Tomorrow, I have the privilege of speaking to the Executive Search Owners Association. Over the years I have had the privilege of representing placement professionals in a number of circumstances. Some tips:

  1. Make sure your engagement agreements/contracts make sense and are enforceable;
  2. Remember that non-competes and non-solicitation agreements in Texas can be enforceable;
  3. Screen your candidates to determine if they have entered into a non-compete or non-solicit;
  4. Remember that if someone you placed is sued it is likely that their new employer will be as well;
  5. Protect your candidate and client information – that information can be a trade secret;
  6. Make sure you are in compliance with the Texas Occupations Code;
  7. A little money spent on an attorney up front can save a lot of money down the road;
  8. Be factual when you talk about a potential employer;
  9. Don’t give legal advice; and
  10. If you sign an agreement prepare to have to comply with it.

Below are some resources and previous writings placement professionals might find of use:

Some COVID-19 Links for employers:

 

Yesterday Judge Jenkins entered a revised stay at home order –  March 29 Dallas County Order – that impacts the way construction companies in Dallas County do business.  Some highlights:

  • If a worker has a temperature above 99.6 degrees they have to stay at home;
  • Employer must check worker’s temperature;
  • Shift work mandatory – basically split crews by 50%;
  • No gatherings during breaks/meals;
  • Requirements for hand washing, soap and hand sanitizer, and 1 toilet for every 15 workers;
  • No retaliation against an employee who self-quarantines or is advised to self-quarantine; and
  • Each site must designate a COVID-19 safety monitor.

A violation of the order is a misdemeanor punishable by a fine not to exceed $1,000 or jail time no to exceed 180 days.

This version of the order expires on April 3.

We will continue to track this.  As this pandemic continues expect further refinement of the order for specific businesses.  Austin currently has an order in place that prevents most construction.

 

 

More regulations are to follow, but here is a link to the FAQ from the Department of Labor.

Some highlights:

  • In effect on April 1 – Not April 2 as originally calculated;
  • Applies to employers with less than 500 employees – Integrated Employer Test used just like traditional FMLA;
  • There is an exemption for those with less than 50 employees that can’t afford it and can justify it (still no details on this);
  • Discusses how to calculate benefits for part-time workers and how overtime is considered;
  • Paid sick leave is capped at 80 hours period – it doesn’t start over for separate incidents; and
  • Paid FMLA only applies to COVID-19 reasons.

 

 

Last night County Judge Clay Jenkins went over the contents of a shelter in place order that goes into effect tonight (3/23/20) at 11:59 pm.  The basis for the order is to prevent an overrun of North Texas hospitals and the projections are here.  Hopefully we never get there.  The complete text of the order can be found here – Dallas County Shelter in Place (thanks to Texas Tribune) and covers a wide range of items from appropriate social distance to what businesses are deemed essential.  Here is what business owners and employees need to know:

  1. This applies to individual who reside in Dallas County and work in Dallas County – Yes, it applies to employees even if you don’t work in Dallas County but reside in Dallas County;
  2. It goes into effect tonight at midnight and ends April 3 (for now);
  3. If you can work from home/telework this does not apply to you or your business;
  4. This doesn’t apply to restaurants that provide take-out or grocery stores, drug stores etc.; and
  5. This doesn’t apply to Essential Businesses.

Does your company/employer fall within an essential business exception?  Let’s walk through them:

Essential Health Care Operations (pretty straightforward)

Essential Government Functions

Essential Critical Infrastructure (airports, oil, construction, public transportation etc.)

Essential Retail (food stores, takeout, gas stations, dry cleaners etc.)

Providers of Basic Necessities to Economically Disadvantaged Populations
Essential Services Necessary to Maintain Essential Operations of Residences or Other Essential Businesses.
Newsmedia (self-explanatory) 

Childcare Services (services for parents of children who are working for an Essential Business)

It remains to be seen whether other North Texas counties follow suit as called for by Judge Jenkins.  Tarrant County declined to adopt similar orders last night and neither Collin nor Denton are there yet.  We will continue to to monitor the situation.  We expect there will be lay offs to follow as many small businesses will be unable to make payroll if they are not in business.

 

The President signed the Families First CoronaVirus Response Act last night after the Senate approved the measure earlier in the day.  Though the scope of the legislation is much broader our focus is sick pay and expanded FMLA leave.  What it means for employers:

The When and Who

  1. Goes into effect on April 2, 2020 and sunsets on December 31, 2020
  2. Only impacts employers with 500 employees or less
  3. Companies with 50 or fewer employees can be exempted if they can show requirements would jeopardize the business (whatever that means)
  4. Health care providers/emergency responders not covered

Two Weeks of Sick Leave (But this covers childcare as well)

  1. 80 hours of paid leave for full time employees/part-time employees get what they would be entitled to based on hours normally worked during two week period
  2. Covers everybody regardless of whether they were just hired
  3. Covers those: (1) that can’t work/telework because: (a) they are subject to government quarantine, health care provider quarantine; or isolation order; (b) experiencing Covid-19 symptoms and waiting for diagnosis; (c) employee is caring for someone in quarantine; or (d) employee has to care for employee’s child if school closed or child care unavailable
  4. Limited to $511 per day and $5,110 aggregate for employee’s illness/quarantine, and $200 per day/$2,000 aggregate for any other qualifying reason

Expanded FMLA Leave

  1. First ten days is unpaid
  2. After ten days, employer must pay TWO-THIRDS their regular rate of pay – pay is limited to $200 per day or $10,000 in aggregate
  3. Employee has to have worked for 30 days to be eligible
  4. Covers employees who have to work or telework because they have to care for a child whose school is closed or childcare unavailable

 

There are a lot more details in terms of definition and benefits but this is the meat of the new legislation.   If your company already offers FMLA leave, the expanded leave is part of the 12 weeks of traditional leave.  Also, the sick pay provision is in addition to whatever a company currently provides.  Here is a link to the complete bill.

 

No one likes exit interviews, well most folks don’t.  The employee is departing  the interviewer is checking off the boxes.  But, from the employer’s perspective they can be invaluable if handled correctly and I recommend them. Some considerations:

  1. Who handles the interview?  It doesn’t always have to be someone from HR.  If the departure is unpleasant perhaps there is someone that does have a good relationship with the employee that handles the discussion.  The goal is to get information.  Just make sure the interviewer asks the appropriate questions, listens to answers/tone, and follows up appropriately.
  2. What information should the employer be seeking?  To start with find out the who/what/where/when/and why of the departure.  If there are issues with the atmosphere at the company let’s here them.  The employer should be looking to improve things and avoid departures and turnover.  Would also be nice to know where they are going, how they can facilitate transition, will they be available for questions if need be.  The employee may want to vent, let them, ask open questions that seek information.
  3. Besides extracting information this is also the opportunity to provide the employee with information.  This includes any benefits they are entitled to, final paycheck information, and other nuts and bolts information.
  4. Use the interview to retrieve any company property.
  5. Most importantly – remind the employee of any post-employment covenants they have signed.  This could be non-disclosure agreements, non-competes, non-solicitation agreements etc.  Provide them with copies of the agreements if need be.  If appropriate get a written acknowledgement.  Remind the employee the company takes these agreements seriously and will enforce them.
  6. Finally, find out if they have any questions.

 

 

We need to reset the way we consider  non-compete duration and scope.   Instead of conceptualizing the duration of a non-compete in terms of “how long” the better approach is “how short.”  The same is true for the subject matter of the non-compete – make it narrow.  What is the objective of a well written non-compete?  To draft it in such a way that a departing employee will abide by it without legal intervention.  Now if a lawsuit is necessary, the objective is for the court to enforce the non-compete as written.  This rarely happens because of drafting mistakes.

The unfortunate thing is businesses often times don’t consider non-compete terms until the time of enforcement.  Instead of putting in a little more time and money up front, we generally spend the time and money actually considering non-compete terms at the time of enforcement, years after the non-compete is prepared.  Discussions between lawyer and client at the time of drafting about the length of a non-compete may go like this:

Client:  What do Texas courts say about the length of a non-compete?

Lawyer:  It’s always dependent upon the circumstance, but Texas  courts have enforced them between a year and 2 years.

Client:  Well if we can get two years let’s go for two years.

The client’s approach makes practical sense, but  in terms of actual enforcement it does not.  In situations where there are multiple individuals who are subject to the same non-compete, having a non-compete “busted” or modified can have dramatic consequences. The same rationale applies to the scope of the non-compete:

Client:  We do business throughout the United States?  Can we put in a US wide non-compete?

Lawyer: In some circumstances courts have upheld nationwide non-competes but no situation is the same.

Client:  Well, let’s go as broad as possible.

This is the wrong approach.  There are a number of audiences that a non-compete will be considered by: (1)  employees; (2) the lawyer for a departing employee; (3) the judge; and (4) appellate courts.  I have been a party to numerous discussions between employees who have left or are considering leaving in the face of a non-compete.  A narrowly tailored non-compete that has been thought through can be intimidating.  Why?  Because a non-compete that avoids fluff, e.g. too long and overly broad, eliminates the position that the agreement should be narrowed by the court.  If the time/scope argument is taken out of the equation, the employer is in a much better position to enforce and looks reasonable to the judge.  That means the lawyer providing advice to the departing employee has less to argue. Spend some time considering your non-compete terms, the objective is to enforce it as written, not to have it rewritten by the court.

As the New Year begins a couple of things to consider:

  1. Is the company employee manual up to date – any changes necessary? – The beginning of the year is always a good time to review those policies and procedures and see how they worked in 2019. 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.
    Make sure employees have signed off on all non-compete, non-solicit, or confidentiality agreements. Make sure you have signatures
  4. Frequently the end of the year involves reviews. Make sure those reviews are acknowledged by the employee and make it to their employment files.Do you have job descriptions for your employees? Do you even need them?
  5. Are your independent contractors really employees?
  6. Is it time for some employees to move elsewhere?
  7. Is there a troublesome employee our there that might benefit from a performance improvement plan?
  8. Get your lawyer to take you out for lunch so they can update you on any new employees issues coming in 2020 and so you can pick their brain about any other issues.

All the best in 2020!

 

The above is a fuzzy map of the city limits of Dallas with zip codes – you get the point. The recently enacted Dallas Paid Sick Time Ordinance applies to the areas in green.  Here is our previous discussion on the details of the ordinance.  In a nutshell, employees who work work at least 80 hours a week in the geographic boundaries of Dallas are entitled to paid sick leave

Today, I took a look at the City of Dallas “Frequently Asked Questions” regarding the Dallas Paid Sick Time ordinance.  Here some of the more obscure/interesting items that caught my attention:

  • Employee has to be working in the geographical boundaries of the City of Dallas;
  • Number of employees is determined by those that have done at least 80 hours of compensable work within the City of Dallas in the last 12 months – if the number of employees has varied use the highest number – part time employees are considered one employee;
  • Enforcement of provision (except retaliation) with employers that have six or more employees begins April 1, 2020 – 5 or more August 1, 2021;
  • There is a fairly lengthy discussion about how to properly front-load hours (employee has immediate access to sick time as opposed to accruing the hours over time);
  • Employers must provide employees a monthly statement about the balance of their paid sick time hours;
  • Records related to use of sick time hours must be maintained for 3 years;
  • Employees must provide notice of FORESEEABLE sick time notices;
  • Employees must be paid for sick time on the pay period for which the sick time was used;
  • A terminated employee is not entitled to payment for unused sick leave;
  • The ordinance will be enforced by the Office of Fair Housing and Human rights (no details as of yet); and
  • A complaint can be filed on a complaint form but does not have to be.

From my perspective the enforcement details will be very interesting and raise a lot of questions.  What type of investigation process will the Office of Fair Housing employ?  Will it be similar to an EEOC investigation where the is a complaint filed by a response?  What type of appeal process will there be of the Office of Fair Housing’s initial determination?  The devil is always in the details.  We’ll keep you posted on any developments.

 

Here’s a smattering of cases/disputes that are out there:

  1. Interesting article about two cases from Ohio involving a cookie entrepreneur and taco restaurant chain owner;
  2. Not in the employment world – but a Michigan judge shut down the construction of a hotel after determining it violated a non-compete;
  3. The typical pharmaceutical sales rep case – this one from Kansas City (paywall);
  4. A non-compete case from East Texas where a doctor sued a group of nurses over a non-compete; and
  5. A lawsuit by six veterinarians in Washington challenging a non-compete contained in a shareholders agreement.

Non-competes aren’t going anywhere for now but Presidential Candidate Elizabeth Warren has promised to ban them if elected.