What can you do to protect your company secrets when Angela, your vice-president of sales, announces she is leaving your company and going to work for your competitor? Is there a way to keep Angela from telling her new employer all about your customers’ preferences, your company’s proprietary pricing, or the new business line you are exploring?
Truthfully, the day Angela announces her resignation is way too late to adequately protect your company’s most important secrets. Your efforts to safeguard your formulas, recipes, passwords, marketing plans, customer lists or other information you would like to keep confidential should have started before Angela was even hired.
There is no time like the present to begin taking at least four concrete actions if you value your business secrets:
- Physically protect your confidential information. Remember the urban myths that the secret recipe for KFC chicken or the formula for Coca-Cola were locked in a safe somewhere in company headquarters? According to Fox News, those are actual precautions taken by these companies. “The recipe [for Coca-Cola] lies in a vault in a downtown Atlanta SunTrust Bank vault and only two executives at a time have access to it.” As for KFC: “’Colonel Harlan Sanders’ Original Recipe eleven herbs and spices are inscribed in pencil on a yellowed piece of paper inside a Louisville, Kentucky safe’, says KFC spokesman Rick Maynard. ‘The safe lies inside a state-of-the-art vault that is surrounded by motion detectors, cameras and guards.’” Corporate espionage and theft of trade secrets is big business these days. These two food companies are serious about safeguarding their trade secrets. Are you as careful with yours?
- Do you at least have good password procedures, firewalls and cyberthreat protection, files marked “confidential”, inventories of your laptops and other equipment, and limitations on which employees have access to the keys to your business kingdom?
- Do you teach your new employees what information is confidential, how to protect it, remind employees frequently about their confidentiality obligations, and take immediate action if there is any breach in confidentiality?
- Do you prevent employees from downloading company documents onto flash drives or leaving the premises with your files?
- If you don’t take serious measures to protect your trade secrets, you really shouldn’t expect your current or departing employees to care either. Plus, the new Texas Uniform Trade Secrets Act doesn’t even recognize information as a trade secret unless the owner can demonstrate that the business has taken reasonable measures to keep the information secret. So without active measures to protect the secrecy of your proprietary information, you are helpless in the courts when your secrets are stolen.
Continue reading Four Steps to Protect Your Company’s Secrets When Employees Leave
One of the best employment law training opportunities for managers, human resources personnel and business owners of your company is happening in Amarillo on September 21, 2018.
The Texas Workforce Commission only offers its Texas Business Conference in Amarillo every few years and I recommend it to my clients as a “not to be missed” event. The cost is only $125 per person and just the written materials you will receive at the one-day conference are worth that.
The TWC’s speakers will cover the following in detail:
- Wage and Hour Law (which is arguably the most violated business law in the country);
- Independent Contractors;
- Policies and Handbooks;
- Worker’s Compensation: How to Control Costs of an On the Job Injury;
- Hiring/Employment Law Update; and
- Unemployment Claims and Appeals.
The great news is that the conference will help you no matter whether you are new to human resources issues or have been dealing with them forever. I’ve been practicing employment law for 30 years, yet I learn something new every time I attend this conference.
If you would like to sign up for this training event, you can find more information and registration here. I hope I see you there on September 21.
For the last several years, the National Labor Relations Board has been regulating which policies your employee handbook can and cannot include, even in your non-unionized workplace. At one point in 2015, there were dozens of handbook policies that were considered to have a chilling effect on an employee’s freedom to organize through “concerted activity”. Those policies were ruled to violate the National Labor Relations Act and as an employment lawyer, when I encountered them in a client’s employment policy manual, I either removed them or added a disclaimer stating that the policies weren’t intended to apply to acts protected by the NLRA.
Three years have passed and several court opinions have frowned on the NLRB’s formerly expansive disapproval regarding employee policies. In addition, the political leanings at the NLRB have shifted. Therefore, a distinctive change has recently occurred in the NLRB’s approach as to which employee policies an employer can enforce and which ones an employer can’t.
In a general counsel’s memo dated June 6, 2018, the NLRB instructed its staff that the following policies are okay to include in an employer’s policy manual and won’t necessarily be treated as an unfair labor practice:
- Civility rules that require employees to avoid disparaging coworkers and using offensive, rude or condescending language to a coworker or customer;
- Rules requiring that proprietary information and trade secrets of the employer and confidential information of customers have to be protected by employees (however, just saying everything the employee learns at work is confidential is too broad);
- Rules prohibiting employees from aiding the competition, self-dealing and nepotism;
- Rules against insubordination or non-cooperation that affects company operations (usually described as refusal to comply with a supervisor’s orders and/or perform work);
- Rules prohibiting employees making intentionally dishonest statements or misrepresentations;
- Rules prohibiting disruptive behaviors, such as “fighting, roughhousing, horseplay, tomfoolery, and other shenanigans.” Also included on the naughty list: “yelling, profanity, hostile or angry tones, throwing things, slamming doors, waving arms or fists, verbal abuse, destruction of property, threats, or outright violence.”
- Rules prohibiting photography or recording in most business settings. “Employers have a legitimate and substantial interest in limiting recording and photography on their property. This interest may involve security concerns, protection of property, protection of proprietary, confidential, and customer information, avoiding legal liability, and maintaining the integrity of operations,” said the 2018 NLRB General Counsel. So, on balance, the NLRB has decided that it is okay for your policy to tell your employees “no photography, no recording”.
But that doesn’t mean that every rule in your employee handbook is acceptable. You still have to consider if your written policy is infringing on your employees’ rights to participate in protected concerted activity—the joining together of employees to discuss or protest the terms and conditions of their employment. If so, by enforcing that policy, you may be committing an unfair labor practice and you can be investigated and penalized by the NRLB.
Here are five policies that your employee policy manual that are still problematic and could get your company into trouble: Continue reading Employee Handbook Policies You Can and Cannot Legally Include
Do I have to pay unemployment on my employee who just quit/resigned/got fired/was laid off?
During most of my thirty years as an employment lawyer, I have been asked that question at least once a week. Here are ten basic facts that every employer in Texas needs to understand about our state’s unemployment system: Continue reading 10 Facts Texas Employers Should Know About Unemployment
With the current opioids epidemic raging across America, including in the Panhandle of Texas, employers are asking me if they can drug test current employees for prescription medications such as hydrocodone. Can a Texas employer try to prevent a workplace accident or death by testing when opiate use is suspected, or do you just have to hope that employee won’t hurt someone?
You have to consider the Americans with Disabilities Act when deciding if you are going to drug test your employees and how you should react to a positive test. The ADA protects an employee’s rights to lawfully take over-the-counter and prescription drugs to treat a disability.
However, the ADA doesn’t protect current substance abusers. So, since abuse of prescription drugs isn’t protected, how an opiate was obtained, how it is being taken, and if the employee is too impaired to work safely become crucial questions if your employee appears impaired.
Usually, I get a call from an employer about drug testing when an employee is falling asleep on the job, is slurring words, seems disoriented, has difficulty performing routine tasks, and/or is excessively absent, belligerent or erratic. At that point, drug testing may be appropriate, but I have to ask if the employer has laid the groundwork to do the drug testing and to respond appropriately to a positive test.
As with most employment law issues, you have to protect your business with well-written policies long before you are faced with an employee who appears to be high on Vicodin. Continue reading Written Policies to Protect Your Business During the Opioids Epidemic
It is that time of year when we are singing, “We wish you a Merry Christmas”. As an employment lawyer with 30 years of experience, I have some idea of what you as a business owner or manager are wishing this Christmas.
I know you work hard as a supervisor. Managing people every day isn’t an easy job, particularly if your employees do not have a willing attitude to try to be a good employee.
I hear from employers every day about the frustrations that you face as an employer. The average person who supervises employees spends at least 20% of her time just dealing with employee mistakes, complaints, emotions, negligence, etc., on top of trying to do all of her regular work.
So, for this Christmas, I have made a list of what I wish for you as a supervisor in terms of employees.
- Employees who realize that the purpose of a business is to make a profit, and that requires that the employee actually be present to perform the work assigned. I recently had a matter involving an employee who was tardy repeatedly for things like a flat tire, a loose dog and “I forgot to set my alarm”, so that client meetings had to be cancelled and business was lost. I wish for you as a supervisor the employment of people who realize that these little issues chip away at a business’s profitability. Even a small company should provide a generous amount of vacation time, sick leave and holiday pay. But once an employee has used up his allotted paid time off, he needs to think seriously about getting back to work and being productive for you or the business may not be there to provide his paid vacation the next year.
- Employees who can be trusted with the success of your business, as well as the company’s time, money, and equipment. Every year I see a number of business owners in the Panhandle lose significant amounts of money to employee embezzlement, lose equipment to employee negligence and lose profitability to employee laziness. Granted, the employer needs to have reasonable checks and balances in place to try to prevent these losses. But wouldn’t it be nice if all of your employees were the kind of people who had enough integrity to forego theft, enough caution to treat your property as theirs, and enough loyalty to go above and beyond the bare minimum effort.
- Sober employees. Most business now drug-test when an employee is hired. This has resulted in a drop nationwide in pre-hire positive drug tests. But I still see injuries and damage done by substance-abusing employees after they have worked for the business for a while. My wish is that you don’t have to deal with those issues. You can help make my wish come true by actually requiring the occasional random drug and alcohol testing in your workplace, as well as testing immediately after any personal injury or property damage occurs at work that might have been caused by an impaired employee.
- Employees who exercise verbal discretion. Employees who gossip, spread rumors, complain, speculate and backstab in an effort to make themselves look better simply don’t realize that respect is given to those who keep their negativity and rumor-mongering to themselves. It would be great if Santa could bring each of your employees the gift of discretion this year. As someone wise said, “Discretion is the ability to raise your eyebrow instead of your voice.”
- Employees who appreciate feedback and even criticism because it makes them better at their job. I have often thought that the clearest sign of maturity in an employee is his ability to accept constructive criticism, or even better, to ask for it. So, I wish for you employees who know that wisdom comes from humility and accountability. You deserve those employees who are not afraid to find out if they made a mistake and to ask you the best course to avoid such mistakes in the future.
- Employees who take pride in their work regardless of who gets the credit. “My grandfather once told me that there were two kinds of people: those who do the work and those who take the credit. He told me to try to be in the first group; there was much less competition.” – Indira Ghandi. Enough said.
Such employees sound like a dream, like a Christmas wish, don’t they? But you probably know that the best way to cultivate such employees is to lead from the top down. You must be the type of leader whose character, work ethic, sobriety, discretion and integrity are unquestionable if that is the type employee you want to employ.
As I have said before in my blog posts: “You will get the employees you deserve if you are quick-tempered, unfair, dishonest, prejudiced, undependable, selfish or disloyal to your employees. Your values, good or bad, will set the standard for everyone you supervise.”
An employer should always carefully document the reasons for firing an employee. But your termination documentation doesn’t have to be complicated.
I’ve attached a one-page form that you as an employer can quickly fill out and place in the employee’s file whenever you have to terminate the employment of one of your workers. But just because the form is simple doesn’t mean that you shouldn’t put some thought into the process.
Even though Texas is an “at will” employment state, it is wise to have good reasons for firing an employee. You need to stick to those reasons exactly when you complete the unemployment form from the Texas Workforce Commission, if you get a discrimination complaint from the Equal Employment Opportunity Commission and if you hear from the Department of Labor on a retaliation case.
Nothing looks more suspicious to a government investigator or to a jury than an employer’s termination story that changes over time. The all-important consistency of your answers begins with this document filled out on the day that the employee is terminated.
Clients are always asking me what they can do to prevent getting sued by an employee who was fired. Having good, nondiscriminatory reasons for the termination and documenting those reasons carefully are the first steps in preventing a lawsuit, or at least winning one.
Click here to download this simple firing form:
Termination Documentation Form
It is easy for employers to lose sight of the obligation to protect all employees regardless of national origin or religion with all the heated political rhetoric we hear right now. But it is still against every federal and state civil rights law for an employer with 15 or more names on the payroll to allow any workplace harassment or discrimination on the basis of where someone is from, what language they speak or what religion they practice.
Since 2001, religious and national origin discrimination cases filed by Muslims and others of Middle Eastern ancestry have increased. Similarly, when illegal immigration is a hot topic, employees of Mexican heritage are often targeted for discrimination.
The Equal Employment Opportunity Commission now receives approximately 3000 charges each year about religious discrimination and 9000-10000 charges of national origin discrimination in the workplace.
In some circumstances, the discrimination is quite blatant. In Huri v. Office of the Chief Judge of the Circuit Court of Cook County, Illinois (7th Cir. 2015), the Muslim plaintiff of Saudi Arabian origin alleged that her supervisor was a devout, vocal Christian who was unfriendly to her from the beginning. The supervisor allegedly referred to one of Huri’s colleagues as a “good churchgoing Christian” while calling Huri “evil”. The supervisor reportedly also made a show of saying Christian prayers in the workplace while holding hands with employees other than Huri.
Any employer should be able to quickly recognize the legal and morale implications of such behavior and correct it. But other questions arise when well-meaning employers are confronted with an employee who may be from a culture or religion that the employer is unfamiliar with. That’s why in 2016 the EEOC released guidelines specifically about preventing discrimination against employees on the basis of national origin. These guidelines join the EEOC’s specific guidance on the workplace rights of employees who are perceived to be Muslim or Middle Eastern and the EEOC’s guidance on best practices to prevent religious discrimination in business settings.
What does an employer need to do to prevent or address any hostility in the company towards an employee on the basis of that employee’s national origin or religion? Continue reading Religious and National Origin Discrimination in Heated Political Times
Effective August 1, 2016, all employers of every size workforce must comply with two new mandatory federal poster changes. The US Department of Labor (DOL) has updated its Fair Labor Standards Act (FLSA) poster and the Employee Polygraph Protection Act (EPPA) poster.
The changes to the FLSA poster include removing civil penalty amounts, the addition of the rights of nursing mothers, and a deletion of text under the Child Labor section. Except for a few very narrowly exempted employers, whether you have two employees or two hundred employees, you need to put up this new poster.
The changes to the EPPA poster include a removal of a civil penalty limit, a change in their toll-free phone number, and an additional TTY phone number. All employers, regardless of the number of employees and regardless of whether you would ever consider giving your employees a polygraph, must display this poster in the workplace.
The mandatory notices must be posted immediately. As with all of your employment posters, these two new ones should be displayed in a prominent and conspicuous place in each of your establishments wherever notices can be readily seen by employees and applicants. A spot right next to your time clock or in your employee entrance area is ideal. Just make sure wherever you place your posters is a place that all of your employees regularly enter.
If you need help knowing which posters besides these two you need to have displayed in your workforce, you can find the lists of required federal posters here and Texas posters here. All of the required posters are available online for free. You don’t need to pay a commercial service for a combined poster that isn’t customized to the specifics of your workplace.
Don’t ignore your federal and state posting requirements. The penalties have risen recently. For example, if you have 15 or more employees, the failure to put up the required EEO poster was raised to $210 in 2014 for each of your locations and is now indexed to the Consumer Price Index to increase with inflation. Considering you have as many as twelve posters required in your workplace, you don’t want to be fined for something so easily remedied.
If your employment application asks whether the applicant has ever been convicted of a felony, you may need to consider whether to “ban-the-box” that asks that question of your applicants. Why? Because nationally, over 100 cities and counties and over 185 million people live in a ban-the-box or fair-chance jurisdiction. In addition, the Equal Employment Opportunity Commission is gunning for employers who exclude everyone with a criminal history from employment.
The “ban the box” movement seeks to have employers consider an individual candidate’s job qualifications while prohibiting the employers from taking into account a candidate’s criminal history in the beginning of the application process. Ban-the-box aims to provide applicants with a “fair chance” at employment by delaying any consideration of criminal history until a preliminary job offer is made.
Austin is the first city in Texas to “ban the box,” but it is likely that more areas of the Lone Star State will follow in the near future. As of March 24, 2016, Austin passed the Fair Chance Hiring Ordinance, which prohibits employers from asking about or taking under consideration the criminal history of an individual until after making a conditional employment offer. While this ordinance does not cover state agencies or federal employment, it does apply to any private organization with 15 employees or more in the Austin city limits.
So Texas Panhandle employers don’t have to comply with the Austin ordinance if they have no employees in Austin, but they do need to worry about the EEOC claiming that a local employer discriminates in their hiring on the basis of race or ethnicity (it is the official position of the EEOC that “national data supports a finding that criminal record exclusions have a disparate impact based on race and national origin. The national data provides a basis for the Commission to investigate Title VII disparate impact charges challenging criminal record exclusions”).
So the wise employer will go ahead and take the “ever been convicted of a felony” question off of the application for employment. In addition, for both prudence and economic reasons (detailed criminal background checks aren’t cheap), smart employers will wait until they actually make a conditional job offer before checking the criminal record of a potential employee.
In addition, an employer should not: Continue reading Ban the Felony Box on Applications