When Union Contracts And Overtime Law Conflict: Court Provides Balance For Employers

The 9th Circuit recently handed down an opinion that helps provide guidance to those employers trying to comply with collective bargaining agreements while simultaneously being challenged to apply potentially inconsistent definitions in California’s overtime law, writes Rebecca King for a Fisher & Phillips website post.

The case involved an offshore oil worker whose contract called for 12-hour shifts for a week and required him to be on the off platform between shifts. He wanted to be paid for the hours he was required to be on site.

Read the article.



Female Attorneys Sue Biglaw Firm Over ‘Fraternity’ Atmosphere, Allege Bias Against Women

Cleveland-based BigLaw firm Jones Day, which has struggled with its reputation in the past as a diverse and inclusive workplace, is being sued for gender, pregnancy and maternity discrimination to the tune of more than $200 million, reports Crain’s Cleveland Business.

“The firm’s admitted practice of pay confidentiality, combined with the “nearly absolute control” exercised by Jones Day’s Managing Partner Steve Brogan, has resulted in an opaque review system that allows bias and retaliation to run unchecked, Nilab Tolton, Andrea Mazingo, and four Jane Does say in their April 3 complaint,” writes Crain’s Jeremy Nobile.

“Jones Days’s fraternity culture presents female attorneys at Jones Day with an unpalatable choice: participate in a culture that is at best inhospitable to women and at worst openly misogynistic or forego any hope of success at the Firm,” the lawsuit states.

Read the Crain’s article.



Download: Ethics & Compliance Hotline Benchmark Report

NAVEX Global has published the 2019 Ethics & Compliance Hotline Benchmark Report and made it available for downloading at no charge.

“One simple act of documenting open-door conversations and emails allows you to capture and address employee concerns more effectively,” the company says on its website.

The report includes statistics on:

  • Case Closure Times
  • Harassment Reporting Trends
  • Anonymous Reporting Statistics
  • % of Reports Substantiated

Download the report.



BigLaw Firm Criticized for Lack of Diversity is Now No. 1 for Black Lawyers, New Report Says

Employment - hiringPaul, Weiss, Rifkind, Wharton & Garrison took a hit on social media in December when a partnership promotion photo appeared to show just one woman and 11 white men.

The ABA Journal points out that the law firm later said the partnership class actually included one woman, one Latino and one LGBTQ partner, making it 25% diverse.

Now a new report released by the nonprofit group Lawyers of Color shows Paul Weiss with the highest percentage of black lawyers out of 400 law firms surveyed. The report says 8.27 percent of Paul Weiss’ lawyers are black. The average of black lawyers across the 400 firms surveyed was 3.2 percent.

Read the ABA Journal article.



Hospital’s Ex-GC Sues Former Employer and Two Board Members

The former general counsel for the South Florida Hospital District has sued the district and two of its board members, claiming they fired her in retaliation for trying to stop them from violating the law, reports the South Florida Sun-Sentinel.

Reporter Cindy Krischer Goodman of the Sun-Sentinel explains:

Kimarie Stratos claims the district’s board of commissioners wrongly fired her in September after eight years on the job. In her lawsuit, she alleges her termination happened in retaliation for repeatedly reporting Sunshine Act violations, as well as objections to releasing confidential medical information, wasting of public funds, and other actions by board members. By firing her, she alleges the district has violated the Florida Whistle Blowers Act.

Read the Sun-Sentinel article.



NAVEX Global: Reports of Harassment Continue to Increase in Wake of #MeToo

Leading ethics and compliance software and services company NAVEX Global announced the release of its 2019 Ethics & Compliance Hotline Benchmark Report. The report, which includes the first full year of results since the #MeToo era began, shows an overall 18 percent increase in harassment reports during 2017 and 2018 with 41 percent of these reports substantiated.

“These findings reflect strong growth in the number of employees willing to speak out against harassment – and they should serve as notice to employers that #MeToo is a fundamental shift in employees’ willingness to tolerate harassment,” said Carrie Penman, chief compliance officer and senior vice president, Advisory Services, NAVEX Global. “That said, the problem of harassing conduct is larger than these numbers reflect as many employees still fear reporting. Failed cultures, ineffective internal processes, fear of retaliation and lack of leadership support will continue to result in numbers that do not reflect the true pervasiveness of workplace harassment.”

In addition to claims of sexual harassment, employees are also reluctant to raise reports of retaliation when they lack trust in internal processes. “Reports of retaliation remain extremely low in comparison to the trends we are seeing in external reporting to government agencies,” said Penman. “The gap between internal and external retaliation reporting should be concerning to all boards, executives and compliance professionals. It is time to focus the attention and resources needed to identify, address and prevent retaliatory behaviour.”

The report also found a substantial 18 percent increase in discrimination reports in 2018. However, the substantiation rate of these cases remains significantly lower than the overall case substantiation rate of 29 percent. This is likely because discrimination claims, like retaliation claims, are often based on perceived behaviour rather than on a clear statement or evidence, making these types of cases more difficult to prove.

The 2019 hotline report is the first in which NAVEX Global received and analysed over 1 million employee reports in a single year. One of the key findings is that availability and tracking of all report intake methods matters. Organizations that offer and track the full range of intake methods (hotline, web, open door, etc.) show a much higher reporting rate than do organizations that track only phone and web: 2.1 per 100 employees versus 1.1 per 100. Organizations in the latter category are missing a significant percentage of concerns and risks that employees could be raising.

Finally, this year’s hotline benchmark report included several other results that organizations should consider as they look to improve their own programs.

•Follow-ups to anonymous reporting dropped to a disappointing level, from a median 32 percent in 2017 to 20 percent in 2018. This is particularly striking given that overall report substantiation for anonymous reporters remained high at 38 percent, only slightly lower than the overall rate of 42 percent. “More than half of reports received on hotlines are made by anonymous reporters, so employee failure to follow up on those reports can impact the ability to successfully resolve an issue,” said Penman.

•There was some improvement in case closure time with a median rate of 40 days in 2018, compared with 44 in 2017 and the all-time high of 46 days in 2015. But the 2018 median was still far higher than a best-practice average of 30 to 32 days. Given that employees can become cynical if reports aren’t handled promptly, these findings show that many organizations should review their case-handling and investigation procedures, while also consulting with senior leadership about gaps in available resources.

•Reports made to hotlines that were inquiries, not allegations, decreased to an all-time low of 15 percent. Accepting questions before action is taken is the best way to avoid a problem later. Organizations should encourage employees to use the hotline as a helpline that can offer advice and assistance – and not just a place to file reports.

NAVEX Global will present a webinar covering the survey results. The full 2019 Hotline Benchmark report will be available for download during the webinar.



Invalidating a Non-Compete Agreement

Employment contractThere are circumstances that allow a departing employee to challenge the legitimacy of a non-compete agreement, even if this type of contract meets all the legal requirements, writes Romy Jurado of Jurado & Farshchian.

In her article, she discusses two questions that arise when an employee challenges a non-compete: Should an employee actually challenge the agreement? And: How exactly does an employee challenge it?

She also discusses the three basic approaches an employee might take to challenge the agreement: Ignoring it; negotiating with the employer; and filing a declaratory judgment action.

Read the article.



Key Terms for Provider Contracts

Kim Stanger, writing for Holland & Hart, offers a brief summary of some terms or issues that should be considered in provider agreements.

The article discusses such topics as regulatory compliance, written agreements, parties, the nature of relationships, services, schedules, location, independence, intellectual property, use of information, outside activities, qualifications, representations and warranties, performance standards, medical records, employer obligations, compensation, bonuses, benefits, exempt status, referrals, assignment of fees, liability insurance, and more.

Read the article.



Webinar: Is Your Whistleblower Program Effective?

NAVEX Global will present a complimentary webinar title “Employee Hotlines: What Is Your Data Telling You?” on Thursday, April 4, at 10 a.m. Pacific time/1 p.m. Eastern time.

Studies show that effective internal whistleblower programs contribute to business success, including lower levels of litigation. Yet, external reports to the SEC are on the rise, with many employees failing to use internal reporting systems due to fear of retaliation.

The webinar will allow participants to compare how their hotline programs measures up against benchmarks from more than one million anonymized reports from industry leader NAVEX Global.

Register for the webinar.



Employers Face Hurdles in Enforcing Non-Competes Against Lower-Wage Workers

Employers requiring lower-wage employees to sign and abide by non-competition and non-solicitation of clients provisions may want to find another mechanism to protect business goodwill and confidential information, advises Rachel Powitzky Steely in Foley & Lardner’s Labor & Employment Law Perspectives.

Courts across the country are refusing to enforce non-competes against lower-wage employees and now states are taking action to preclude these agreements, she explains.

Steely offers some advice on how companies can achieve their non-compete goals through alternative methods.

Read the article.



What Not to Do: Construction Contractor Charged With Lying to OSHA

A post in the Seyfarth Shaw Workplace Safety and Environmental Law Alert Blog discusses the case of a construction contractor facing a perjury charge after he allegedly testified that he did not twice order employees to work on a roof. They fell through the roof both times.

During the investigation, OSHA discovered text messages indicating that the contractor had indeed issued the orders.

The case provides two important lessons, according to the authors of the post: Don’t lie under oath, especially when there exists discoverable evidence to the contrary, and be properly prepared and familiar with all relevant facts before providing testimony or statements during an investigation.

The contractor faces a potential penalty of five years in a prison and a $250,000 fine, if convicted.

Read the article.



Are Contractor Agreements Not Worth the Paper They’re Printed On?

A recent ruling in an Alabama federal court illustrates how having a valid independent contractor agreement is not necessarily an impenetrable magic shield automatically rendering misclassification claims null and void, according to Fisher Phillips’ Gig Employer Blog.

Partner Richard Meneghello describes the case in which a company’s former worker claimed that he faced discrimination on account of his race, gender, and age during his three months on the job. The company, however, countered that the plaintiff had been an independent contractor and did not have legal standing to bring employment discrimination claims under Title VII or the ADEA.

The company also citied an independent contractor agreement, confirming that the worker was a contractor and had no employment rights. The plaintiff cited work requirements that would have been appropriate for an employee.

“When the two were compared—the world contained in the contractor agreement against the reality as alleged by Nemo’s complaint and evidence—the court found inconsistencies that led it to rule in [the plaintiff’s] favor,” Meneghello writes.

Read the article.



Where Did We Go Wrong? Planning for Issues in Employment Agreements

When drafting executive agreements, it is easy to focus almost exclusively on benefits and wages, the popular areas, without properly addressing some of the legal concerns that have grown over the last several years, warns Jo Ellen Whitney in a post on the Davis Brown Employment and Labor Blog.

In the article, she cautions against using outdated templates for contracts. She points out that “a template for C Suite positions is not the same as the template or agreements that you might use for front line employees.

She also discusses determining benefits, termination, disability, bonuses, renewal, and restrictive covenants.

Read the article.



Court Agrees General Counsel Was Fired for Whistle-Blowing; Upholds $8 Million Verdict

A federal appeals court upheld about $8 million in damages Tuesday to the former general counsel of a Bay Area laboratory who was fired after telling company officials about possible bribery and records falsification by the lab’s employees in China, according to the San Francisco Chronicle.

Bio-Rad Laboratories fired general counsel Sanford Wadler in 2013, claiming poor performance. The company also claimed it found no evidence of wrongdoing by its employees.

The Ninth U.S. Circuit Court of Appeals on Tuesday found evidence to support the 2017 verdict by a federal court jury in San Francisco that Wadler had acted as a whistle-blower and was dismissed in retaliation for reporting conduct that he “reasonably believed” to be illegal, according to the Chronicle‘s Bob Egelko.

Read the SF Chronicle article.



Turbulence on Breach of Employment Agreement, Trade Secret Misappropriation

Addressing a bench trial decision concerning a former employee’s retention of confidential information and violation of a non-compete provision, the U.S. Court of Appeals for the Fourth Circuit found no abandonment of the employer’s breach claims, and concluded that while certain flowcharts contained protectable trade secrets, there was no breach of the non-compete.

In an article for McDermott Will & Emery, posted at JDSupra.com, Mary Hallerman describes the case of an employee who was subject to an employment agreement requiring him to return to his employer all work documents upon leaving the company. The former employee breached his agreement by retaining these documents after he left the company and misappropriated trade secrets, the plaintiff company alleged.

The Fourth Circuit found that the ex-employee had not breached the non-compete clause because his role at his new employer was not sufficiently similar to constitute a breach.

Read the article.




Tesla’s General Counsel Lasts Only Two Months

CNN reports that Tesla’s general counsel is leaving the company after just two months on the job — the latest in a series of executive departures at Elon Musk’s electric car company.

The company quickly announced a replacement for Dane Butswinkas, who joined Tesla in December. He will return to his legal practice at Williams & Connolly in Washington. His replacement is Jonathan Chang, who previously served as Tesla’s vice president of legal. Chang has worked at Tesla for almost eight years.

Bloomberg is reporting that Butswinkas was hired in the wake of Musk’s run-in with U.S. securities regulators. Hours before announcement of the GC’s departure, the chief executive officer was sending tweets reminiscent of those that put him and the company in legal jeopardy last year, according to the Bloomberg report.

Read the CNN article.



Ex-Winston Lawyer Can’t Be Forced to Arbitrate Job Claims

Bloomberg Law is reporting that a former Winston & Strawn LLP intellectual property attorney can litigate—and can’t be forced to arbitrate—her pay, bias, and retaliation claims.

The California Supreme Court declined to review an appellate ruling that the arbitration agreement Constance Ramos signed as an income partner contained unfair provisions that couldn’t be separated from the rest of the agreement, according to Bloomberg’s Joyce Cutler.

Under those provisions, Ramos would have been required to pay half the costs, and she would be subject to secrecy clauses that would have prevented her from interviewing potential witnesses.

Read the Bloomberg Law article.



‘Breaking Contracts has Consequences’ – Third Circuit Backs Employer with Restrictive Covenant Agreements

A recent decision from the Third Circuit addresses a grant of preliminary injunction against an employee who signed multiple agreements with restrictive covenants, and violated them immediately upon beginning employment with a direct competitor, reports Genova Burns.

Authors Dina M. Mastellone and James W. Sukharev discuss the case of Heartland Payment Sys., LLC v. Volrath.

In that case, a former employee of Heartland breached a manager agreement by sending confidential information to his former employer’s competitors.

Read the article.



Overbroad Geographic Restriction Dooms Covenant Not to Compete

A recent Texas court decision highlights the requirement that any covenants not to compete, including geographic restrictions, must be reasonable to be enforceable, according to a report on the Ogletree Deakins website.

Lawrence D. Smith writes about Fomine v. Barrett, which involved a non-compete agreement for a case manager in a chiropractic clinic. The agreement prohibited the employee from being involved in any competitive business within a 500-mile radius of the employer’s clinic.

The Houston appellate court found the 500-mile radius to be “significantly broader than the geographic scope” of the former employee’s actual employment activities on behalf of the clinic. It is therefore “broader than is reasonably necessary” to protect the employer’s business interests.

Read the article.



Fired Hershey IP Attorney Sues Alleging Race, Age, Sex Bias

Kurt Ehresman, 52-year-old former senior counsel for global intellectual property at Hershey Co., has sued his ex-employer, claiming he was replaced with a younger, black, female lawyer in a case of race, age and sex bias.

Ehresman, who is white, filed suit Feb. 6 with the U.S. District Court for the Western District of Pennsylvania, according to a Bloomberg Law report.

Bloomberg’s Patrick Dorrian writes:

“The move came roughly five years after Hershey recruited him to be ‘the first licensed practice attorney’ in the candymaker’s more than 100-year history, Ehresman charges in the complaint. And it required him to give up his ‘entire portfolio of clients’ and private practice as a condition of joining Hershey, Ehresman says.”

Read the Bloomberg Law article.