Connecticut Employment Law Blog : Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

Have you taken steps to prevent your business from walking out the door? That issue -- and the overall use of restrictive covenants will be the subject of today's free webinar at noon. You can sign up here. 

Our monthly webinar series (after taking the holiday period off) runs on the second Wednesday of each month. 

In our past webinars, attendees have asked if we could post the presentation materials ahead of time.  You can view those materials here.

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There were signs this morning that the economy is starting to pick up again. If that continues to happen, there is no doubt that we'll start to see many more employees changing jobs to take advantage of new opportunities.

But as that happens, some of those employees' employers will be left scratching their head and asking: How can I protect my clients, customers and confidential data from walking out the door?

What's one possible solution? Restrictive Covenants are typically contract provisions that restrict an employee from competing with your business, soliciting clients or employees, or using trade secrets in their new business.  They take many shapes and sizes but overall, courts will give them serious consideration if they are reasonable in time and scope.

Our monthly webinar series returns in February (after a holiday absence) to discuss this very issue and how employers can draft restrictive covenants that will hold up in court.  My fellow partners, Jon Orleans and Rick Robinson have agreed to spearhead this production and should be both educational and entertaining.

It will be held on February 10, 2010 at 12 noon EST.  Sign up through this link (and, as always, it's free). 

The monthly webinars will continue on the second Wednesday of each month at noon. If you have any suggestions on topics that you'd like to hear, please feel free to drop me a line. 

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Employment law is quite the hot topic among various blogs. So much so that it's time for the next installment of Quick Takes -- a quick summary of what's new and noteworthy.

• Don't miss the Ohio Employer's Law Blog's post on how NOT to fire an employee. In the post, Jon Hyman describes how an employer took an already difficult situation and made it worse.  Lesson from Jon: Do not do layoffs or firings via e-mail. Period.
   
• World of Work continues the focus on the new COBRA subsidies with a link to FAQ by the Department of Labor.  A new blog, Compliance Building, has information from the IRS also about the new COBRA subsidies. 
   
• The Employee Free Choice Act is expected to be introduced into Congress soon. For what its worth, one union leader is predicting passage by August, according to a post by the Pennsylvania Labor & Employment Blog.   And although the EFCA has been recapped extensively by this blog and others, the Labor & Employment Law Blog has one more here. 
   
• If there was really a remaining question about whether a plaintiff's Facebook postings were discoverable, a recent court finding out of Canada suggests the answer: Yes.  (Delaware Employment Law Blog)
   
• Richard Hayber, over at the Connecticut Employee Rights Blog points out a recent case by a federal appeals court that holds that releases of future claims in last chance agreements are invalid.   While the case isn't binding in Connecticut, Richard clearly believes that the same concepts could be applied by a Connecticut court.
   
• My former colleague, Richard Tuschman from the Florida Employment Law Blog, highlights a case in which a common question is raised: Does hiring an employee who has a non-compete agreement from a competitor constitute "tortious interference" (and subject that new employer to a claim)? The answer? Maybe not, but there are still other claims to worry about.

And on the lighter side, don't miss this fun post by the Delaware Employment Law Blog recapping the top 10 excuses for being late to work.

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I'm not sure where I heard it first, but I was once told that there federal employment laws to worry about, and then there are California's employment laws to worry about.  Indeed, California acts like a country of its own when it comes to several laws.

For employers in Connecticut with California-based employees (whether in sales, manufacturing or otherwise) an important decision released earlier this month reinforces that notion.  In striking down a non-compete law, the California courts have re-emphasized that restrictive covenants in California are unlikely to be upheld.

Several blogs have the details including Wage Law, Employer Law Report and Labor & Employment Law Blog.   L&ELB has the concise summary:

In Edwards v. Arthur Andersen LLP, the California Supreme Court reaffirmed California's strong public policy against covenants not to compete.  The primary issue in the case was whether the Ninth Circuit's "narrow restraint" exception was a proper interpretation of California law.  Under the narrow restraint exception, employers could enforce non-competition agreements that did not "entirely preclude" an employee from practicing his or her trade.  The Supreme Court summarily rejected this exception.  The lesson for employers is that unless a covenant not to compete falls squarely within one of the statutory exceptions, it is not likely to be upheld by a California court.

Connecticut employers with California employees would be wise to review their restrictive covenants again in light of this decision.

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October.  Here in New England, it brings to mind pumpkins.  Besides being carved up (made into pumpkin pie), pumpkins also hold a place in story lore -- you'll recall from Cinderella that a pumpkin could be magically transformed into a beautiful carriage (which of course, you can buy on Amazon.) 

In Connecticut, October also brings about new laws, which go into effect on this date.  Which laws will blossom into beautiful carriages, with meaning and true purpose, and which ones will remain pumpkins?  It remains to be seen.  But here are some of my early contenders on the employment side of things:

Carriages (Laws that should run smoothly -- relatively easy to interpret, apply and understand):

• The laws regarding discrimination on the basis of sexual orientation and civil union status have been evolving this year.  Before this year, Connecticut just prohibited discrimination on the basis of sexual orientation.  In July 2007, Connecticut prohibited employment discrimination based on a person's civil union status.  Now, effective today, however, the laws are broadened even further on sexual orientation grounds. 

It will now be "discriminatory practice for any person to subject any other person to the deprivation of any rights, privileges or immunities secured by the Constitution or laws of this state on account of sexual orientation."  This is clear and gives some greater consistency to the application of sexual orientation discrimination laws in the state.  A full background on these new laws is discussed during an earlier post. 

Pumpkins (Laws with limited application or may lead to unintended consequences):

• A new law prohibiting the use of non-compete agreements, in some circumstances, for security guards.  I've discussed this new law's background at length previously, but suffice to say that its an inartfully drafted statute.  At its core, the new law prohibits employers from requiring security officers to "enter into an agreement prohibiting such person from engaging in the same or a similar job, at the same location at which the employer employs such person, for another employer or as a self-employed person". (If the employer can "prove" that the employee received trade secrets, then a non-compete can be used.)
  
• Incidentally, this same new law also prohibits the use of non-compete agreements for broadcast employees (also known as television anchors).  Jonathan O'Connell, of the Hartford Business Journal, had this to say about the case over the summer and recalled the influence that WFSB Channel 3 anchor Al Terzi had on its passage. 

One can argue about whether non-compete agreements are a useful tool for business or harm an employee's right to work; when the legislature carves out exceptions for certain industries however, it passes up on the opportunity to set real boundaries for restrictive covenants. Instead, this statute would appear to affect just a handful of employees every year, if even that.

(Speaking of deadlines and new laws, yesterday was the deadline for filing new updated EEO-1 forms to comply with federal laws. The guidance from the DOL is publicly available.  Employers that haven't yet submitted the information should do so ASAP.)   

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About a year ago, Guardsmark, a security company, lost its contract to provide services to ESPN. When employees from the old security company tried to work for the new company, Guardsmark invoked the non-compete agreements that these employees signed.  As Connecticut readers know, there are not many state laws that restrict the use of non-compete agreements, compared with other states.

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