Last week, Google said it was no longer going to enforce its anti-poaching provision that includes in its employment contracts.  I don’t see them going anywhere as it relates to Texas employers/employees.

Under Texas law, an anti-poaching provision has to satisfy the Texas non-compete statute meaning it has to be ancillary to an otherwise enforceable agreement and reasonable in time and scope.  The provision will attempt to limit a departing employer from hiring a current or former (maybe within a couple of months of termination) of the employer to work in a competing business.  The thought behind such a provision is it prevents a mass exodus and a former employee from taking her team somewhere else.  The anti-raid is frequently seen in a sales based organization.  The provision usually lasts 1-2 years.

There aren’t many Texas cases on the anti-raid.  In most circumstances if an employer has taken the time to prepare an anti-raid there is likely to be a non-compete, non-solicit (customers related), and/or non-disclosure/confidentiality provision.  There’s a good chance that a departing employee violating accused of violating an anti-raid provision is also accused of violating a non-compete.  The focus in those situations is on the non-compete but poaching employees is another example of bad acts by an a departing employee that may lead to a judge entering injunctive relief that enforces both provisions.

Employers will look for evidence of an orchestrated raid.  This usually takes the form of emails and texts leading up to the departure.  The employee will argue they did not reach out to the employee, the employee called them, sort of like a non-solicit defense.  The court has to balance the right of an employee to work where they prefer versus the enforceability of the contract provision.  Often times the employer will sue the departed employee for tortious interference as well.

Employers will continue to use the anti-raid as another arrow in the quiver of post-employment covenants.  Employees will have to work within the confines of such an agreement to permit a move.  These provisions aren’t going anywhere.

 

 

Over the past few months we’ve been tracking the interplay between various Texas cities (San Antonio – Dallas – Austin) and the Texas legislature.  The aforementioned city councils adopted in similar form and fashion mandatory leave policies for employees within city limits.  The Dallas version provides for the following:

  • In effect August 1, 2019 for employers with 15 or more employees and August 1, 2021 for smaller businesses;
  • All for-profit and non-profit businesses required to provide paid sick-leave;
  • An employee is entitled to one hour of leave for every 30 hours worked; and
  • The number of hours that can be accrued is limited to 64 hours for employers that employ more than 15 employees and 48 hours for those with fewer than 15.

Mayors and legislators told us the ordinances would never happen because Texas state legislation would prevent the ordinances – or so they said.  Guess what?  The Texas legislature did not make it happen.  Come August we have mandatory leave in Dallas proper.

Other cities in the U.S. have passed similar ordinances and in some instances gone above and beyond.  For instance, the City of Minneapolis has a passed a quasi-FMLA ordinance with retaliation provisions.  A city agency can actually award damages with limited judicial review.  Think of it as arming the EEOC with the power to award damages – from an employer perspective that his scary.  The question becomes whether Texas cities will continue to expand these type of pro-employee provisions. We’ll see and keep you posted.

 

Following a number of other cities in Texas including Austin and San Antonio, the Dallas City Council approved an ordinance requiring paid sick leave for Dallas employees.  The highlights of the ordinance:

  • In effect August 1, 2019 for employers with 15 or more employees and August 1, 2021 for smaller businesses;
  • All for-profit and non-profit businesses required to provide paid sick-leave;
  • An employee is entitled to one hour of leave for every 30 hours worked; and
  • The number of hours that can be accrued is limited to 64 hours for employers that employ more than 15 employees and 48 hours for those with fewer than 15.

Employers and employee should tap the breaks right now.  There is currently legislation in Austin that will prevent the Dallas along with other city sponsored paid leave ordinances.  Multiple measures have already passed the Senate.  It seems unlikely the the ordinances will survive but we will continue to monitor the situation.

 

In  Texas, cities are attempting to enact legislation that mandates paid time off/sick leave.  In February, the City of Austin passed a paid-time-off ordinance.  It does not go into effect until October.  In the meantime lawsuits have been filed to stop the ordinance and there are efforts in the Texas legislature to prevent such ordinances.  Today, I read in the Dallas Morning News that the City of DeSoto has become the first North Texas city to enact paid family leave.  The point is the trend towards this type of legislation is on the upswing.  Depending on your views, more progressive or liberal towns, cities, and counties are pushing this type of ordinance.  Conservative groups or legislatures will then attack the ordinance. Continue Reading Watch Out for City/County Employment Laws

Towards the end of the Obama administration, the Department of Labor announced standards that would expand overtime coverage.  Here is a run down from what was proposed from a post way back in 2016:

The new “Whit Collar Rule” for exempt/non-exempt from the Department of Labor kicks in on December 1, 2016.  In short, employers will no longer be able to treat “white collar” employees that make more than $47,476 per year as exempt and will pay overtime once they work over 4o hours a week.  The DOL suggests three options to employees: Continue Reading Round 2 – Overtime Rules

At the outset of most employment relationships, the employer will have an employee sign a litany of documents ranging from a IRS form W4 to a non-compete agreement.  Buried within those documents is usually some form of a confidentiality agreement.  Within the agreement the employee agrees not to share any of the employer’s confidential information while an employee and after they depart.  Sometimes the agreement is referred to as a non-disclosure agreement or NDA.  Here is an example of a clause from such an agreement:
Continue Reading Loose Lips Sink Ships

I recently finished a hard fought non-compete case that settled the day before trial.  Unlike most non-compete cases that resolve themselves early on during the temporary injunction fight, this non-compete contained a liquidated damages provision that specified the damage number in the event of a non-compete breach.  The terms of the non-compete prevented the employer from seeking injunctive relief – the only remedy was the liquidated damages clause. The trial court ruled the non-compete was enforceable and the amount of the liquidated damages provision was never challenged.  Even with those rulings/facts the case dragged on to the point of trial.

Continue Reading Latest Texas Non-Compete Lessons

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 2018.  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.  Make sure you have signatures!
  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.
  6. Do you have job descriptions for your employees?  Do you even need them?
  7. Are your independent contractors really employees?
  8. Is it time for some employees to move elsewhere?
  9. Get your lawyer to take you out for lunch so they can update you on any new employees issues coming in 2019 and so you can pick their brain about any other issues.

All the best in 2019!

I remember when I was a younger lawyer the difficulty I had with clients settling lawsuits that factually and legally had little merit.  I remember the partner I worked for telling me that was the cost of doing business.  While I knew he was right that comment still bothers me to this day.  But the reality is lawyers cost money and the time and expense defending lawsuits can be distracting, especially when a company doesn’t have a legal department or is a routine player in employment disputes.

No matter how distasteful, at the same time a company is getting together all of the documents and identifying the witnesses that are key to defending a claim, the powers that be also need to evaluate the possibilities of settlement.  What does mean?  Defense counsel should be reaching out to plaintiff’s counsel early on in the process to determine what the plaintiff wants.  There are two things I tell my clients that I am generally certain of: (1) a dispute will cost more then you think; and (2) it will also take up more of your time then anticipated.

Now there are certain times where the company may need some discovery to be in a position to evaluate the claims of a plaintiff. But in many situations, dialogue with opposing counsel may give the other side a read into what the lawyer actually believes the merits of the case may be.  Trust me, a lawyer on a contingency fee does not want to spend time on a case that is marginal.  If it’s marginal they are going to want to resolve it, if not maybe the case as not as marginal as the company thinks.

Most cases are never going to trial.  That means there could be a summary judgment or more likely a settlement at some point in the process.  The earlier in the process that can be reached the better.

For some time Texas has been a hot market for lawyers.  Big firms from other parts of the country who want to shop here not surprisingly will hire lawyers from other big firms that are already here.  Many of the partners in these firms have notice provisions in their partnership agreements that require them to provide notice to their firm of their departure.  A recent Texas Lawyer article highlighted the issue:

Continue Reading Notice Provisions for Texas Lawyers