Not every employee needs a noncompete

Noncompetition agreements are fabulous tools. They protect employer’s trade secrets and other confidential and proprietary information, customers, goodwill, and special training and skills your employees acquire at your expense. But, not every employee is worthy of locking down with such an agreement.

For example, consider Mark Philips Salon & Spa v. Blessing (Ohio Ct. App. 1/28/11) [pdf]. The salon hired Blessing as a hair stylist. Blessing signed a noncompetition agreement on her first day of employment. When she resigned to accept a position at a competing salon less than five miles away, she got sued. Even though Blessing admitted that she violated the agreement by soliciting former customers, the court of appeals concluded that it was unreasonable for the salon to enforce the agreement against her:

Blessing testified that she was an experienced hair dresser and had worked for two other salons previous to her employment with MPS. Blessing brought approximately thirty clients with her to MPS, and while there she acquired approximately twenty more. Blessing testified that virtually all of her clients are obtained through referrals from other clients, and there is no evidence that MPS did anything that benefitted Blessing in obtaining any of her clients. Blessing also testified that MPS gave her no particular training or skill that she uses…. Blessing testified that after she left MPS she created a list of all her former clients “from my brain, from my knowledge.” There is no evidence that she obtained that information from a database or list maintained by MPS.

By engaging in competition with MPS as she has, and especially by mailing solicitations to clients she obtained while employed by MPS, Blessing violated her agreement with MPS in those respects. However, on this record there is nothing in the competition with MPS in which Blessing has engaged that makes it unfair. Blessing uses no trade secrets or competitive advantages she obtained from MPS. The competition MPS seeks to prevent is merely ordinary competition. Therefore, the covenant not to compete cannot be enforced.

What lessons can employers learn from this case? Noncompetition agreements are wonderful tools that all employers should have in their shed. Employers, however, should use narrowly drafted noncompetition agreements that only reach those legitimate interests worthy of protection. And, if there is no such interest, consider foregoing an agreement at all. Otherwise, you might end up spending lots of money in court in a vain attempt to enforce an unenforceable contract.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #162 (the bad necktie edition)

I am an expat Philadelphian. When the Eagles came to Cleveland in 2004, I wore my Donovan McNabb jersey with pride inside Browns Stadium, and endures the tirades, insults, curses, and the occasional hails of popcorn, peanuts, and beer from loyal Browns fans. But, if the Eagles were playing the Browns in the Superbowl (I know, I know), I would likely draw the line at wearing my gear to the office. It’s not that wouldn’t enjoy jabbing my co-workers (because I would). But, I work in a service-based industry, and the thought of rubbing even one client the wrong way would my hats, jerseys, and ties at home. One Packers fan selling cars in Chicago thought otherwise last week, and it cost him his job when he refused his boss’s repeated requests to remove his Packers tie. The following blogs have the details:

• Packers Necktie Gets Salesman Punted from Chicago-Area Dealership – from Human Resources News

• Fired for wearing a Packer tie – from Minding the Workplace

• Packers Fan Fired Over Team Necktie; Will Litigation Ensue? – from Above the Law

• Apparently, Someone Isn’t a Packers Fan – from Workplace Prof Blog

• Chicago Car Salesman Fired for Wearing Green Bay Packer Tie – from Wisconsin Employment & Labor Law Blog

• Take Your Tie And Go “Packing” – from HR HQ

• Wearing Packers Necktie Gets Chicago Salesman Fired – from New Jersey Employment Law Blog

• At will and the auto salesman – from Michigan Employment Law Connection

Here’s the rest of what I read this week:

Discrimination

• Jewish Hockey Player Sues Anaheim Ducks Alleging Anti-Semitic Harassment – from Deadspin

• Employees and religious holidays – an employer’s obligation – from Employment Law Bits

• Age Discrimination in 2011 – from Michael Haberman’s Omega HR Solutions

• What Discrimination Looks Like in 2011: It’s Older and Unemployed – from TLNT

• The Genetic Information Nondiscrimination Act and The Mentalist – from Screw You Guys, I’m Going Home

• Is Obesity Covered by the ADA? – from Colorado Employment Law Blog

• Alabama Jury Awards Employee Taunted with KKK Hood – from Alabama HR Law

Social Media

• The Facebook Employment Background Check Curse – from Nick Fishman’s employeescreenIQ Blog

• Facebook Becoming Essential to an Employment Lawsuit – from Tom Crane’s San Antonio Employment Law Blog

• Social Media Research + Employment Decisions: May Be a Recipe for Litigation – from Labor Employment Law Blog

• Employers Can Pay Dearly for Social Media Blunders – from Joe’s HR and Benefits Blog

• More courts ordering access to Facebook posts – from Walter Olson’s Overlawyered

• Following The NLRB On Facebook Firings – from Social Media Employment Law Blog

• Who Do Your Tweets Represent? You? Or Your Employer? – from Fistful of Talent

• Lawyers Can Demonstrate the Need for Social-Media Policies In More Ways than One – from Delaware Employment Law Blog

Workplace Technology

• Behind the Resume – from Attorney at Work

• Judge Says It’s Reasonable For Any Photo Taken To Go Viral. A Dangerous Precedent? – from Kashmir Hill’s The Not-So Private Parts

• 10 Fascinating Facts About Email – from Mashable

• Potential Civil Liability for Unauthorized Access to Another’s Email Account – from Ohio Family Law Blog

Wage & Hour

• MMA Body Slam of $3.2 Million – from Michael Fox’s Jottings By An Employer’s Lawyer

• Fired Employee Entitled To Overtime Pay – from Overtime Lawyer Blog

• MBA Sues DOL Over Whether Mortgage Brokers Are Exempt from Overtime – from Overtime Advisor

• Mootness As A Defense To Extortionate FLSA Collective Actions – from LE Blog

• Ninth Circuit Clarifies Meaning of “Voluntary Departure” Under WARN Act – from World of Work

• Employees who stop coming to work because business is closing are entitled to 60-day notice under the WARN Act – from Employment Law Matters

• FMLA intermittent leave: Why bosses must be observant – from Stephen Meyer’s HR Cafe

Employee Relations and HR

• Do Amazing Things in 2011 – from Ann Bares’s Compensation Force

• PA employee sleeps on the job and still collects unemployment – from The Employer Handbook Blog

• Focus on Workplace Flexibility–Main Themes – from Work and Family Blog

• Deposition jujitsu – from Work Matters

Trade Secrets and Employee Competition

• Does Texas Law Recognize a Claim against Competitor’s Poaching of Employee? – from Texas Employment Law Update

• Fitness Companies Spar Over Unauthorized Access Of Departing Employee’s Personal Email Accounts – from Trading Secrets

• When is it okay for an employee to steal trade secrets? – from Trade Secrets & Non-Compete Blog

• Steelers’ Secret Trick Play May Have Been Shared With Jets By ESPN Reporter – from Trade Secrets Blog

Labor Relations

• Unions are a Dying Breed. Or They’re Making a Comeback – from Daniel Schwartz’s Connecticut Employment Law Blog

• President Obama Re-Submits Nomination of Craig Becker to NLRB – from Labor Relations Today

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

When two worlds collide ... hilarity ensues

Last night, the self-proclaimed world's greatest bosses met for the first time. Michael Scott, meet David Brent:

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Union membership at lowest level in nearly 80 years

The Bureau of Labor Statistics has released its annual report of union membership, and the news isn’t good for organized labor. Unions lost 612,000 members in 2010, dropping the unionized share of the work force from 12.3% to 11.9%. Union membership in the private sector fell from 7.2% to 6.9%, its lowest proportional share since the 1930s. You can read BLS’s summary here, and the full report here.

Employers may read this news as positive. I have a different take. With efforts to bolster organized labor having failed in Congress, today’s pro-union National Labor Relations Board may use these statistics to bolster their efforts to beef up organized labor. I will be very curious to see what these numbers look like after two years of pro-union regulation by the NLRB.

[Hat tip: Labor Relations Today]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Why you never ask a woman if she’s pregnant

Australian broadcaster Todd Woodbridge thought that tennis star Kim Clijsters was pregnant. His problem, however, was that he did not keep it to himself. Instead, he texted his thoughts to another player. When Clijsters found out, she took the story public, outing Woodbridge’s lack of sensitivity during a post-match television interview.

It remains to be seen if Woodbridge keeps his Aussie TV gig. That Clijsters was so good natured about the crass message may help his cause. Don’t assume, however, that your female employees will be so forgiving.

I don’t know what will happen to Woodbridge’s job, but I can almost guarantee you will lose your discrimination case if a rejected job applicant has a text message asking if she appeared irritable and if her boobs looked bigger. Text messages, social media, and other technology make it much easier to share these types of thoughts. Because of these technologies, he said/she said cases no longer necessarily hinge on credibility debates. Instead, the employee may be holding that text or tweet as a dangerous trump card.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Join me Friday on the Proactive Employer Podcast

Join me Friday morning as I guest on the one-year anniversary installment of Stephanie Thomas’s Proactive Employer Podcast. Stephanie and I will be talking about ten issues of importance to every employer:

1. Documentation and document retention
2. Applications, background checks and new hires
3. Confidentiality
4. Technology
5. EEO: discrimination, harassment, and retaliation
6. Wage and hour issues
7. FMLA and benefits
8. Immigration
9. Health, safety, and security
10. Evaluation, discipline, and termination

I’ll provide some suggestions on best practices to identify potential problem areas. Stephanie and I culled these 10 issues from my proprietary 200-point audit of human resources and employment policies and practices. Please join us for a lively and informative discussion that should interest all businesses.

The podcast will be live on blogtalkradio at 8:30 am on Friday, January 28. Blogtalkradio will also archive it for later listening. The podcast will also be available for download on iTunes.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

It’s déjà vu all over again—Supreme Court recognizes associational retaliation

In The Gay Science, Friedrich Nietzsche explained his theory of the eternal recurrence—that if the universe is infinitely big, time is eternally long, and everything that exists in that universe is made up of a finite number of elements, then over the course of eternity everything that happens will happen again. For the theory of associational retaliation under Title VII, eternity didn’t even last four years.

In Thompson v. North American Stainless, the 6th Circuit originally recognized the theory of associational retaliation – that Title VII prohibits an employer from retaliating by inflicting reprisals on a third party (such as a spouse, family member, or fiancé) closely associated with the employee who engaged in such protected activity but who engaged in no protected activity of his or her own.

Sometimes, it stinks to be right. In its unanimous opinion [pdf], the Court recognized that certain employees, within the “zone of interests” protected by Title VII, will have a valid claim for associational retaliation:

Title VII’s antiretaliation pro­vision prohibits any employer action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” … We think it obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired…. We … decline to identify a fixed class of relation­ ships for which third-party reprisals are unlawful. We expect that firing a close family member will almost al­ways meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize…. 

[W]e conclude that Thompson falls within the zone of interests protected by Title VII. Thompson was an employee of NAS, and the purpose of Title VII is to protect employees from their employers’ unlawful actions. Moreover, accepting the facts as alleged, Thompson is not an accidental victim of the retaliation—collateral damage, so to speak, of the employer’s unlawful act. To the contrary, injuring him was the employer’s intended means of harming Regalado. Hurting him was the unlawful act by which the employer punished her. In those circumstances, we think Thompson well within the zone of interests sought to be protected by Title VII.

What does all this mean?

1. This supposed pro-business Court continues to be decidedly anti-business when it comes to protecting employees from retaliation, and even the most conservative members of this Court are open to expanding civil rights when it satisfies a policy they consider important.
2. Employers are now subject to retaliation for taking an adverse action against anyone “closely related” to an employee who engaged in protect activity.
3. To claim associational retaliation, the aggrieved employee must prove that the employer intended to injure the associated employee by its action against the aggrieved employee.

For employers, there are no bright-line rules for associational retaliation. The real import of this decision is the same as when the 6th Circuit first recognized this new theory of liability nearly four years ago. As I said at that time:

If Title VII protects those "who are so closely related to or associated" with employees who engage in protected activity, it simply begs the question, how close is close enough? In Thompson, the relationship was a fiancée. It is safe to assume liability will also extend to action taken against spouses. What about boyfriends and girlfriends? How long do you have to date to be protected from retaliation? The same protection also will probably extend to parents and children. What about siblings? Grandparents? Cousins? 3rd cousins twice removed? In-laws? Friends? Carpoolers? The people you share your lunch table with? The person you sat next to in 3rd grade? How close is close enough for an employer to intend for its actions to punish the exercise of protected activity? Do employers now have to ask for family trees and class pictures as part of the orientation process? 

These questions, none of which the Thompson court answers, could hamstring employers from making any employment decisions for fear of doing something against someone who has some relationship to someone else who complained about something last October. The implications of this case have the potential to reach that level of silliness. The best course of action is still to make legitimate personnel decisions for bona fide business reasons and let the chips fall where they may.