expanding efforts to educate companies, colleges and students on the law regarding internships.

“If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law,” said Nancy J. Leppink, the acting director of the department’s wage and hour division.

The biggest problem, according to the article is that the employer should derive “no immediate advantage” from the intern’s activities — “in other words, it’s largely a benevolent contribution to the intern.”  The takeaway from this article, as I said back in 2010 is that employers should not use interns to do real work. 

Flash-forward to 2012. The New York Times over the weekend ran another piece on internships. This time, however, it was critical of employers who only assigned the interns menial tasks.

Although many internships provide valuable experience, some unpaid interns complain that they do menial work and learn little, raising questions about whether these positions violate federal rules governing such programs.

So, within the span of two years, you have two articles on internships: One critical of employers that assign unpaid interns real work and one critical of employers that assign unpaid interns menial work.

What’s an employer to do?  

Well, I talked quite a bit about this on Thursday on The Proactive Employer radio show and there were really two solutions (you can listen to the entire broadcast below).

First, if you’re going to have interns do real work, you can do so — you just need to pay them minimum wage.  Second, if keeping interns unpaid is important, it’s critical that employers follow six criteria outlined by the U.S. Department of Labor. 

The articles in The New York Times are well-timed to make sure that employers are aware of their obligations.  What I said back in 2010 holds true today: “As the summer season approaches, employers are now on notice that their use of interns is going to be under closer scrutiny than ever before. ”

 

The New York Times loves spotting trends. Here’s the latest: Workplaces are moving from smoke-free to "smoker-free" places, particularly in the health care arena. 

I hate to break it to The New York Times, but this is far from new. Indeed, nearly three years ago, I blogged about it, noting "there’s been a lot of talk of late of a "trend" beginning where employers are taking stock of employees health habits, particularly smoking." And two years ago, I noted that some towns were considering larger smoking bans

And I highlighted a huge issue for employers in Connecticut — one that is conspicuously absent from the Times’ piece: There are "smokers" rights laws that prohibit many employers from taking action against their employees based on their smoking habits.

Conn. Gen. Stat. 31-40s is fairly clear about smokers’ "rights" and that employers or agents of the employer cannot make no smoking a condition of employment. Specifically, the law states:

No employer or agent of any employer shall require, as a condition of employment, that any employee or prospective employee refrain from smoking or using tobacco products outside the course of his employment, or otherwise discriminate against any individual with respect to compensation, terms, conditions or privileges of employment for smoking or using tobacco products outside the course of his employment, provided any nonprofit organization or corporation whose primary purpose is to discourage use of tobacco products by the general public shall be exempt from the provisions of this section.

The only notable exception to this broad restriction is that the limits do not apply to firefighters and police officers, for the most part.

Note that the restrictions also apply to compensation or other "privileges" of employment. Thus, employers in Connecticut that want to get on the "wellness" bandwagon and start restricting employees from smoking outside the workplace or provide rewards to employees that do not smoke, ought to think twice and conform any programs with the legal requirements.

(H/T Ohio Employer’s Law Blog)

In Monday’s New York Times, there’s a lengthy piece about how companies in the United States are slowly joining cloud computing.  The concerns about the use of cloud computing are not new, but companies are still grappling with how to address those concerns:

Now cloud providers are trying to bring these types of flexible services to the more conservative and lucrative world of large corporations. Although most large companies have taken their first cautious steps into the cloud, many are anxious about data failures and slow delivery of data over a network. They also fear that their confidential information could be vulnerable on another company’s systems, out of their control.

To alleviate those concerns, Google held a daylong conference last week called Atmosphere at its Mountain View, Calif., headquarters, selling its cloud computing services — like e-mail and business software — to executives of large corporations.

I’ll be talking about cloud computing and the impact it is having on employers at the ABA Technology in the Practice & Workplace Committee Midwinter Meeting next week in New York.  While not giving away any secrets about the presentation, I can tell you that we’ll be discussing the fact that there still isn’t a lot of guidance in this area and that coming up with a "best practices" list is still a challenge.

But as the New York Times article also discusses, there are many advantages that employers can take advantage of so long as the risks are understood and addressed.  We’ll try to provide some practical suggestions for employers during this presentation. 

It’s not too late to sign up. Hope to see you there.