Former Partner Loses Millions by Violating Non-Compete

Non-competition and non-solicitation agreements can be useful tools for companies trying to protect their key client relationships and confidential information. Enforcing these agreements, however, can sometimes be difficult, given the law’s general disfavor of them. A recent Minnesota Court of Appeals case illustrates how a thoughtfully drafted non-compete can protect a company in the event that a former key employee begins competing with his former company.

Sick and Safe Time Leave Reaches Northern Minnesota

The City of Duluth, Minnesota recently became the third major Minnesota city to enact a local law providing eligible employees with paid leave for sick or safe time absences. On May 29, 2018, the Duluth City Council adopted Ordinance No. 10571 (the Ordinance), which establishes minimum standards for earned sick and safe time leave. The Ordinance is set to take effect on January 1, 2020. 

Covered Employers and Employees

The Ordinance is written to apply to employers with five or more employees nationwide—regardless of where those employees are located. Employee eligibility, however, is written to tie to how much time an employee spends working in Duluth. Employees are to be eligible for paid sick or safe leave under the Ordinance if they: (1) work in Duluth more than 50% of their working time in a 12‑month period; or (2) are “based in” Duluth, spend a “substantial part” of their time working in Duluth, and do not spend more than 50% of their work time in a 12‑month period outside of Duluth.

A BREAK IN THE DAM: U.S. SUPREME COURT RULES PUBLIC UNIONS MAY NO LONGER COMPEL PAYMENTS FROM NON-MEMBERS

In a highly anticipated 5-4 decision, in which Justice Gorsuch cast the deciding vote, the U.S. Supreme Court overruled its own previous case and held today that a labor union may not require employees in the public sector to pay for its services. The decision, Janus v. AFSCME Council 31, may significantly weaken unions operating in both the public and private sectors and throw labor relations between government workers, their employers, and their unions into turmoil.

Class Action Tolling in the Wake of China Agritech—The Good and the Bad for Employers

Earlier this month, the U.S. Supreme Court addressed whether, after denial of class certification, a putative class member can file a new class action after the applicable statute of limitations has expired, as opposed to joining an existing case or pursuing an individual lawsuit. The Court held, in China Agritech, that this is not allowed, creating potentially significant ramifications for employers. Had the Court ruled the other way, claimants who were unsuccessful in obtaining class certification might have had the ability to perpetually file new class actions, one after the other, in a never ending effort to obtain class certification.

NLRB Chair Confirms Board Will Do Rare Rulemaking on Joint Employer Standard

The Chair of the National Labor Relations Board (NLRB), John Ring, confirmed on June 5 that the NLRB will engage in formal “notice-and-comment” rulemaking on the subject of joint employers, about which we have written many times (1, 2, 3, 4, 5). Ring’s announcement was made in a letter to three Democratic senators who had written to him expressing concern that the NLRB was contemplating formal rulemaking on the joint employer issue. Such rulemaking is rare for the NLRB. “Candor requires me to inform you,” wrote Ring, “that the NLRB is no longer merely considering joint-employer rulemaking. A majority of the Board is committed to engage in rulemaking, and the NLRB will do so. Internal preparations are underway, and we are working toward issuance of a Notice of Proposed Rulemaking (NPRM) as soon as possible, but certainly by this summer.”

Confirmation of the plan for formal rulemaking should come as welcome news to employers across the country, many of whom have watched with increasing dismay as the NLRB has issued a variety of shifting joint employer rulings. The NLRB’s joint employer standard addresses the conditions under which two companies may be found jointly responsible for unfair labor practices, union organizing and other collective bargaining matters.   

EEOC Issues New Publications Regarding Mental Health Conditions in the Workplace

As our readers know, the Americans with Disabilities Act (ADA) addresses both physical and mental health disabilities of employees. Under the ADA, employers with 15 or more employees may not discriminate against an employee or applicant on the basis of a qualifying disability. In addition, in certain circumstances, the ADA requires employers to provide a reasonable accommodation to enable the employee or applicant to do the essential functions of the job.

Recently, the Equal Opportunity Commission (EEOC) issued two new publications relating to mental health conditions under the ADA. The publications are set up in a question and answer format. The first publication is aimed at employees and is titled “Depression, PTSD, & Other Mental Health Conditions in the Workplace: Your Legal Rights.” While aimed at employees, employers will find the publication helpful as a general overview of the ADA issues involved.  In addition, employers may find the publication to be a helpful tool when needing to talk with employees about potential accommodation issues.

The NLRB Finds Terminations Following Employees’ Group Emails Regarding Workplace Concerns Violated the NLRA

In a unanimous decision last month, a three-member panel of the National Labor Relations Board (NLRB) found that a restaurant company violated the National Labor Relations Act (NLRA) when its New York City location fired four employees after the employees emailed other employees and managers to complain about, among other things, work schedules, the company’s tip policies, and the management’s treatment of employees.

The case arose after an employee wrote an email upon her resignation complaining about management’s treatment of employees, tip policies, work schedules, and more. The email included some profanity. The now-former employee sent the email to several employees as well as the owners of the company and several managers. Four of the employees replied-all to the email with positive messages including agreeing with its contents and expressing support and gratitude for the former employee and her message. Three of the four employees had spoken with each other about the contents of the email before they sent their responses. Shortly after the employees replied to the email, all four employees were terminated.