Non-Competes are Company Assets, August 14, 2006
Suppose you’ve just acquired the assets of another company, but one of that company’s employees decides he doesn’t want to work for you. Can he jump ship and work for the competition? Not if he signed a non-competition covenant with the company you’ve acquired. That non-compete is just as much a transferable asset as an account receivable.
True, he doesn’t have to go to work for you, assuming he’s an at-will employee. But he can’t work against you if he’s bound by that non-compete. So held the Circuit Court for Baltimore City in a recent case.
Nat’l Instrument LLC v. Braithwaite, No. 24-C-06-004840, Circuit Court for Baltimore City (Maryland) (Aug. 3, 2006).
Favoring Older Workers is OK, August 14, 2006
Following the Supreme Court’s lead, the EEOC declares that firms can favor older workers over younger ones. In 2004, the Supreme Court decided General Dynamics v. Cline, holding that a company’s decision is not "because of age" within the meaning of the Age Discrimination in Employment Act unless it’s intended to favor younger workers over older workers. In that case, a group of over-40 General Dynamics workers complained that retirees were getting health benefits that the younger group would not receive.
The EEOC has altered its rule accordingly. The essence of the new rule is that the ADEA "permits employers to make age-based employment decisions that favor relatively older employees." The new regulation, says the Commission, "expressly allows employers to make certain previously forbidden age-based decisions without fear of liability." The public can comment on the proposed change until October 10, 2006.
Computers Are Not Like Purses, August 14, 2006
Employees should assume that their internet use is being monitored by their employers, says a federal judge, and any employee ignorant of that general fact is put on notice when a company publishes its monitoring policy. Thus, an employee who downloads child pornography from the internet has no reasonable expectation of privacy in the resulting images.
Jeffrey Brian Ziegler’s lawyer argued that the FBI had overstepped its authority in ordering his employer to hand over a copy of his computer’s hard drive. The Fourth Amendment protects private citizens against "unreasonable searches and seizures." So, for example, the police (without probable cause) could not lawfully order a company to seize an employee’s purse and supply a photograph of its contents, because a woman has a legitimate expectation of privacy in the contents of her purse. But the court did not even reach the Fourth Amendment issue, because there was no reasonable expectation of privacy in one’s workplace computer.
"Social norms suggest that employees are not entitled to privacy in the use of workplace computers, which belong to their employers and pose significant dangers in terms of diminished productivity and even employer liability," said Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit.
United States v. Ziegler, No. 05-30177 (9th Cir., Aug. 8, 2006).
FMLA Notice Obligations Fall to Staffing Agency, Not to Employer, August 10, 2006
The FMLA is confusing enough for most employers on the simple stuff. But what happens when a staffing company’s leased employee requests FMLA leave? Who is "most" responsible for addressing that issue and providing notice to the employee? According to a federal court in Florida, it's the staffing company. Mahoney v. Nokia Inc., No. 6:05-cv-741-Orl-31-GAP-KRS (M.D. Fla. July 28, 2006).
Mahoney applied to work at Spherion, a staffing firm, who assigned him to work at a Nokia facility in Melbourne, Florida. When he was hired by Spherion, Mahoney signed a notice that stated "Spherion is my employer and I will address all problems and concerns with Spherion, never the client." During his employment, Mahoney reported to Spherion and was evaluated by Spherion.
When Mahoney suffered from medical conditions that made it difficult to walk an lift objects, he asked Spherion’s manager for a reduced workweek (something that could have been treated as intermittent FMLA leave). But rather than address Mahoney's request, Spherion punted to Nokia, suggesting that Nokia should permit the reduction, but that it was "up to Nokia." Nokia did not have a policy for temporary or contract workers to have part-time schedules and Spherion did not supply Nokia with any part-time assemblers. So, Mahoney was told by Spherion that Nokia could not accommodate his scheduling request. Spherion ended Mahoney's work assignment at Nokia and then fired him.
Mahoney sued both Spherion and Nokia. He settled with Spherion, but continued to go after Nokia, claiming that Nokia violated the FMLA because it "knew or should have known that he was entitled to FMLA leave" and failed to give him notice of his eligibility for leave. The Court granted Nokia’s motion for summary judgment, holding that while Nokia was a joint employer with Spherion under 29 C.F.R. § 825.106(a), Nokia was only a secondary employer, and in such circumstances, "only the primary employer is responsible for giving required notices to its employees, providing FMLA leave, and maintenance of health benefits." 29 C.F.R. § 825.106(c).
While Nokia was able to prevail here, it did so only after spending (one assumes) significant amounts in legal fees. The more sensible and cost effective approach is to make sure that all employees are provided notice of FMLA rights.
EEOC Letter Clarifies Position on Driver’s License Requirement, August 9, 2006
Can you require that an employee have a valid driver’s license for a job? Only "if driving is an essential function of that position," says the EEOC in a recent Advisory Letter (EEOC Adv. Let. June 21, 2006). Suggesting that the Americans with Disabilities Act Guideline at 29 C.F.R. § 1630.10 is "incorrect," the letter states that an employer cannot impose the requirement when driving is a non-essential function of a particular classification or position. "[I]t is important to determine whether driving is the objective to be accomplished or an incidental means for accomplishing the true objective," the letter notes. As an example, driving might be an essential function for an employee delivering water pipes but not an essential function for an engineer who must inspect the pipes. EEOC Advisory Letters are intended as unofficial, informal assistance with issues rather than official opinions of the Commission. Nevertheless, they give insight into the current thinking of the EEOC.
Labor Board Clarifies Standard In Successorship-Avoidance Cases, August 7, 2006
In a unanimous ruling, the NLRB has clarified the legal standard to be applied in cases where an employer allegedly refuses to hire its predecessor's employees to avoid an obligation to bargain with the union that represents those workers. The Board held that the proper standard to apply in "successorship-avoidance" cases is the Wright Line test for determining whether an employer has committed an unfair labor practice by taking an action against an employee based on anti-union animus or the employee's protected union activity. Planned Bldg. Servs. Inc., 347 NLRB No. 64 (July 31, 2006).
NLRB Holds Union Photographing Of Employees While Distributing Literature Unlawful, August 1, 2006
by Pat Stewart
The National Labor Relations Board (“NLRB”) ruled yesterday that a union engaged in unlawful conduct when its business agents photographed employees while the union representatives were distributing campaign literature before the election. Apparently, some employees were told that the union agents were taking pictures to show to their bosses that they were working on the case. The Board, however, recognized that taking pictures during an organizational campaign can be intimidating as the pictures could tell which employees were accepting the union materials and which were not. The NLRB concluded that employees have a right to accept or not accept a union’s literature, and that photographing them as they make that choice would be coercive. Randell Warehouse of Arizona, Inc, 347 NLRB No. 56 (July 31, 2006).
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