Smooth Transitions : Rob Radcliff : Texas Non-Compete Lawyer & Attorney : Langley Weinstein LLP Law Firm : Dallas Employment & Employee Departures : Smooth Transitions Law Blog

                        

A few weeks ago we discussed a Texas employer hiring new employees based upon their Body Mass Index.  The dangers of considering weight in employment decisions were recently exemplified in a press release from the EEOC. 

In that release, it was announced that a treatment facility for chemically dependent women and children was paying $125,000 to settle a disability discrimination suit filed in September 2010 by the EEOC.  The suit alleged that the employer violated the ADA because it fired a former employee because of her disability, severe obesity, even though she was able to perform the essential functions of her job.  Unfortunately, the employee died prior to the suit being filed.  The EEOC's take on the settlement:

All people with a disability who are qualified for their position are protected from unlawful discrimination,” said EEOC General Counsel David Lopez.  “Severe obesity is no exception.  It is important for employers to realize that stereotypes, myths, and biases about that condition should not be the basis of employment decisions.

Courts have previously concluded that severe obesity may qualify as a disability regardless of whether it is caused by a physiological disorder.  Hiring or firing policies based on weight may be actionable.  Employers need to tread lightly if they are going to consider weight in a hiring/firing decision.(H/T disability law.blogspot.com)                      

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Texas Tech won  its appeal against Mike Leach and his claims for millions of dollars in compensation are gone.  The Seventh Court of Appeals, based in Amarillo,  recently took up Texas Tech's claim of sovereign immunity and reversed the  trial court, finding in Tech's favor. 

The Court ruled in its opinion that Leach cannot maintain a breach of contract claim against the university under the doctrine of sovereign immunity.  This means Leach will be unable to pursue claims for the millions of dollars he claimed he was entitled to under the terms of his contract.  There are some remaining issues that the trial court will address, but the big money claims are off the table for now.  Leach's attorney's have stated they will appeal to the Texas Supreme Court and not surprisingly were unhappy with the ruling:

In essence, the doctrine permits state institutions such as Texas Tech to deny a man’s written contractual rights and steal his hard-earned labor while paying nothing. . . That is not fair and not what Texas and its citizens stand for.

Sovereign immunity is a complicated, but suffice it to say a Plaintiff is bringing suit against a governmental entity has an uphill battle.  Leach is not coaching and will have to wait on the Texas Supreme Court to see if he can refile his breach of contract claim.  We will keep you posted.

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 Here is a link to an article discussing some "different" questions asked during interviews this past year. Some  favorites:

• "There are three boxes, one contains only apples, one contains only oranges, and one contains both apples and oranges. The boxes have been incorrectly labeled such that no label identifies the actual contents of the box it labels. Opening just one box, and without looking in the box, you take out one piece of fruit. By looking at the fruit, how can you immediately label all of the boxes correctly?" -- Asked for a software QA engineer position at Apple.
• You are in a dark room with no light. You need matching socks for your interview and you have 19 gray socks and 25 black socks. What are the chances you will get a matching pair?" -- Asked for a quality assurance position at Eze Castle.
• What do wood and alcohol have in common? -- Asked for a staff writer position at Guardsmark.
• You are in charge of 20 people. Organize them to figure out how many bicycles were sold in your area last year." -- Asked for a field engineer position at Schlumberger.

Some of them are funny, some of the tough to answer, but hopefully all give some insight into the job candidate and are related to what he or she will be doing.  Make sure anyone conducting interviews on behalf of the company asks appropriate and legal questions.  A script is nice but the standard questions may not get you the insight to the person you need.  Asking "illegal" questions can be easily avoided.

 

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A while back we discussed the DOJ's investigation into allegations that technology giants in Silicon Valley were effectively preventing computer programmers from making job changes by agreeing not to poach their competitors' employees.

Last week the DOJ filed a lawsuit along with a proposed settlement with Apple Inc., Adobe Systems Inc., Google Inc., Intel Corp., Intuit Inc. and Walt Disney Co.’s Pixar that will prevent these employers from agreeing not to poach one each others' employees.  

Basically it goes something like this.  We agree that my recruiters won't cold call your employees and your recruiters won't cold call my employees.  That way we can keep them from moving - or at least slow down movement.  The DOJ didn't like this practice because it violates anti-trust laws.   Here is a redacted email that was between Google and a prospective Apple candidate:

From: XXXXX XXXXX <XXXXX@google.com>
Date: XXXXXXX XX, 2008 X:XX:XX AM PDT
Subject: Re: Google Opportunities- Follow up email…

Thanks for getting back to me.  I don’t believe that we have been in
contact previously - apologies if I am wrong about this.

From your reference to the [APPLE DIVISION], I take it that you are
currently working there.  If this is the case, we will not be able to
proceed with your application.  Google has an agreement with Apple
that we will not cold call their staff.  If you are not currently
working at Apple and are interested in learning more about [A GOOGLE DIVISION]
please let me know and I would be happy to chat with you.

Thank you again for returning my email

 

What's interesting about the practice is the effect of California's disdain for non-competes.  In Texas an employer could simply attempt to lock down the employee for some reasonable period of time with a non-compete agreement.  Not in California - Exhibit A is Mark Hurd who recently went from HP to Oracle.  Would the practice these companies allegedly engaged in have been necessary if there was an enforceable non-compete?  Probably not.  The question remains how many other employers, in other industries, have the same or similar practice?

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It's that time of year - the NFL season is drawing to a close and fantasy football leagues are in the midst of the playoffs.  Fantasy leagues are as popular as ever and cover all sports, not just football.  Fantasy leagues based on the NFL are by far the most popular and in many instances are comprised of co-workers and in some cases the use of company resources like email.

Which leads us to the firing of four employees in Fidelity Investments' Westlake, Texas office for playing Fantasy football.  Fidelity's take on the firing:

We have clear policies that relate to gambling. Participation in any form of gambling through the use of Fidelity time or equipment or any other company resource is prohibited. In addition to being illegal in a lot of places, it can also be disruptive. We want our employees to be focused on our customers and clients.

One of those fired, Cameron Pettigrew, knew that Fidelity did not permit playing fantasy on company time but claimed he never used company email for the league.  Fidelity did find two instant messages that included fantasy content.  Pettigrew explained:

One of my buddies sent me something about how bad Trent Edwards was playing or something like that, So they called me in and talked to me for about 90 minutes on everything I ever knew about fantasy football. They interrogated me as though I was some sort of international gambling kingpin. Then they released me for the day, and I was like, 'OK.’ I never thought they’d fire me for this, but, the next day, I get the call saying I had been terminated.

Tough time of year to be fired and Pettigrew knew he wasn't allowed to play at work, but was he really playing?  The Ft. Worth Star Telegram asked its readers if Fidelity overreacted:

Did Fidelity overreact by firing fantasy football players?
(1) No. (19%, 60 votes)
(2)Yes. (57%, 185 votes)
(3)Depends. (There's no way outsiders can know the whole story.) (24%, 78 votes) 

It seems unlikely that Pettigrew and his cohorts have any legal challenges to the firing as Texas is an at-will employment state.   If a company has a policy against playing in a fantasy league during work time, don't play.
 

 

 

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High-tech companies have been vigorous in their attempts to keep employees from departing to competitors as evidenced by the Mark Papermaster lawsuit filed by IBM and Steven Johnson case.  According to some reports, Google and Microsoft entered into an unofficial agreement not to poach each others' employees.  Essentially, neither company would actively pursue or recruit the company's talent. 

Here is a redacted email that was included in the TechCrunch report between Google and a prospective Apple candidate:

From: XXXXX XXXXX <XXXXX@google.com>
Date: XXXXXXX XX, 2008 X:XX:XX AM PDT
Subject: Re: Google Opportunities- Follow up email…

Thanks for getting back to me.  I don’t believe that we have been in
contact previously - apologies if I am wrong about this.

From your reference to the [APPLE DIVISION], I take it that you are
currently working there.  If this is the case, we will not be able to
proceed with your application.  Google has an agreement with Apple
that we will not cold call their staff.  If you are not currently
working at Apple and are interested in learning more about [A GOOGLE DIVISION]
please let me know and I would be happy to chat with you.

Thank you again for returning my email.

Both companies are headquartered in California making the enforcement of a non-compete almost impossible.  Of course, this type of agreement could violate antitrust laws and according to the Washington Post, the Justice Department has launched a probe into the alleged practice.

 

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All employment relationships in Texas are presumed to be at-will, meaning an employer can fire an employee with or without cause. There are of course, exceptions.   Rebutting the presumption of at-will employment is an uphill battle. 

In Cahak v. Rehab Care Group, Inc., a 2008 Waco Court of Appeals case, the  Court affirmed a trial court’s granting of summary judgment on John Cahak’s claims against his former employer. Cahak was hired in 1997 by Rehab as a program director for one of its rehabilitation units   After a poor performance review, Cahak was given two options: (1) continue employment with Rehab, “as needed”, and Rehab would assist with developing Cahak’s management skills; or (2) a six-week severance plan. The “as needed” basis placed no obligation on Rehab to provide Cahak with ongoing employment.  Cahak was eventually fired by Rehab after he was caught working for another employer while he was supposedly injured.

Cahak claimed in his lawsuit that Rehab’s offer to continue his employment as long as he participated in a management development program altered his at-will status.  The Court ruled that his fraud claim, based on alleged misrepresentations by Rehab of continued employment, failed because an at-will employee is barred from bringing a fraud claim against his former employer based upon its decision to discharge the employee.

To prove his negligent misrepresentation claim, Cahak had to establish Rehab misrepresented an existing fact rather than a promise of future conduct.  Because the alleged promise made by Rehab of continued employment was a promise of future conduct, rather than statements of existing facts, the Court affirmed summary judgment on Cahak’s negligent misrepresentation claim. 

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Two weeks ago on the Office, Michael Scott gave Dunder Mifflin notice of his  resignation. Upon return to Scranton, Michael hatched a plan to start Michael Scott Paper Company and started with some due diligence (I apologize for the advertisement but NBC has to pay the bills):

Michael then asked most of the Scranton staff to come to his new company and started working on putting together  paper order forms.  Eventually the higher-ups got wind of Michael's new venture:

Unfortunately, for Michael there is no two week "immunity" period. Employees in Texas can set the stages for starting a competing venture (assuming there is no non-compete or other restrictive agreement) on their own time, but not while at work.  The good news for Michael is that Pam the receptionist left Dunder Mifflin to join Michael.

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With employers aggressively protecting customers and trade-secrets with non-compete agreements,  placement and human resource professionals will continue to encounter potential candidates/employees that have non-compete agreements and other restrictive covenants.   

Every employment interview should include exploration into these issues. 

Below are some suggested questions/considerations:

• Has the candidate signed a non-compete, non-solicitation, or non-disclosure agreement?  If so, request a copy.
• Does the scope of the non-compete conflict with the proposed employment? Is the candidate working in the same industry? Does the scope of the non-compete include the proposed geographic location?  What is the duration of the non-compete?
• Is there a choice of law or venue provision in the non-compete?   The enforceability of a non-compete will vary from state to state.
• Is the non-compete enforceable?  It may not be, but the best bet is to talk to a lawyer.  
• Gather intelligence: has the former employer sued to enforce its non-compete previously? 
• Is there any potential that the candidate could resolve the non-compete with a buy-out or some other agreement? 
• Is litigation an acceptable risk for the new employer?
• If there is a non-solicit, can the employee work within the parameters of the non-solicit?  Many times non-solicits are simply non-competes with a different name.  Some non-solicits only prevent the former employee from contacting former customers.  In that case, there is nothing that prevents the customer from contacting the employee. 
• Remember, that any communications you have with a prospective employee might be subject to production in a lawsuit.  Be smart about email.

Going through the time and expense of hiring or placing someone to find out their ex-employer has filed a non-compete lawsuit would be devastating.  The questions above are a good starting point for screening, but a lawyer should always be consulted.

 

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Chances are you or someone you know is on Facebook, MySpace, or LinkedIn. Google yourself and you'll probably see a LinkedIn or Facebook biography. Potential employers and recruiters will see the same information during the hiring process.

When I prepare for a deposition I always do basic Internet research on a witness. It's probably a safe assumption that business prospects and competitors are doing the same thing. This type of screening is cheap, quick, and turns up all sorts of information from previous employment, education, civic involvement, and even your time in the neighborhood fun run.

The reality is the Internet now documents all aspects of our lives. An Internet biography is being updated in real time for each of us and has a wide range of content. Social networking tools are wonderful in theory, but they contribute to our Internet biography.

There is no reason to quit updating your Facebook status. But as with anything in writing, assume it will be seen by all, not just your Facebook friends. Welcome to the reality of Web 2.0.

Disclaimer

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