Posts Tagged ‘non-compete’

In many instances these days, employees are forced under threat of termination, to sign non-compete agreements. In many cases, even if signed, they may never be enforceable if the employee elected to go to another company. Make sure and have an employment law attorney check out your non-compete and advise you on your rights since non-compete laws vary greatly from state to state.

In the event, though, that you are a high-level employee, which access to confidential information, your former employer will probably seek to enforce the non-compete agreement. As is the case with Martin Collins and Ford Motor Company.

Ford Motor Co. is suing Martin E. Collins, a former executive it says is violating a non-compete agreement. Ford hired Collins as general sales manager for Ford and Lincoln in March; he began work May 2 at Ford’s world headquarters in Dearborn. Collins managed the entire dealer distribution network for Ford and Lincoln, and provided “ongoing feedback to senior Ford management regarding sales performance, sales trends and progress toward program and budget goals,” according to the lawsuit filed Thursday in Wayne Circuit Court and since moved to U.S. District Court in Detroit.

Ford claims Collins agreed to a confidential information/non-compete agreement prohibiting him from working for a competitor for two years. Collins told Ford he had acquired no confidential information during his tenure at the company.

If you are given a non-compete to sign or have questions about one after resignation or termination, feel free to contact Scott M. Behren and the Behren Law Firm for a free consultation.

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We have blogged on many occasions on beating your non-compete agreement. The enforceability of them varies from state to state and can be dependent upon what state you worked in and what state your employer was located in.

Boston Beer Corp., the brewer of Sam Adams beer, recently sued a former sales executive and a rival California brewer, of Anchor Steam, he went to work with to try to keep him from divulging any of its trade secrets.

This case is interesting since in California, non-competes are generally not enforceable. However, Boston Beer sued Judd Hausner and Anchor Brewing of San Francisco in Boston a state that allows non-compete clauses in employee contracts.

In its lawsuit, Boston Beer seeks to enforce its non-compete against Mr. Hausner for one year. Boston Beer claims that Hausner hold confidential trade secrets.

This confidential information included Boston Beer’s secret plan for introducing new products in 2012, as well as sales and pricing numbers for the customers served by the entire Western Division of the Company (extending through the western states of the United States and into Canada). These secret plans and confidential data were disclosed to Hausner to enable him to compete more effectively against direct competitors such as Anchor.

Will keep you posted on how this beery interesting case turns out.

If you want to draft, review, negotiate or litigate over a non-compete, feel free to call Scott Behren and the Behren Law Firm for a free consultation.

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The way that some McDonalds employees in West Virginia were being treated makes me want to grimace (and I’m not referring to the big purple guy).

Three former employees are suing McDonald’s after they claim it violated the Fair Labor Standards Act for failing to pay minimum wage to employees.

Richard Estes, Gary M. Martin Sr. and Jeremy Thompson were employed at McDonald’s, according to a complaint filed Feb. 24 in the United States District Court for the Southern District of West Virginia.

Estes was employed from Aug. 1, 2006, until Nov. 1, 2008; Martin was employed from Dec. 1, 2008, until March 18, 2010; and Thompson was employed from June 1, 2009, until Dec. 14, 2009, according to the suit.

The former employees claim McDonald’s knew or should have known that its employees were illegally not paid minimum wage. They also claim they frequently worked more than 40 hours per week, but were never paid wages for hours actually worked in excess of 40 hours per week.

The defendant made several wage and hour violations, including telling the manager that employees were not to be paid for more than a set number of hours each week; for taking employees “off the clock,” when that set number of hours were met; requiring employees to work off the clock for up to or more than 40 hours per week; and requiring employees to work off the clock and not paying overtime, according to the suit.

If your employer is making your work off the clock, not paying you the minimum wage and not paying your for hours of over 40 hours per week, you may be owed additional wages and overtime. Feel free to call Scott Behren and the Behren Law Firm for a free consultation.

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Under Florida law, the general rule is that an employee who quits their job is not entitled to receive unemployment benefits. However, there is an exception to this general rule where the employee left with good cause attributable to the employer.

Dennis Martinez was a full time car salesman for Ford Midway Mall. Martinez was originally hired on a commission basis, but some time into his employment, his position was changed to where he received a draw against his commissions. When business declined and he was earning no commissions, based upon the employer draw, he would owe the employer money each week. As of the date of his resignation, Martinez owed over $2,000 to his employer due to these draws. Martinez expressed his dissatisfaction with this arrangement to his employer and resigned.

The unemployment referee determined that Martinez voluntarily quit without good cause of the employer. He further decided that because Martinez agreed originally to this draw policy, that he could not contest it a year later.

The Third District Court of Appeal reversed the determination of unemployment. The Court held that the unemployment laws “provides that an individual is not disqualified for unemployment benefits where the individual has “voluntarily left work with good cause attributable” to the employer. § 443.101(1)(a), Fla. Stat. (2009). “Good cause” includes cause attributable to the employer, which “as contemplated by the unemployment compensation law, describes that which would drive an average, able-bodied worker to quit his or her job.”

The Court held that the auto dealer was in violation of the Fair Labor Standards Act (“FLSA”) and the Florida Minimum Wage Act because Martinez was not getting paid the minimum hourly wage for the hours he was working for his employer. The Court held that the draw agreement used by the employer was in violation of the FLSA and Florida Minimum Wage Act. Moreover, the Court held that merely allowing them to pay under the draw policy, for a period of time did not result in a waiver of his legal rights under the FLSA.

The Court held that due to the employer’s violations of the FLSA and Florida Minimum Wage Act, Martinez had left his employment due to good cause attributable to the employer. The Court reversed the decision of unemployment and awarded Martinez his benefits.

The Opinion of the Third District Court of Appeal is here.

If you have questions about your right to receive unemployment benefits, feel free to call Scott Behren and the Behren Law Firm to discuss your legal rights.

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Many of you man know that if you your employer has at least 50 employees and you have been a full time employee of the employer for 12 months that you may be entitled to Family Medical Leave Act leave in the event of your serious health condition or that of one of your relatives. A new Federal Court opinion has indicated that an employee may not only take that FMLA leave, but should not be pestered about when they will return to work.

A U.S. District Court for the Western District of Arkansas opinion dismissed Howard Memorial Hospital’s motion for summary judgment and concluded that a jury should be presented with the Family and Medical Leave Act interference claim made by a hospital employee who said she felt pressured to return to work during her medical leave.

In the case, Regina Terwilliger, a former Howard Memorial Hospital housekeeper, claims that her supervisor contacted her on a weekly basis to ask when she would return to work after undergoing back surgery. One pivotal phone conversation revolved around Terwilliger’s work status, with the housekeeper asking if she was at risk of losing her job while she was at home recovering. During that conversation, Terwilliger’s supervisor responded to her questions by saying that she should return to work “as soon as possible.” Terwilliger decided to cut her medical leave short and returned to work a week early. A few weeks after returning to work, the hospital fired Terwilliger, alleging she stole from another hospital employee. Terwilliger says she was fired for taking FMLA leave and asserts that the hospital deprived her of the act’s full benefits by pressuring her to return to work early.

“Interference includes discouraging an employee from using FMLA leave,” the district court wrote.

If you have questions about your rights under the Family Medical Leave Act or FMLA, call Scott Behren and the Behren Law Firm.

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On many occasions I have blogged on this site about non-compete agreements and their enforceability. In summary, the enforceability of these agreements is based upon the language in your respective agreement and the state’s law that applies. When you have a non-compete you want to be aware of your rights under the agreement before you violate its terms to avoid a situation where your former employer seeks an injunction to prevent you from working for the new company. Case in point, former Wal-Mart executive Hank Mullany.

CVS Caremark Corp named a recent Wal-Mart Stores Inc executive as the president of its retail pharmacy business, but a judge temporarily blocked him from taking the job due to a noncompete agreement with Wal-Mart.
Read the rest of this entry »

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You may recall I have blogged on many occasions about the enforceability of non-compete agreements. In many cases, depending upon the state you are employed in, non-competes are not enforceable unless the employer has a legitimate business interest, such as a trade secret, that they are trying to protect by using the non-compete. You may recall that I previously had given examples of the KFC secret ingredient or the secret formula for Pepsi as the types of things that might be trade secrets that would justify protection under a non-compete agreement. It would not need to be something necessarily as famous as one of those examples, but it needs to be something more than information available from publicly available resources. In my experience, most employers do not have legitimate interests they are trying to protect by non-competes, they just want to stifle competition. That is not legal.

Well here is one more example of a legitimate trade secret where an employee was kept from working for a competitor due to his knowledge of trade secrets. Believe it or not, the owner of Thomas English Muffins a company called Bimbo Bakeries USA (Yes thats right Bimbo Bakeries) received a preliminary injunction against its former Vice President of Operations for California, Chris Botticella, preventing him from working for its competitor, Hostess Brands. The reason: Botticella was privy to nearly all of Bimbo’s trade secrets.

What’s a trade secret? Most states have codified the definition of a trade secret, but the basic ingredients are generally the same. A trade secret is defined as information, including a formula…method, technique or process that 1) derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use 2) is subject to efforts…to maintain secrecy. In a nutshell, a trade secret is information you don’t want a third party to know because it is profitable and, therefore, you try really hard to keep it confidential.

So Bimbo’s former employee went to work for a competitor, Hostess bakery. The maker of those so delicious Twinkies and cupcakes. The trial court granted a temporary injunction against this former employee keeping him from working for Hostess and finding that he had access to Bimbo’s trade secrets including: processes, pricing strategies and those formulas used to give Thomas English Muffins those nooks and crannies. The trial judge also found that Bimbo’s former employee, right after he accepted employment with Hostess, downloaded confidential information onto thumb drives.

So Bimbo’s former employee is prevented from working now until further rulings from this Court on this issue.

Well now I can give as examples of trade secrets, Pepsi, KFC and Bimbo Bakeries. But again, if you have a non-compete issue, speak with an employment attorney to review the document and advise you of your rights.

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Hope all of my readers had a great Fourth of July Holiday. And what is the Fourth of July holiday without the world famous Nathan’s hot dog eating championship. Yes this year’s winner Joey Chestnut ate a paltry 54 hot dogs and buns to win the competition. However, the six time champion, Kobayahsi, was banned from the event.

Apparently Kobayashi, refused to sign a non-compete agreement with Major League Eating (MLE) that would prevent him from competing in non MLE sanctioned events. So MLE refused to allow the six time champ to compete in this years competition and what did Kobayashi do? What every other employee in dispute over a non-compete agreement would do, went to the event, staged a protest and got arrested. Go Kobayashi.

No I would not recommend that you get into a dispute with your employer over a non-compete agreement that finds yourself in jail as a result. However, you should, as I’m sure Kobayashi did, have an employment law attorney review its terms and negotiate them, if at all possible, before signing them.

If you find yourself looking for employment and had previously signed a non-compete agreement, similarly, have an employment law attorney review it, it may very well be unenforceable.

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I hope you all had a good Memorial Day Weekend.

So you may recall that I talked in several recent bloggings about some of the new and unique legal issues that are arising from social networking sites such as Facebook, Twitter and LinkedIn.  As I have said on several occasions, you need to watch what you are doing in your social network outings.  This new case is just one more example.

Some of you may be aware of LinkedIn which is in the nature of a Facebook for business networking.  Well a new case that was filed in Federal Court in Minneapolis now brings into question whether networking online such as on LinkedIn is a violation of a non-compete agreement.

Brelyn Hammernik, a technical recruiter, was recently sued by her former company, Hanover, Md.-based IT staffing firm TEKsystems, after she sent messages to members of her LinkedIn network — members who also happened to be current employees of TEKsystems.

In a lawsuit filed in U.S. District Court in Minneapolis, the company contends that Hammernik’s communications violated a noncompete agreement that bars her from contacting former clients and co-workers.  Hammernik left TEKsystems in November and went to work for Horizontal Integrations, an Edina, Minn.-based IT consulting firm that is also named in the lawsuit.

This lawsuit is the first of its type.  So does this lawsuit now mean that once you leave your employer, if you have a non-compete or non-solicitation agreement you need to unfriend fellow employees on LinkedIn, Facebook etc.?  And it will necessarily determine whether sending e-mails and messages on social networking sites is the type of solicitaiton that violates a non-compete agreement.  I believe that if you are not actively soliciting business or trying to get them to come to work with you at your new employer, I think it will be hard for an employer to keep you from communicating with former co-workers via social networking.  Whats next, the employer keeping you from socializing with former co-workers at parties or bars?

One possible problem with the employees conduct in this case is that she sent e-mails that could be considered blatant solicitations as follows:

“Tom — Hey! Let me know if you are still looking for opportunities! I would love to have you come visit my new office and hear about some of the stuff we are working on! Let me know your thoughts! Brelyn”

Will keep you posted on what happens with this new case.  Let us know what you think about this new case.



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