The recent Supreme Court decision in Home Paramount Pest Control v. Shaffer brings home, in stark fashion, why prudent companies should not rely on possibly-obsolete language in existing contracts with key employees and executives.  While properly drafted agreements can restrict post-employment competition by key employees, the Virginia Supreme Court’s decisions exhibit a continuing reluctance to give employers any latitude in enforcing overly-broad covenants not to compete.  Home Paramount gives us an extreme case why employers should rely only on language crafted with the most recent decisions in mind.

In 1989, Home Paramount’s predecessor corporation found itself in the same situation: a valued employee had left the company and, in apparent violation of his written agreement, proceeded to compete with his former employer.  That case made it all the way to the Virginia Supreme Court as well, and the Court upheld the covenant as reasonable, narrowly-tailored, and enforceable.  This next time around, Home Paramount tried to enforce an agreement that was word-for-word identical to the agreement the Virginia Supreme Court held was enforceable in 1989.  However, the Court – citing some of its intervening decisions disapproving covenants over the past decade – held that the same language that was enforceable in 1989 was not enforceable in 2011.  What’s more, the Court held that the contract was unenforceable “on its face,” regardless of the facts surrounding the violation.

What does this mean for employers?  More than anything else, the Home Paramount decision signals the need for periodic review, and perhaps modification, of existing non-competition agreements.  What was enforceable a few years ago may not be enforceable now, and the time to find out about the problem and fix it is before, not after, a key employee sets up a competing business next door.  As a matter of good human resources practice, we recommend a thorough review of any non-competition agreements drafted more than five years ago, with periodic review of all such agreements perhaps every five years.  That way, the Home Paramount Pest Control decision will not end up, er, “bugging” you. –David J. Sullivan

A federal court in the District of Columbia has issued an order temporarily enjoining the NLRB from enforcing its rule requiring the posting of a general notice informing employees of their rights to join a union under Section 7 of the National Labor Relations Act.  The posting rule was scheduled to take effect on April 30, 2012.  Our report on the issuance of this rule can be found here.

As a result of that decision and others questioning the validity of the NLRB’s rule, the NLRB has issued a statement explaining that “regional offices will not implement the rule pending the resolution of the issues before the court.”   

Until further notice, employers do not need to post the notice.  Stay tuned, as we will continue to monitor the fate of this rule. –David J. Sullivan

The Office of Federal Contract Compliance Programs (OFCCP) recently held a webinar to discuss proposed changes to its regulations related to the hiring of disabled individuals.  If enacted, these changes would be significant.  The Secretary of Labor Hilda Solis explained that the proposed rule “represents one of the most significant advances in protecting the civil rights of workers with disabilities since the passage of the Americans with Disabilities Act.”

In short, the OFCCP is seeking to enforce a 7% hiring goal for individuals with disabilities.  The new rule would also include enhanced obligations for federal contractors in the areas of recruiting, training, record-keeping and disseminating policies.

While these new rules are not yet final, federal contractors should be aware that changes may be on the way and should carefully monitor new developments.  Parties interesting in submitting comments on the new rules may do so until February 7, 2012. –David J. Sullivan

Knowing that companies are dealing with many pieces of the employment law puzzle, K&C is pleased to provide a new program designed to help employers solve the employment law puzzle. The 28th Annual Employment Law Update “Putting the Pieces Together” will debut at the new Virginia Beach Convention Center on Thursday, November 10th.

The K&C Employment Law Team will present a variety of educational workshops and will feature several representatives from a number of government agencies, as well as an intriguing presentation by a lawyer who specializes in suing employers. Topics to include: What Employers Should Know About Social Media; Avoiding Discrimination Claims; Handling Unemployment Claims; Current Wage-Hour Issues; Safe Interviewing/Hiring Practices; and more.

The 28th Annual Employment Law Update will provide employers with valuable tips to piece together their employment law puzzles and reduce potential liability. For more information, click here or contact Kerry Martinolich at (757) 624-3232.  –David J. Sullivan

The Department of Labor issued a final rule implementing Executive Order 13495, Nondisplacement of Qualified Workers Under Service Contracts. The Executive Order establishes a general policy of the federal government concerning service contracts and solicitations for service contracts for performance of the same or similar services at the same location. This policy mandates the inclusion of a contract clause requiring the successor contractor and its subcontractors to offer those employees employed under the predecessor contract, whose employment will be otherwise terminated as a result of the award of the successor contract, a right of first refusal of employment under the successor contract in positions for which they are qualified. The effective date for this final rule is pending, and the Department will publish a notice in the Federal Register announcing the effective date once it is determined. –David J. Sullivan

As this blog discussed in early July, the National Labor Relations Board has been working on a rule that would require all employers to notify employees of their rights under the National Labor Relations Act.  The Final Rule has been issued and will require employers to provide such notification as of November 14, 2011.

Private-sector employers (including labor organizations) whose workplaces fall under the National Labor Relations Act will be required to post the employee rights notice where other workplace notices are typically posted. Also, employers who customarily post notices to employees regarding personnel rules or policies on an internet or intranet site will be required to post the Board’s notice on those sites. Copies of the notice will be available from the Agency’s regional offices, and it may also be downloaded from the NLRB website. 

The notice, which is similar to one required by the U.S. Department of Labor for federal contractors, states that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to refrain from any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints. 

A fact sheet with additional information about the rule is available here. –David J. Sullivan

The Occupational Safety and Health Administration (“OSHA”) recently enacted new fall protection regulations.  However, those regulations did not take immediate effect.  Instead, OSHA announced a three month phase-in period to allow contractors time to adjust to the new regulations and implement necessary changes.  During the phase-in period, contractors in violation of the new regulations are issued hazard letters.  The phase-in period is set to expire on September 15, 2011, and after that date, contractors in violation of the new regulations will be subject to significant fines.

Contractors engaged in the construction of residential, wood frame structures must be aware that the phase-in period expires next month and compliance with the new regulations should be an immediate priority. –David J. Sullivan

This past fiscal year, more charges of illegal retaliation were filed with the Equal Employment Opportunity Commission (“EEOC”) than any other type of charge.  This marked the first time in EEOC charge-handling history that race discrimination charges were not the most frequently filed claim.  Also, given recent federal cases expanding retaliation rights, employees and their attorneys appear to have recognized that retaliation claims are more likely to be successful at trial than many standard discrimination claims.

With the current legal environment, employers are well-advised to make sure they have updated anti-retaliation policies in place.  Such policies are often included in employee handbooks as part of policies outlining complaint procedures wherein employees are assured that they will not suffer any retaliation or discrimination for filing an internal complaint or for complaining to governmental authorities about some potential violation of the law.  Other steps employers should consider include:  providing training to supervisors who may not understand the scope of retaliation legal protection; maintaining confidentiality and otherwise conducting thorough investigations whenever an employee makes a protected complaint; and carefully considering the timing of any discipline of employees who have recently filed protected complaints.
–David J. Sullivan

Some of the most common questions from human resource professionals involve employees taking leave under the Family and Medical Leave Act (“FMLA”).  Therefore, this blog will routinely address some of the trickier situations that can arise under the FMLA. 

Today’s situation: A husband and wife work for the same employer.  The employer is covered by the FMLA and both the husband and wife satisfy the requirements for taking covered leave.  Yesterday, the wife gave birth to a baby.  Both the husband and the wife request leave under the FMLA to care for their newborn child.  How much leave are they entitled to?

The FMLA regulations explain that a husband and wife who are eligible for FMLA leave and are employed by the same covered employer may be limited to a combined total of 12 weeks of leave during any 12-month period if the leave is taken for birth of the employees’ son or daughter or to care for the child after birth, for placement of a son or daughter with the employees for adoption or foster care or to care for the child after placement, or to care for the employees’ parent with a serious health condition.

The regulations also explain that if the husband and wife both use a portion of the total 12-week FMLA leave entitlement for either the birth of a child, for placement for adoption or foster care, or to care for a parent, the husband and wife would each be entitled to the difference between the amount he or she has taken individually and 12 weeks for FMLA leave for other purposes. For example, if each spouse took 6 weeks of leave to care for a healthy, newborn child, each could use an additional 6 weeks due to his or her own serious health condition or to care for a child with a serious health condition. The regulations also note that many state pregnancy disability laws specify a period of disability either before or after the birth of a child; such periods would also be considered FMLA leave for a serious health condition of the mother, and would not be subject to the combined limit.
–David J. Sullivan

A recent article in the New York Times examined a start-up company’s plan to help employers use internet searches to uncover information about applicants, ostensibly avoiding the legal risk associated with such activities.

Social Intelligence is a California company that scours the internet for its employer clients, digging up information on its clients’ job applicants, then scrubs the data and completes a background report on the applicant that does not include any protected class information.  According to the article, the Federal Trade Commission has determined that Social Intelligence complies with the Fair Credit Reporting Act.  Most importantly, Social Intelligence claims to insulate employers from discrimination claims by removing any references to a person’s religion, race, marital status, disability, and other information protected under federal employment laws.

While not every employer will retain the services of a third party to perform internet searches, it is important to be aware of the risks of conducting such searches.  It is also important to weigh the risks against the potential rewards, as much of the information found on the internet may not be job related at all.  For these reasons, employers should evaluate their options and implement a company policy that avoids unnecessary risks. 
–David J. Sullivan