02.18.16
EXITING EMPLOYEES WITH NON-COMPETE AGREEMENTS: BEST PRACTICES
The new calendar year brings a new fiscal year for many companies. Year-end bonuses have been paid, and talent waiting for that comp before resigning are now starting to give notice and pursue new opportunities. Inevitably, many resigning employees are heading for competitors, potentially in positions that run afoul of restrictive covenant agreements (“RCAs;” i.e, agreements with non-compete and/or non-solicit provisions) and/or put trade secrets/client relationships directly at risk. While each situation is different, below are some best practices for exiting employees that have RCAs:
There is no “one size fits all” for dealing with key talent departures, whether or not that employee has an RCA. However, companies benefit from having in place processes where the key stakeholders can promptly be notified of these departures and gain access to the information needed to assess how best to protect and preserve the company’s rights. Thinking through departure issues ahead of time will allow companies to protect their trade secrets.
By Jonathan S. Krause
jkrause@klehr.com
POLITICAL BELIEFS – CAN THEY GET YOU FIRED?
As the next presidential election draws near, talking politics in the workplace seems inevitable. But can it get you fired? The answer to that question most likely depends on what state you work in.
Generally speaking, employees working for private employers do not have unrestricted rights to “free speech” in the workplace. Rather, the protections under the First Amendment typically apply only to government action/censorship. Private sector employers are free to regulate political speech in the workplace for legitimate business reasons (such as regulations to prevent disruption to business operations). Furthermore, there is no protection under federal discrimination laws from termination or discipline based on political affiliation or activity.
However, there are still some political activities in the workplace that may be protected. For example, under the National Labor Relations Act (“NLRA”), non-disruptive political advocacy for or against a specific issue related to workplace conditions (for example, minimum wage rate, employee benefits, etc.) is generally protected, in both union and non-union workplaces, as long as such activity is conducted during non-work hours and in non-work areas. In addition, many states have laws regulating employee political speech and activity:
Private sector employers should exercise care before disciplining or terminating employees based on political activity or speech in the workplace, and should consult with their labor and employment counsel on the state and local laws that cover their workers.
By: Carianne P. Torrissi
ctorrissi@klehr.com
CAUTION – UNPAID BREAKS CAN LEAD TO SIGNIFICANT LIABILITY
Whether breaks for non-exempt employees are considered compensable time under the Fair Labor Standards Act (“FLSA”) can be confusing and a source of liability for employers. However, a couple of recent federal court decisions offer employers some guidance in this area.
According to one U.S. Department of Labor (“DOL”) regulation, meal breaks where the employee is “completely relieved of duty for the purpose of eating” do not count as compensable time. But what if the employer places certain restrictions on non-exempt employees during an unpaid meal break? In Babcock v. Butler County, the Third Circuit recently clarified that whether restrictions convert an otherwise unpaid meal break into compensable time under the FLSA is determined by the predominant benefits test.
In Babcock, a corrections officer, on behalf of herself and others similarly situated, alleged a failure to pay overtime when they were not compensated for all time spent on their meal breaks. The corrections officers were scheduled to work in eight and one-half hour shifts, with a one hour meal break. Forty-five minutes of the meal break were paid while fifteen minutes were unpaid. During the entire meal period, the officers were not allowed to leave the prison without permission and were required to remain in uniform, in close proximity to emergency response equipment, and on call to respond to an emergency. Plaintiffs claimed that, because of these restrictions, they did not have complete freedom to do as they wished during the breaks – like run errands or sleep. Thus, they contended that the entire meal period should be compensated.
Two tests have been applied by other circuit courts to determine if a meal period is compensable: one test looks at whether the employee has been relieved of all duties during meal time, and the other test looks at which party received the “predominant benefit” of the meal time. The Babcock court adopted the latter test, joining all other circuits (except the Ninth Circuit) that have decided this issue. In so holding, the Third Circuit explained that, while the pertinent DOL regulation provides that a “bona fide meal period” is one in which an employee must be completely relieved from duty, that regulation does not have the force of law and generally has been eschewed by courts. Courts instead have looked to the totality of the circumstances to determine who benefits from the meal period. Thus, the inquiry is necessarily a fact intensive one.
Meal breaks, though, are not the only source of potential liability for employers. A December decision by one Eastern District of Pennsylvania court reiterated the risk employers face by not paying their non-exempt employees for short rest breaks. In Perez v. American Future Systems, Inc., the court determined that an employer’s policy of requiring non-exempt employees to log off and not be paid for any break during the day – even a break to use the restroom – was a violation of the FLSA. In making its decision, the court relied on another DOL regulation, which states that rest periods up to 20 minutes must be treated as compensable time.
So what should employers take away from these decisions? First, whether a meal break is considered compensable time based on the predominate benefits test is a fact-intensive inquiry. Second, if a non-exempt employee is required to perform any work during their meal break that results in an actual interruption of the break, then that employee should be compensated for their entire meal break. Third, employers should treat any breaks under 20 minutes as compensable time for non-exempt employees.
Whether breaks for non-exempt employees should be treated as compensable time can present significant liability concerns for employers. These issues can easily become an expensive class action lawsuit, involving many employees and hundreds or even thousands of hours in unpaid compensable time. Additionally, employers may not only be liable for unpaid wages, but they may also be liable for liquidated damages.
By: Lee D. Moylan and Zachary D. Sanders
lmoylan@klehr.com
zsanders@klehr.com.