Category Archives: Labor and Employment Law

 

The need for non-compete agreements certainly looks different from the perspective of being an employee versus being an employer, but no one can doubt both the recent proliferation of and significant career impacts of non-compete agreements.

Today’s New York Times offers an important and detailed perspective on the decision to sign such documents.  Read it here: Signing Away the Right to a New Job

Think carefully about signing such documents.

Finney Law Firm attorney Stephen E. Imm practices extensively in the area of both enforcing and defeating non-compete covenants and writes here about the law in Ohio relating to their enforcement: Non-Compete Agreements: Are they enforceable in Ohio?

Let us know how we can help with your labor or employment issue.

In the last 20 years or so, it has become more and more common for employers to require employees to enter into arbitration agreements. These are documents or policies that are designed to protect employers from having to defend lawsuits in court. They provide that if any legal disputes arise between the employer and the employee, before or after the employment relationship ends, they will be submitted to an arbitrator for decision, instead of to a judge or jury.

Employers have tended to favor these agreements for several reasons. First, the idea is that arbitration takes less time and is more streamlined than a court case, and therefore costs much less in attorney fees. Secondly, it is generally believed that arbitrators are likely to me more “employer friendly” than juries. Thirdly, there is believed to be less chance of a really “eye popping” damage award from an arbitrator than from a jury.

There is some validity to each of these considerations. And employee advocates have resisted arbitration agreements where they can, primarily because they prefer that their employee clients receive jury trials, and they view juries as more sympathetic to employee rights. There is some truth to this.

Employers should be aware that, In order for an arbitration agreement to be enforceable, it has to meet certain requirements:

1.  It has to really be an “agreement.” In other words, it should be a written document signed by the employee. Merely having an arbitration “policy” that the employee does not formally agree to may be unenforceable.

2.  It must allow the employee to recover the same remedies available at law. An agreement that limits the employee’s recovery, such as by prohibiting certain types of damages, may not be enforced.

3.  It can’t make it too expensive for the employee to pursue arbitration. If the costs of arbitrating are far more expensive to the employee than the filing fees charged by a court, a court is less likely to enforce the agreement.

This last point has caused some employers to re-think the wisdom of requiring employees to sign arbitration agreements. The cost of paying an arbitrator for his or her service can be a five-figure expense. If the employer has to bear that expense alone – as it may have to do in order for its arbitration agreement to be enforceable – suddenly arbitration may not seem like a much less expensive alternative to a court proceeding.

Additionally, many sets of arbitration rules that apply in employment cases – such as those of the American Arbitration Association – have expanded the “discovery” (depositions, interrogations, etc.) permitted before an arbitration hearing. This is designed to make sure the employee has a fair opportunity to develop evidence to support his or her case, but it also makes the process longer and more expensive – again, more like a court proceeding.

Whether you are an employer or an employee, if you have questions about whether arbitration agreements are a good idea, or about whether a particular agreement is enforceable, please give us a call.

A common question I get is whether an employer must pay an employee for their accrued but unused vacation when they leave employment. If an employee has left under difficult circumstances, such as an involuntary discharge, there can easily be a dispute about post-employment issues like this.

Under Ohio law, accrued vacation is considered an earned benefit that the employee has a legal entitlement to. Therefore, an employee’s right to pay for vacation that was not used during employment will normally survive the employee’s termination or resignation, and payment will be owed.

I say “normally” because an employer can change this through a written policy that is clearly communicated to employees, in an employee handbook or otherwise. If the employer promulgates a policy stating that any unused vacation pay is forfeited when employment ends, that policy is legally enforceable, notwithstanding the general rule.

Employers should carefully consider whether to have a blanket policy like that, however, as it can lead to some harsh results. And some employees who are planning to quit, being aware that their vacation pay will be lost when they leave, will simply take their vacation right before they resign – and quit without notice as soon as they return.

For some employers, a sensible middle ground may be to have a policy stating that vacation pay is forfeited only under certain circumstances – such as if an employee is discharged “for cause,” or if she or he leaves without giving two weeks notice.

Please contact us to discuss what makes the most sense for your business, or if you have questions about you right to vacation pay.

When an employer feels the need to cut costs, the first thing it often targets is wages and salaries, because that is often the biggest expense it has. To reduce wage costs it naturally will look at reducing the size of its workforce. And when it does that, it will often focus on the people with larger salaries. In this way the employer feels it can save the most money with the fewest number of terminations – get the most “bang for its buck” so to speak.

The problem is that the people with the biggest salaries are also often among the oldest employees. People who have been at a company the longest tend – due to their tenure, and the accumulation of annual salary increases – to be the most highly compensated.

So when a company engages in a reduction in force, and focuses on higher salaried employees for termination, older workers are often hit harder than younger employees. Is this illegal? Is this age discrimination?

Technically no. Targeting someone because of his or her salary – if that is the reason he or she was targeted – is not age discrimination, even though the EFFECT of this cost-conscious motivation is to hurt older workers more than younger workers

Age discrimination is an intentional act, not an accidental or negligent one. It occurs as a result of stereotypical, biased attitudes about older people – such as that they aren’t as energetic or creative, that they are slowing down, that they can’t adapt to change, etc. It is these attitudes that the age discrimination laws were designed to address.

Having said that, employers should always be concerned about applying any reduction in force in an evenhanded manner. Any reduction that disproportionately affects a particular demographic group is going to be subject to scrutiny by the courts, and create a greater risk of litigation.

I receive a lot of inquiries from clients about the enforceability of non-compete agreements. For reasons that have never been clear to me, there seems to be a common belief that such agreements are “not worth the paper they are printed on.”

A non-compete agreement is a contract between an employer and one of its employees, stating that the employee will not work for a competing employer for a period of time – most commonly a year – after their employment with the contracting employer ends. These agreements often will also contain provisions against soliciting the employer’s customers (“non-solicitation”) and using the employer’s confidential information or trade secrets (“confidentiality”).

Historically, non-compete agreements were disfavored in the law as a restraint of trade. And some states – such as California – today have sharp restrictions against them.

In Ohio and many other states, however, non-compete agreements are alive and well, and are enforced in courts with regularity. Ohio has even held that a non-compete agreement may be enforceable when the employee doesn’t receive anything from the employer in exchange for signing it – what the law calls “consideration.” The Ohio Supreme Court has ruled that an employee’s continued employment alone can be sufficient consideration for an employee’s promise not to compete.

Many clients will point out that their former employer has not enforced non-compete agreements signed by other employees, and ask whether that doesn’t prevent the employer from trying to enforce one against them? The answer is “no.” Just because an employer chose not to bother enforcing a similar agreement against another employee does not prohibit it from enforcing it against you.

The law does recognize some defenses to non-compete agreements, and does impose certain limitations on them. Employers who want to protect their customers from former employees should seek competent legal counsel to draft enforceable agreements. And employees facing claims by former employers that they are in violation of such agreements should do the same.

Most importantly, employers and employees should get counsel about these agreements BEFORE the employee leaves the job. Employers: Make sure your agreements are enforceable BEFORE you present them to your key employees. Employees: Talk to a lawyer when you are PRESENTED with one of these agreements – don’t wait until after you’ve already signed it, or after you’ve left your current employer for a competitor.

The Family and Medical Leave Act (FMLA), passed in 1993, is a federal law that requires employers with 50 or more employees to provide up to 12 weeks of leave per year to eligible employees for the birth of a child, a serious health condition, or the care of a family member with a serious health condition.

The leave required by the federal law is unpaid, and it only applies to larger employers. But Congress provided that states may pass their own leave laws that are more generous than what is required by the federal statute.

Several states have done exactly that. (Ohio is not yet among them.) Some states, for instance, apply the leave requirement to smaller employers than those covered by the federal act. And a few states (California, New Jersey and Rhode Island) have passed laws that require at least certain types of leave to be PAID – something which is not included in any part of the federal FMLA.

New York will also have a paid leave law in 2018, and the District of Columbia city council just passed a paid leave law that is more generous to employees than the laws of any of the states or the FMLA.

The trend definitely seems to be in favor of expanding employee leave protection, including making the leave paid instead of unpaid. During the recent presidential campaign, in fact, President-elect Trump proposed that pregnant employees receive up to six weeks of paid maternity leave after the birth of a child.

The Trump plan did not contain many specifics, and it remains to be seen if something like it will become federal law in the next four years. But employers and employees should both expect that the trend toward requiring paid leave will continue, both on the state and federal level.

I get a lot of calls from employees who reach out for legal help because they are or have been working in what they call a “hostile work environment.” Many of them have not been fired, and are still working in the environment. Others have quit because the environment had become too toxic. For all of them, work had become a very unpleasant or even miserable place. They reached the point where they dread (or dreaded) having to go.

Sometimes the employee’s dread comes from knowing they will likely experience unwanted sexual remarks or behavior or touching. Sometimes it comes from knowing they will likely be threatened, insulted, humiliated, or demeaned by a boss, or by one or more co-workers. Sometimes it comes from knowing they will be unfairly criticized or scrutinized, or blamed for things that are not their fault.

My heart always goes out to these clients. We spend so much of our time at work, and our jobs are a big part of who we are and how we feel about ourselves. If we are unhappy at work it is almost certain we will be unhappy in our lives.

Often, though, for a variety of reasons, people can’t just quit their jobs in these circumstances, even if their jobs have become a source of misery. They are caught in a terrible situation, and it can seem like there’s no way out. So many of them will reach out to a lawyer, hoping he or she can do something to fix this deeply unjust situation. Can’t a lawyer do something about their “hostile work environment”?

The answer to that – like a lot of questions in the law – is “it depends.” The term “hostile work environment” is used a lot. There are lots of news stories about people who filed or won legal cases because of a “hostile work environment”. But there is a lot of confusion about what that term actually means.

It surprises many people to learn that the law does not always protect people from a “hostile” work environment. It depends on what the motivation is behind the “hostility.” If an employee is being mistreated or harassed for reasons having something to with their sex or race – or certain other characteristics like their religion or national origin – then there are indeed legal protections against it.

But if the source of the hostility is something else there may not be a legal remedy for it. If, for instance, someone is being harassed at work just because their manager or co-worker is a jerk, or because the manager or co-worker is simply an unreasonable, excessively demanding, or irrational person, or because of a “personality conflict” with them, often there is not a legal solution to the problem, Many times the only things the victim of this kind of harassment can do is either try to resolve the problem through internal channels – like going to HR – or to find another job. This can be very hard for people to understand when they have worked hard, and have done nothing to deserve the harassment and mistreatment they are being subjected to.

The problem of a hostile work environment, as you can see, can be a complex and tricky one for the employee. Having good and experienced legal counsel can be invaluable in resolving the situation in the best way possible.