Smooth Transitions

Smooth Transitions

addressing the Legal issues arising from the departure of employees & Business breakups

So, is non-compete litigation on the rise?

Posted in Uncategorized



Determining whether non-compete litigation is on the rise or declining is a tough question to answer.  There is certainly anecdotal information – a lot of people have called me about enforcing a non-compete, but that’s not accurate.  A lawyer from Boston named Russell Beck puts together a nationwide chart every year that addresses this issue based on decisions from state and federal that involve non-compete and trade secret cases.noncompete-and-trade-secret-cases-survey-graph-201501171 Without getting into how his analysis works, his conclusion is that non-compete litigation has remained about the same the last few years and trade secret litigation has continued to increase.  Of course there is a mix between the two types of cases so there is some overlap.

Russell’s review is the closest thing I have seen to a real analysis of this issue.  We’ll never really know because a significant amount of cases are resolved without and opinion and could be decided at the temporary restraining or temporary injunction level or may just settle.  But Russell’s approach at least gives us some information in terms of trends.

So to answer the question, non-comepte litigation is not on the rise on a national basis.


Tatoos and Potential Employees

Posted in HR Issues
The pain tatoo.

The pain tatoo.

I read an interesting article in the Dallas Morning News about folks getting tatoos and bias against tatoos in the workplace. Some of the highlights:

  • a lot more younger people are getting tatoos and piercings;
  • some employers have outright bans on tatoos on the neck or face;
  • some of the older folks that run companies and hire people don’t like tatoos; and
  • by excluding potential employees based on tatoos, employers risk lawsuits and are excluding a large portion of applicant pools.

First, I haven’t run into any companies that exclude persons simply based on having a tatoo but I’m sure it’s something that might be considered or at least contribute to an interviewer’s impressions about a potential employee.  Second, employers have a lot of leeway in terms of hiring foks based on their appearance as long as it is not discriminatory.  For instance, I might make the decision not to hire you becasue you don’t dress appropriately or that hot pink dyed hair is not appropriate for the workplace.  Now if a tatoo is tied to religion we’re talking about an entirely different situation.

The article’s main point is that as social norms change so must workplace policies.  I don’t disagree with that, but we’re just not to a point where tatoos have reached total acceptance in the workplace, especially the more traditionally conservative occupations (doctors, lawyers, bankers, consultants etc.).  If a potential employee was really talented and qualified and had a tatoo that was on the wrist and not noticeable, it’s probably not a big deal.  Of course if it’s a tatoo with letters “pain” across the knuckles we have a different situation.

There are no hard and fast rules on tatoos and hypothetically an employee’s or applicant’s tatoo could invoke the protection of some state, federal, or local laws.  Of course this would be in very limited situations.  The point is it probably doesn’t make sense to have per say rules that exclude applicants becasue of a tatoo these days.

Recruiter Checklist for 2015

Posted in Placement Professionals


Here are a few thoughts for placement professionals to consider going into 2015:

  1. Be familiar with the Texas Occupations Code and all it requires and its implications.  Here is a link.  There are number of little nuggets there that should be considered.
  2. How do your contracts look?  I’ve written at length over the years over basic contract terms that should be considered including arbitration, venue, choice of law, and jury trial waivers.  Though no one is looking for a dispute – be prepared.
  3. What does your guarantee provision look like (if one is included)?  Make sure it is clearly written.
  4. If you handle searches on behalf of candidates, consider the same contract items. Are your compensation terms clear?
  5. How does your website look? Is it up to date and accurate in its representations?
  6. Does your business have the appropriate business entity?  Is it in good standing with the Texas Comptroller?

Good luck in 2015!

Respect for a Well Written Non-Compete

Posted in Non-Compete Agreements

I really enjoyed an article about Madison, Wisconsin based Epic Systems’s non-compete agreement and the comments of those former employees who were abiding by it.  There was some scuttlebutt about whether Epic was going to extend the term from 1 to 2 years.  Epic is big in the healthcare IT world and its ex-employees go on to consult for other companies on Epic software and make good money.

Based on the article it appears that most Epic employees respect the enforceability of the non-compete.  I would guess that some have tried to challenge it in the past and have been unsuccessful.  There is a signficant amount of time in the article devoted to Epic’s seriousness in protecting its intellectual property and the training it invests in its workers – hence the non-compete.  It’s not often you see an article focusing on the merits of a non-compete.  It seems like every story or article out there is about a non-compete that doesn’t make any sense.  Probably because a lot of them do not – see Jimmy John’s for example.

The point is a well-written, well-thought-out, and enforced non-compete agreements can go a long way to protecting a business. Too many times I see agreements that meet none of the cited criteria.  But when I am evaluating a well written agreement that I know the employer has a history of enforcing it goes a long way to informing my opinion on the enforceability of the agreement.  Most employeees and prospective employers don’t want to get into litigation over a non-compete.  If a business is going to use them, put the time and money necessary into preparing and if need be enforcing the agreement.  Once a company develops the reputation, like Epic, of enforcing an agreement it goes a long way towards thwarting a possible breach of the agreement.

Here is a link to the article I wrote for the Texas Lawyer earlier in the year providing non-comepte reccomendations.

Sports Employment Issues Vol 1

Posted in HR Issues

I like sports.  Some more than others.  The great thing about professional sports is that they provide us high profile and in some instances highly scrutinized employment situations.  Just look at the NFL this year.  We have had: (1) a suspension/reinstatement for Ray Rice related to domestic violence; (2) the suspension/appeal of Adrian Peterson for taking a switch to his son; and (3) the suspension of Cleveland wide receiver Josh Gordon for drug use.  These things run the gamut.  In addition to the employment relationships between the player and team, there is the overarching supervision of the National Football Leauge.  To make matters even more complicated there is the player’s union.

So I am going to attempt to identify some interesting anecdotes/stories from the world of sports.  Let me know your thoughts.

1.  Marshawn Lynch plays running back for the Seattle Seahawks.  He is very good.  He also doesn’t like giving interviews.  After a few fines from the NFL Lynch spent one week simply answering questions with the word “yea” and went with “nope” this past week.  No one knows what to do with him.  Obviously the intent of the league and team is to get players to provide information to the media and promote the game.  I’m not sure how you can force a player to provide better answers but we shall see.

2.  Liverpool striker Mario Balotelli is in hot water again over an instagram post.  Though the post was titled “Don’t Be a Racist!”  It went on to provide some racist commentary below.  Here is a link.  Seriously though, has something good ever come from an athlete’s social media post?  Balotelli has apologized but is being investigated.

3.  Coaching changes are in full swing now in the college ranks.  Bo Pelini was ousted at Nebraska over the weekend and others are to follow.  Firings aren’t always limited to head coaches to.  Case in point is Texas A&M letting go of its defensive coordinator.    This article has a great breakdown of the money college coaches make these days.  The interesting thing for Pelini and other high profile coaches is the buyout – Nebraska will have to pay him $7.65 million for the right to fire him.  Basically, these types of coaches have some serious serverance built into their agreements.

FitBit Data, Apple watches, what’s next in terms of possible evidence?

Posted in Trial and Pre-Trial Procedure, Uncategorized

The FitBit


A few years ago there was much discussion about the use of social media evidence in lawsuits.  The use continues and ranges from criminal prosecutions through non-compete disputes.  It’s amazing what will people will put in the public domain and gives social media can provide strong, sometimes permanent, information about whereabouts, communications, and even the physical condition of someone.  The use of this type of evidence continues and our courts continue to adapt to it.

Over the last couple of years we have also seen the rise activity trackers like Fitbits.  The technology allows folks to track how many steps they take in the day, whether they’re standing or sitting, heart rates, and even sleeping patterns.  Some companies even provide these types of devices as part of wellness programs and reward employees if they reach certain levels of activity.   The new Apple watch will have all of these activities built in as well as other workout information and feed it into a user’s iphone.

Recently, there was some press about a personal injury plaintiff using Fitbit evidence to compare the physical activity of the injured plaintiff with an uninjured person.  That could be pretty poweful evidence when a plaintiff could compare their “raw data” to that of someone who had not been injured.  Typically, Plaintiff’s are left with their own testimony and maybe some video or other evidence of what their day to day life is like.  The Fitbit data could actually bring somewhat objective data to the jury.  Of course a defendant could use the same data to disprove or minimize an injury.

The Apple Watch

Regardless of what party uses the evidence there is going to be more and more of it.  Apple’s latest device, its watch, will feature many of the data points offered by a Fitibit that will then route through a user’s Iphone or other Apple device.  The watch actually includes a heart rate monitor.  Just think of the data an Apple product user generates.  This could include: (1) communication data like email, text messages, or even information about phone calls; (2) location data from the Iphone; and (3) health/activity data as discussed above.

All of this information serves to recreate days and time periods at many different levels.  In non-compete disputes we can recreate what a defendant did in setting up a compeiting business or soliciting customers.  In a car wreck case we can recreate the events leading up to accident at the intersection.  The challenge for lawyers will be (1) knowing what data is out there; and (2) getting it through the discovery process.  Get ready for the discovery requests designed to obtain Fitbit data – it’s going to happen.

Have a Happy Thanksgiving.


Now is a good time to check those employment agreements.

Posted in HR Issues, Uncategorized



The end of 2014 is almost here.  Next week Thanksgiving and before you know it New Years.  Back in 2012 I made the following year end reccomendations:

  1. Is the company employee manual up to date – any changes necessary? – The end of the year is always a good time to review those policies and procedures and see how they worked in 2012. Often the year will show some deficiencies or problems with policies as they are applied.
  2. Are employee files up to date? Make sure all employees have acknowledged receiving the most recent HR manual or any changes to the manual.
  3. Are company employment agreements up to date? Make sure any employment agreements are updated or amended to reflect changes in ownership or term expiration. Quite often those agreements are forgotten about and there is no agreement in place.
  4. Make sure employees have signed off on all non-compete, non-solicit, or confidentiality agreements.
  5. Frequently the end of the year involves reviews. Make sure those reviews are acknowledged by the employee and make it to their employment files.

These remain good suggestions.  The law hasn’t changed that much and the traditional HR/Legal items employers should cover remain the same.

End of year is also a good time to have conversations with employees about where they are going.  If there is a poor peforming employee it might be time to discuss a transition.  There is never a good time for these discussions but employers owe it to their employees and it will be best for everyone in the long run.

Finally, end of year is also a good time to take stock of security.  I don’t necessarily mean whether the locks on the doors are strong (though that’s a good place to start).  What I mean is cybersecurity.  Are the companies’ trade secrets treated like trade secrets?  Is access restricted to this type of information and does the company keep track of who accesses this type of information?  These are all good things to consider as we move into 2015.






Texas Employers and Ebola

Posted in HR Issues


We have been at ground zero here in Dallas the last few weeks as the Ebola scare began with Thomas Eric Duncan and spread to two Presbyterian nurses that treated him.  (It was quite surreal to see a news helicopter hover over the home of one of the nurses’ which is only a few blocks from my house.)  Thankfully, Nurse Nina Pham and Amber Vinson beat Ebola and we have no active cases (knock on wood) here in Dallas.  Unfortunately there are ongoing cases in the US and the epidemic in Africa.

Ebola and other disesases present a number of issues for employers both in terms of protecting employees from the disease and protecting the privacy rights of the employee.  The scary thing is how many people a single person can come in contact with both from day to day activities and if they travel. Luckily, we have not seen a child come down with a case and then potentially expose a school.

So to begin with, what does an employer need to do in terms of protecting its employees?  What if an employee tests positive for Ebola?  What if an employee travels on an airplane with someone who has Ebola?  What can I tell my employees about employees who either have Ebola or were exposed?  All of these things have happened here.  The answers are not easy as we attempt to balance the priviacy rights of employees with the welfare rights of employees.

The first issue for any employer is what can it ask the employee about his or health condition?  Generally, an employer cannot ask anything about an employee’s health condition unless it relates to the job and there is a business necessity or (here is the key one) the employee’s medical condition poses a direct threat to the health or safety of the employee or others. Otherwise, the employer risks an ADA claim.

Unfortunately, we have no guidance from the EEOC on  Ebola yet but there was a Pandemic Preparedness article put together for the H1n1 Virus. The advice turns on whether a pandemic has been declared by the World Health Organization.  With respect to the African ebola outbreak in 2014, a pandemic has not been declared.  Instead the WHO has declared it to be a “Public Health Emergency of International Concern”.

As described in the guidelines, the employer is fairly limited in what it can do vis a vis an employee pre-pandemic.  For example an employer cannot:

  1. Ask if the employee has a compromised immune system that would make the employee susceptible to influenza; and
  2. Rescind a job offer if the applicant has a medical condition that would make the applicant susceptible to influenza.

Once the pandemic is declared the employer has a few more options.  For example:

  1. An employer may send home an employee if they display influenza-like symptoms.
  2. Ask an employee if they experiencing influenza-like symptoms.
  3. In some circumstances ask if an employee is returning from travel to locations where there is an outbreak; and
  4. Encourage telework and require infection control practices like handwashing.

There are a number of scenarios and questions contained in the article that would appear to relate to EBOLA as well.  Obviously, this a developing topic and the employer has to balance the privacy/health of the employee with that of the employer – not easy!  There is no one size fits all on this issue and I reccomend reaching out to a lawyer to consider before taking any action.

Today Texas announced its guidelines with respect to observing individuals with potential exposure.  It remains to be seen how these new guidelines will play out in the workplace.  Hopefully, we won’t find out in the near future.