Smooth Transitions Law Blog
Addressing the legal issues arising from the departure of employees & business breakups

Employers

Department of Labor’s FAQ on Family First Coronavirus Response Act
March 25, 2020

More regulations are to follow, but here is a link to the FAQ from the Department of Labor.

Some highlights:

  • In effect on April 1 – Not April 2 as originally calculated;
  • Applies to employers with less than 500 employees – Integrated Employer Test used just like traditional FMLA;
  • There is an exemption for those with less than 50 employees that can’t afford it and can justify it (still no details on this);
  • Discusses how to calculate benefits for part-time workers and how overtime is considered;
  • Paid sick leave is capped at 80 hours period – it doesn’t start over for separate incidents; and
  • Paid FMLA only applies to COVID-19 reasons.
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COVID-19  / HR Issues

Why Texas employers should care about the Defend Trade Secrets Act.
May 16, 2016

Capture

 

Last week President Obama signed the Defend Trade Secrets Act.  Finally some legislation both sides of the aisle could agree on and the President could sign.  After all, who doesn’t want to protect trade secrets?  So what does this mean for Texas employers faced with a departing employee?

  1.  Another arrow in the quiver.  In October 2013 the Texas Uniform Trade Secrets Act went into effect and we’ve discussed it here previously.  Now we have a federal statute (applicable to all states) that employers can use to protect their secret sauce.
  2. Federal Court – The law creates federal question jurisdiciton.  Put another way – the lawsuit can be filed in federal court not state court assuming the amount in controversy exceeeds $75,000.  Why does this matter?  Sometimes an employer may not want to be in state court.  The reasons can vary from the judge(s) involved, the location of the dispute, etc. So an employer now has a choice.
  3. Definition of Trade Secret – Similar to the TUTSA but there are some minor differences.
  4. Whistle Blower Protection – A whistle blower is afforded some protections if they disclose a trade secret to a government official.
  5. 3 year statute of limitations
  6. Seizures – The law allows a plaintiff to have the government seize its trade secrets from a defendant.  TUTSA has nothing like this.  We shall see how this play out.  This is extraordinary relief.

So, this is now the law of the land.  Stay tuned to see how it develops.

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Trade Secrets

Fat and Getting Fatter – What are Employers to do?
September 24, 2012

                                       

This recent quote from a Dallas Morning News story is troubling to say the least:

At the current rate of weight gain, by 2030, 57.2 percent of Texans will be obese. That could lead to 13 million more cases of chronic diseases like diabetes, heart failure and stroke, arthritis and cancer.

There has been a lot of time spent in this country arguing over the merits of health care reform including a trip up to the United States Supreme Court. Regardless of one’s views on health care reform, there is a universal truth with respect to to the health of Americans. We are fat and getting fatter.  The implications for our health care system range from more incidents of diabetes, heart disease and about every other bad health condition. It is not an overstatement to say this is an epidemic.  Employers will have to deal with this through lost work time, inefficiency, and increase health care premiums.   So the question is what to do?

Earlier in the year, we profiled several instances of employers using health related factors to make hiring determinations. This ranged from not hiring smokers to one hospital’s attempt to hire individuals based on their BMI Index. I believe that these trends will continue as employer’s attempt to avoid hiring individuals with certain health risks. Of course this conduct will always border on some type of actionable discriminatory conduct that employers will have to be sensitive to.

Wellness programs are often a good start towards improving health conditions in the workplace. I was recently in an office that had taken this step of creating secretarial stations where secretaries and other administrative staff could do work, usually for half hour intervals, while walking on a treadmill. Certainly this is a great step towards allowing for exercise and promoting healthy habits. Other companies do things such as offering a wide range of medical tests such as cholesterol, body fat etc. for their employees.  Others participate in fun runs or walks, and even monitoring what is kept in the company kitchen to ensure there are not too many M&M packages.  Most employees appreciate these types of efforts and they can contribute to morale and health.

No matter what the employer’s face chooses to do, something is better than nothing. The prospects of America’s future health are not good. The continued rise in obesity not only impacts health but will have a debilitating effect on our nation’s economy as more and more money is devoted to health care.

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HR Issues

Determining Venue for The Employment Lawsuit – Forum Selection Clauses
August 13, 2012

                    

There are certain standard items that every employment agreement should contain and for that matter any contract. Two of those include a choice of law and forum selection clause.  A forum selection clause specifies where a party can sue to enforce the agreement.  The agreement can specify once certain venue (preferable) or multiple venues depending upon the nature of the agreement.

The United States Supreme Court in the Bremen case recognized the right of contracting parties to contract for venue.  It is difficult to set aside a forum selection clause under Bremen.  A party challenging a forum selection clause generally has to show that its enforcement would be unfair or unresonable. 

Texas generally recognizes the rights to include form selection clauses and follows Bremen. See In re AIU Ins. Co., 148 S.W.3d, 109 (Tex. 2004).    In large states like Texas, many employers will have employees in different parts of the states that are several hundred miles away and those jurisdictions may vary different in terms of judges and jury pools.  There are certain jurisdictions in Texas that are friendlier to employees than employers and vice-versa.

The employer can eliminate any guesswork with respect to that by specifying the forum provision.   Do not leave it out of employment agreements.

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HR Issues

What the Blue Line Means for Texas Employers
May 11, 2012

                         

Texas is a blue line state when it comes to the enforcement of non-compete agreements.  What does this mean?  It means that courts can perform or rewrite non-compete agreements so that they are enforceable under Texas law.  What this really means is, the judge can rewrite the contract to a form that he or she thinks is palatable and fair.

In some states, the blue line does not apply.  This means that if the court finds a non-compete is overly broad or unenforceable, there is no way to enforce the agreement and the parties can operate as if it never existed.  In Texas, employers who may be concerned about the enforceability of a non-compete should always remember that they will be in a position in litigation to request that the court re-form the agreement to make it enforceable.  This usually takes the form of the declaratory judgment action and could potentially give rise to attorneys’ fees.

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Non-Compete Agreements

Lack of Jury Trials Isn’t Bad for Employers
May 1, 2012

The Jury BoxIt should be no surprise that civil trials with juries are on a downward trend.  A recent Dallas Morning News article cites a number of factors from tort reform, the expense of trial, activist judges, binding arbitration, and the Texas Supreme Court. 

The most surprising was the theory that Judges distrust juries and therefore would rather resolve the case themselves as opposed to letting a jury.  Certainly there has been a rise in the granting of summary judgments according to the article, but I’m not sure that indicates a judicial distrust.

The reality is that for employers and business owners this is good news.  Employers do not want their employment disputes being dealt with by juries in most cases for the simple fact that everyone has been an employee, but not everyone has been an employer. Certainly jury trials are a fundamental cornerstone of our judicial system, but that doesn’t mean they make sense for employers.  As discussed here there are numerous ways to avoid juries from arbitration to jury trial waivers – consider them. 

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HR Issues

Jury Waivers Anyone?
September 15, 2011

The Jury BoxTo Jury or Not to Jury

It is always interesting to hear people talk about the runaway jury and risks of letting a jury determine the fate of a business/employer.  Most jury members, like most people, are not employers but are employees.  It’s a fair statement that they are likely to have some bias against the employer whether they admit it during jury questioning or not.  That natural bias can be overcome, but it is not easy.  For all intents and purposes, employers are the "Man".

In the context of employment agreements two popular alternatives to juries have developed – the arbitration and the jury trial waiver.  Though arbitrations are a good alternative, they can be expensive and impractical for the typical employment agreement.  Opting for a judge as opposed to a jury can be a good alternative.

The Typical Waiver

Waiver of Trial by Jury. Seller and buyer knowingly and conclusively waive all rights to trial by jury, in any action or proceeding relating to this Contract.

The Texas Supreme Court ruled that the provision above was enforceable.  Though this provision was in a business transaction, it can be amended for use in the employment context. 

Yes or No.

First, the waiver eliminates any potential jury bias (of course Judges have their own biases).  Second, in most cases a trial date for a non-jury trial will be earlier than a jury trial setting because the cases take less time.  Finally, a non-jury trial is typically shorter and as a result less costly.

Waivers make sense.  They are  easy to use, enforceable, and probably a better alternative to arbitration these days. 

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HR Issues

Packing Heat in the Parking Lot – New Tx Gun Law
September 2, 2011

                         

Many Texas employer have policies that prevent their employees from keeping their guns in  employee parking areas.  As of yesterday, employees who have conceal carry licenses in the state of Texas can keep their guns in their cars as long as they are locked.  Of course there are exceptions in the law that went into effect September 1, and there is even an immunity provision for the employer.

Also, you can apparently hunt feral pigs from the air now for a fee. 

Don’t Mess With Texas.

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HR Issues



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