President Bush signs bill amending the FMLA

President Bush has signed the National Defense Authorization Act that he had previously vetoed. Its changes to the FMLA go into effect immediately.

As amended by the NDAA, the FMLA now permits a "spouse, son, daughter, parent, or next of kin" to take up to 26 workweeks of leave to care for a "member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." It also permits an employee to take FMLA leave for "any qualifying exigency ... arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation." The DOL will define "qualifying exigency" in subsequent regulations.

According to the DOL, employers are required to act in good faith in providing FMLA leave under these circumstances while it works to prepare comprehensive guidance on rights and responsibilities under this new legislation.

The Department of Labor's website has available for download the full text of the FMLA, as amended by the NDAA.

Remedial measures do not have to be perfect to win harassment claim

Dan Schwartz at the Connecticut Employment Law Blog posts today about treating harassment complaints seriously and taking appropriate action, but not overreacting.

Coincidentally, I make the same exact point in the February 2008 issue of InsideCounsel, discussing Brenneman v. Famous Dave's of America, a sexual harassment case I originally reported on in November:

The court recognized "a company doesn't have to be perfect," explains Jonathan Hyman, an employment lawyer with Kohrman Jackson & Krantz.

"So if a company gets a complaint of harassment, has an adequate policy, undertakes an investigation ... and then makes what it thinks is a reasoned remedial step to stop the harassment, courts much more often than not aren't going to second-guess what the company does. The remedial measures don’t have to be perfect either; they just have to be reasonable and adequate," he says.

Ohio appellate court tolls noncompete while litigation pending

Homan, Inc. v. A1 AG Services, LLC, decided this week by the 3rd District Court of Appeals, answers the following question: if an employer believes a former employee is violating a noncompetition agreement, but does not seek a preliminary injunction, is the time period in the noncompete agreement nevertheless tolled while the case is litigated?

The basic facts of the case are as follows. Kaiser signed a 3-year, 150 mile noncompetition agreement as a condition of his employment with Homan. In January 2004, Homan filed bankruptcy and either laid off or terminated its employees, including Kaiser. Immediately thereafter, Kaiser and his wife started a new business for the express purpose of competing against Homan. When Homan reminded Kaiser about his noncompete, he stopped working for his new business, but a year later rejoined the business, deciding that 1 year was long enough for him to sit out. Within 3 months, Homan sued to enforce the noncompete. It took nearly 2 years for the trial court to decide in Kaiser's favor.

The appellate court determined that a 2-year noncompete was reasonable, and reverse the trial court's judgment. Notably, the Court found that even though the noncompete had already expired, it was retroactively enforceable against Kaiser:

[A] covenant not to compete may not expire while the enforceability of that contract is being litigated…. [T]he plaintiff "should not be denied the benefit of their bargain simply because the time period specified in the negative covenant all but expired while [the plaintiff] sought to enforce the contract through the court system." … [T]he covenant was not enforced while litigation was pending, leaving the defendant to engage in direct competition with the plaintiff…. [I]f it held that the contract had expired during resolution of the litigation, it would be "sanctioning litigation as a delay tactic. All an individual would have to do would be to contest the negative covenant in court until the restrictive time period elapsed. If this were true, covenants not to compete would be virtually ineffective."

Thus, the Court of Appeals found that the trial court erred in ruling that the noncompete agreement had expired.

This decision completely ignores the practicalities of litigation in noncompete cases. At the outset of the litigation, the former employer has a clear remedy available to prevent a noncompete from expiring and the case becoming moot while the litigation is on-going – a preliminary injunction. A preliminary injunction maintains the status quo until the litigation is over, keeping the contract in force. If Homan was concerned about Kaiser's noncompete agreement expiring during the litigation, Homan should have moved for a preliminary injunction. No one be punished because a former employer sat on its rights and failed to avail itself of this widely recognized remedy. A holding that noncompete agreements are tolled during litigation rewards the former employer that fails to act to protect its rights.

The bottom line, Homan notwithstanding – don't wait to enforce noncompete agreements. Temporary Restraining Orders and Preliminary injunctions are available to halt employees who are violating noncompetes, and should be timely used to enforce the agreement while its merits are litigated.

Congress introduces the Civil Rights Act of 2008

20 Democratic Senators (including Clinton and Obama) have sponsored the Civil Rights Act of 2008. It's basically a laundry list of pro-employee changes to virtually every federal employment statute. For example, it proposes to:

• eliminate damage caps under Title VII and the ADA.
• limit the "bona fide factor other than sex" defense under the Equal Pay Act.
• add compensatory and punitive damages to FLSA claims.
• amend the Federal Arbitration Act to prohibit clauses requiring arbitration of federal statutory claims.
• allow winning plaintiffs to recover expert fees.
• give the NLRB authority to award back pay to undocumented workers.
• require that ADEA disparate impact claims be analyzed the same as Title VII claims.
• condition states' receipts of federal funds on waivers of sovereign immunity under various federal employment statutes.

This bill has zero chance of becoming law under the current administration. It gives insight, however, into the labor and employment platform of whomever becomes the Democratic candidate for President. These changes would potentially be devastating for businesses litigating employment claims, and is one issue to keep in mind as you go the polls now and in November. [Hat tip: Workplace Prof Blog]

English-only debate is not going away

Since I last wrote on English-only workplace rules and Congress's attempt to prohibit legal challenges of them (Congress debates legality of English-only rules) the debate has continued. Yesterday, the New York Times gave its 2 cents:

Politicians like Senator Lamar Alexander, Republican of Tennessee, have jumped into the fray. Last year, Mr. Alexander introduced legislation to prevent the [EEOC] from suing over English-only rules. After that measure died in conference committee, he introduced a similar one in December.

"This bill’s not about affecting people's lunch hour or coffee break — it's about protecting the rights of employers to ensure their employees can communicate with each other and their customers during the working hours,” he said in a recent statement. "In America, requiring English in the workplace is not discrimination; it’s common sense."

Time out, everyone. Let’s think about what really makes sense here.

Certainly, safety issues arise in some workplaces. The Federal Aviation Administration, for example, requires air traffic controllers to "be able to speak English clearly enough to be understood over radios, intercoms, and similar communications equipment."

Managers may also need employees who can speak English to English-speaking customers. And they may hear complaints if English-speaking employees say they feel excluded or gossiped about when colleagues converse in another language. Such situations, in fact, gave rise to English-only rules in the first place.

The bottom line on this issue remains unchanged, and is largely grounded in common sense. English-only rules have their time and place. If you have a legitimate problem – such as safety, communication with customers, or communication among employee – such a rule will probably pass muster. If, however, you are enacting such a rule to discourage non-Americans from working at your place of business, or if the rule overreaches by banning foreign languages in non-work spaces (lunch rooms, etc.), you should prepare yourself to unsuccessfully defend a lawsuit. As long as immigration remains a hot political topic, this issue is not going away. Being smart about these rules, though, will help you from being stung by their legal traps.

Columbus Dispatch on military status discrimination

This morning's Columbus Dispatch reports on Ohio's ban on military status discrimination, which will go into effect on March 23. For some information on what this law protects, take a look at my January 10 post: Ohio to prohibit discrimination based on "military status". The Dispatch's article quotes me on some the new law's effects:

The courts will eventually decide how to interpret the new law, though it's not hard to guess what some interpretations might be, experts say. For example, gender-based discrimination is illegal, and courts have decided that means that sexual harassment is illegal, said Jonathan Hyman, a labor and employment lawyer with the Cleveland firm of Kohrman, Jackson & Krantz.

"It's not a stretch that harassment because of military status could be illegal," he said. In that interpretation, an employee who is anti-war could violate the law by making fun of an activated military member's service.

Even the most ardent opposition of the Iraq war would be hard pressed to be in favor of discrimination against the men and women who volunteer to serve and defend our country. Nevertheless, by including military status as a protected class in our employment discrimination laws, the claims based on political speech has the potential to be injected into private workplaces like never before. If military status is protected, then in all likelihood, harassment because of military status will be actionable. Heated workplace debates about war policy could turn into discrimination claims. When Ohio's courts are asked to interpret this statute in a harassment context (and trust me, they will be asked), I hope that they seriously consider free speech versus what is truly a hostile environment, and rule accordingly.

Remedies available for destruction of computer files

Employers can take a lot of internal steps to protect confidential and proprietary information. Confidentiality and non-disclosure policies, limiting distribution to a need-to-know basis, passwords to secure data, locks for file cabinets, and security cameras are some of the more common tools at an employer's disposal. One thing that is difficult to guard against, though, is a disgruntled employee purposely sabotaging or destroying data, which is exactly what Fox News is reporting happened to an architectural firm in Jacksonville, Florida. An employee saw a help-wanted ad in the newspaper for her job, assumed she was about to be fired, went into the office late at night, and erased 7 years' worth of drawings and blueprints worth $2.5 million.

In cases such as these, where an employee erases data, the employer has a federal statutory remedy – the Computer Fraud and Abuse Act. This criminal statute generally prohibits one from causing the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization to a protected computer.

The seminal case for employee liability under this statute is International Airport Centers v. Citrin. In that case, Citrin decided to quit his employment with IAC and going into business for himself. Before returning his laptop to IAC, he wiped the hard drive loading a secure-erasure program, permanently erasing all of the stored data. His intent was not only to prevent his employer from recovering his work product, but also to hide the improper conduct in which he had engaged before he decided to quit. The 7th Circuit permitted IAC to pursue a private cause of action against Citrin under the Computer Fraud and Abuse Act. To date, no Ohio Court that I am aware of has ruled on whether this liability is available under the CFAA.

While courts are still wrestling with the limits of the CFAA in the employment context, it provides employers with a powerful weapon against disgruntled employees and employees who seek to harm an employer for anti-competitive purposes. To try to deter this type of conduct in your workplace, think about putting language into employee handbooks that informs employees that it would be a violation of federal law to engage in this type of industrial espionage.

[Hat tip: Strategic HR Lawyer]